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How Ashley Stewart Bounced Back From Bankruptcy

Three years ago, thick clouds of bankruptcy loomed over
 the plus-sized womenswear retailer, Ashley Stewart. Here's how CEO James Rhee turned things around.

Three years ago, thick clouds of bankruptcy loomed over the plus-sized womenswear retailer, Ashley Stewart. With a lack of direction, recurring losses, talent shortage and poor company culture, mayhem presided over Ashley Stewart.

A second bankruptcy report was not far off in a span of three years. Yet, despite their woes, the retailer managed a rebound. Hence, the survival of Ashley Stewart was considered a miracle by industry experts and insiders.

So, how did the tables turn so quickly? Here’s how Ashley Stewart pulled itself back from the brink of bankruptcy with new-found success.

 

Brand rescue

No matter where you would look, Ashley Stewart had become the recipe for bankruptcy. With years of losses, a fearful company culture that never allowed employees to interact properly resulted in a lack of ownership. Add obsolescence, a gloomy warehouse, and non-existent e-commerce, and you had the Ashley Stewart of yesteryears.

In short, a dark and
 gloomy cloud seemed to linger over the company. This was reflected in general employee attitudes. If
 that wasn’t enough, an old online platform had worsened their prospects further.

 

Back from the brink

Restoring a nearly bankrupt company back to profitability is a tough ask, and Ashley Stewart was no different. James Rhee, CEO of Ashley Stewart, knew that Ashley Stewart needed a friend straight away.

 

Source: Ashleystewart.com

As a former teacher and law graduate, Rhee had “never worked on a plus-sized business before; he didn’t know that world whatsoever,” according to Inc. magazine. So he had to start listening. To set things in motion, Rhee began by touring nearby markets to observe how shoppers interacted with retailers. He also chose to revamp the company’s online presence through digital marketing and e-commerce.

 

E-commerce and social priorities

Just when the company was six months away from filing another bankruptcy, James Rhee had other ideas. He didn’t want the business to liquidate. After thorough research, he concluded that they lacked momentum, focus and technology. Their outdated business model needed a makeover.

Hence, their e-commerce platform required a redesign. So, Rhee and his team began working with Demandware to overhaul their existing website. The result was a new mobile-first platform to boost user experience and engagement.

With a newfound commitment to e-commerce, Ashley Stewart introduced
 promotional incentives with online fashion review and discount sites like ClothingRIC and other select partners.

Apart from e-commerce, Rhee and his team decided to breathe new life into Ashley Stewart’s social media presence. Even during company’s crunch days, its
 Facebook page boasted over 425,000 likes. According to Rhee, “There are many, many women in plus who never were exposed to the brand, and they’re finding it for the first time through social and online. We’re confident that our overall social strategy is generating a significant amount of loyalty with our brand. That’s what we’re doing with social.”

A robust e-commerce strategy coupled with social paid off for the company. Ashley Stewart was among few plus-size retailers who had a natural fit and conversation with diverse consumers.

The strategy also aligned with operations adjustments. Rhee revamped the website with new content, high-quality visuals and added personnel to the merchandise team.He also upgraded the retailer’s production cycle to facilitate the quick arrival of fresh inventory every two to three weeks. Payroll was also tweaked, from 1,800 to 1,000 with the closing of 100 stores.

 

Organizational transformation

 

Stand for the brand

Among the first things Rhee did to put the company back in order was to ask employees to stand for the brand. At the core, Rhee wanted his team to reaffirm their
 commitment towards the brand. Rhee worked on a two prong srategy: overhaul the business model and transform organizational culture. He believes AshleyStewart stands for four things: fun, kindness, friendship and resolve.

 

Company culture overhaul

Perhaps one of the most displeasing things about Ashley Stewart, before it
 took off, was its culture. The company culture existed on paper but not in the workplace. There was an eerie bit of fearfulness among employees. They didn’t communicate; which made way for confusion and a lack of compassion.

Rhee saw the
 need for a new actionable culture. He “knocked down walls to create a more open floor plan, and … immediately shut down the C-suite offices.” They essentially decided to embrace a startup mentality.

 

Team effort

Today e-commerce accounts for up to 80% of their sales and is growing. For Rhee, it’s heartening to see the whole team involved. Both organic and online sales are the result of employees coming together.

Three years ago, things were quite different. Meanwhile, the team effort extends beyond the office. Employees were reluctant and would barely attend annual events. Today, they would gladly donate a part of their
income to a charitable cause.

Reaffirming trust

Leading the team was a revealing experience for Rhee in many ways. He believes in using judgment and tells his team to do the same. Employees seldom work well unless they are trusted with responsibility.

Today Rhee’s team takes responsibility and pride in the brand. As a result, Rhee has extended his trust further as they make moves to revamp their sales culture.

The remarkable turnaround of Ashley Stewart is a testament to the usefulness of strong leadership, a lean startup approach, e-commerce and social media. Fortunately, James Rhee saw the potential and risked it all to steward Ashley Stewart into a new era of success.

 

This article has been edited.

Charles Crawford is a high-level entrepreneur and co-founder of Crawford
 and O’Brien. Charles has been studying internet marketing, web design, and tech start-ups for years, and he has been successful with multiple business ventures such as affiliate marketing (where 98%+ of people ever make money). Connect with @crawfordobrien on Twitter.

 

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