Kasi Kicks Business Plan — Sensitivity and Scenario Analysis

What moves Year 5 EBITDA: pairs sold, average selling price, markdown rate and allocation, with downside and upside scenarios.

Sensitivity and Scenario Analysis

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10.1 What moves EBITDA
10.2 Scenarios
10.3 The downside: poor allocation and a broken size curve
10.4 Where the plan is deliberately conservative

10.1 What moves EBITDA

Figure 22. EBITDA sensitivity at maturity.

Driver	Downside (R)	Upside (R)	Swing (R)
Average selling price ±6%	5 794 678	14 823 141	9 028 463
Units sold ±12%	6 995 497	13 622 323	6 626 826
Full-price sell-through ±8 points	6 998 572	13 619 248	6 620 676
Landed cost ±8%	7 109 360	13 508 460	6 399 100
Size curve discipline ±5 points of sell-through	8 239 887	12 377 933	4 138 046
Fixed costs ±10%	8 639 477	11 978 343	3 338 866
Base case Year 5 EBITDA	10 308 910

10.2 Scenarios

	Downside	Base	Upside
Volume assumption	-14%	As modelled	+10%
Price assumption	-5%	As modelled	+4%
Landed cost assumption	+7%	As modelled	-3%
Year 1 EBITDA	(2 284 642)	(1 144 734)	(260 192)
Year 3 EBITDA	(1 082 663)	4 420 064	8 693 425
Year 5 EBITDA	850 151	10 308 910	17 658 485
Year 5 EBITDA margin	1.1%	13.7%	23.5%
Cumulative EBITDA, Years 1 to 5	(4 416 613)	23 133 530	44 533 352

10.3 The downside: poor allocation and a broken size curve

What happens when the range is wrong and the buy is flat

The downside case assumes volume 14 per cent below plan, selling prices 5 per cent lower and landed costs 7 per cent higher. On those assumptions EBITDA remains negative through Year 3 and reaches only R850 151 in Year 5 against R10 308 910 in the base case, with cumulative EBITDA over five years of negative R4 416 613. The mechanism is not a general downturn. It is specific and it compounds: the brands allocate less premium product than the plan assumes, so the mix shifts toward carryover at R257 a pair against R812; the assortments arrive pre-packed and are bought flat rather than to the curve, so full-price sell-through falls from 73 per cent toward the industry’s degraded 50; and the residual stock is marked down at 55 per cent, where a pair loses R36. Each of those three failures makes the next more likely, because poor sell-through is exactly what the brands use to decide next season’s allocation.

A group in that position does not fail suddenly. Stock is realisable, the leases can be exited at a cost, and a two-store business can be run profitably by an owner who buys well. What is lost is the chain — the central function, the planner, the online channel and the growth case that justified the equity. That is the realistic downside: not insolvency, but reversion to a good independent shop that returns very little to an outside investor.

10.4 Where the plan is deliberately conservative

Assumption	Treated in the base case as	What is left on the table
Allocation improving with sell-through history	Held flat at 4% limited and 26% premium general release	Brands allocate on history. Two seasons of strong sell-through should improve the mix, and the plan assumes none of it
Stock turns	Held at 4.2 against an industry median near 4.4	Reaching the median would release roughly R450 000 of working capital at maturity
Full-price sell-through	Held flat at 73% across five years	A team that learns the curve should improve on its first-season buy; no learning effect is modelled
Online share of units	18% by Year 5	South African e-commerce is growing faster than that, and click and collect drives store footfall as well
A fifth store	Not modelled	The central function is fully carried by four stores; a fifth would add contribution against almost no incremental overhead
Terminal value	5.0x Year 5 EBITDA	A substantial part of the value is realisable stock, which sets a floor most specialist retail does not have

None of these is included in the base case and none should be relied on. They are listed because a reader comparing this plan against a more optimistic one should know which direction the conservatism runs. The most material is the first: allocation is modelled as static across five years, when in practice it is the reward for exactly the sell-through discipline the plan is built around. If the size-curve work delivers, the range should improve — and the range improving is worth more than any of the other five.

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