The executive vice president of a global entertainment company was concerned with the profitability of one of its large entertainment/retail centers. The center had been losing money since opening and the company wanted a strategy for the center that would generate profits. SDG helped develop a wide range of alternative strategies, including an outright sale of the complex, and evaluated their profitability and risk. Ultimately, SDG had four recommendations:
- Leverage the center's proximity to high-tech media companies and its existing "high-tech" branding to draw in one-of-a-kind entertainment/technology tenants, thereby attracting patrons from the large technology-oriented population in the region
- Develop partnerships/sponsorships with high technology companies that want to showcase their leading-edge Internet products and technologies, thereby giving this complex an advantage in an already crowded retail space
- Showcase sister divisions’ products and entertainers, both to attract retail customers and to help build these sister divisions' properties and brands
- Sell the complex to a more experienced real estate developer after achieving profitability targets.
These recommendations were expected to result in an EBITDA improvement of 50 percent within three years. The sound financial evaluation that SDG provided enabled the executive vice president to gain clear support for the recommendations from the CFO and president of the company.
