Naledi Threads Business Plan — Key Performance Indicators
The sell-through, basket, margin and stock-turn indicators monitored weekly, with the thresholds that trigger action.
Key Performance Indicators
Jump to section
- Overview & contents
- i. Important Notice and Basis of Preparation
- 1. Executive Summary
- 2. The Business
- 3. Market Analysis
- 4. Location Strategy
- 5. Products and Merchandise Strategy
- 6. SWOT and Competitive Position
- 7. Marketing and Sales
- 8. Operations
- 9. People, Compliance and Controls
- 10. Implementation Plan
- 11. Financial Plan
- 12. Break-Even
- 13. Working Capital and Debt Service
- 14. Returns
- 15. Sensitivity and Scenarios
- 16. Risk Management
- 17. Trigger Points and Management Response
- 18. Key Performance Indicators
- 19. Key Assumptions
- 20. Conclusion
- A. Appendix A: Consolidated Financial Summary
- B. Appendix B: Capital and Pre-Opening Schedules
- C. Appendix C: Funding and Debt Schedules
- D. Appendix D: Risk Register
- E. Appendix E: Glossary
The following are the operating measures on which this plan should be managed. Three of them — gross margin on completed months, cash on hand and creditor days — carry more information about survival than any revenue figure.
|
Indicator |
Definition |
Target |
Why it matters |
|---|---|---|---|
|
Trading density |
Revenue ÷ gross lettable area |
R52 773/m² by Year 5 |
The single comparable measure against the national benchmark |
|
Achieved gross margin |
Gross profit ÷ revenue |
52.2% by Year 5 |
Three points below plan costs R76 056 of Year 3 EBITDA |
|
Markdown as a share of sales |
Markdown value ÷ revenue |
Below 3.4% by Year 5 |
The largest controllable drag on the initial mark-on |
|
Shrinkage |
Stock loss ÷ revenue |
Below 0.9% by Year 5 |
Each 0.5 point is R12 676 at Year 3 revenue |
|
Units per transaction |
Units sold ÷ transactions |
Above 1.62 |
Each 0.1 is R156 494 of Year 3 revenue at no extra cost |
|
Stock turn |
Cost of sales ÷ closing inventory |
3.8x by Year 5 |
Overbuying is the primary cause of independent fashion failure |
|
Occupancy cost ratio |
Occupancy ÷ revenue |
Below 10% at maturity |
The constraint that eliminates every regional mall |
|
Creditor days |
Payables ÷ purchases × 365 |
40 days by Year 5 |
Each Year 1 day released R2 925 of cash |
|
Cash on hand |
Month-end bank balance |
Never below R100 000 |
The Year 1 trough is R116 922 |
|
Debt service cover |
EBITDA ÷ interest and capital |
Above 1.25x from Year 2 |
Negative in Year 1 by construction |