Business
Headquartered near Bindlach, Germany, NKD is a discount clothing retailer operating a chain of circa 1,800 small format stores in secondary and tertiary cities primarily in Germany and Austria with smaller operations in Croatia, northern Italy and Slovenia. NKD was acquired by OpCapita in November 2013 from Daun & Cie.

Market
Value apparel represents 17% of the €36 billion German apparel market and has expanded at 5.2% per annum since 2005 (vs. +1.2% for the total German apparel market).

Strategy
NKD is a scale operator which services a stable subsector of apparel retail with operations concentrated in macro-economically stable end markets (Germany and Austria). The Company's stores are in secondary and tertiary cities. The Company caters for women aged 35 upwards. This focus provides NKD with a degree of competitive insulation from the market disruption caused by new entrants.

Leveraging the geographic and consumer profile, OpCapita's operational turnaround programme is centred on driving gross margin through improvements in the company's supply chain, merchandise planning and stock efficiency. This initiative is reinforced by changes in the Company's pricing model and customer communication and is being executed through a refined and more profitable store base.

Achievements
Since our investment, we have:

• Identified and recruited senior management
• Reduced prices to improve competitiveness and encouraged rapid clearance of end of season stock
• Re-engineered the supply chain to build strong relationships with fewer suppliers, based on quality, customer service, responsiveness and timeliness
• Diversified suppliers' country of origin to shorten lead times and balance increasing labour costs in low cost production countries
• Refined store portfolio to close underperforming stores and restart expansion