Ramón Pavía

Operations Director | Grupo Adagio

"We have achieved a €1m reduction in inventory"

Adagio increases stock turn by 40% as turnover increased from €35m to €45m thanks to Slim4

As a distributor and retailer, Adagio Group understands the importance of maintaining an optimal level of inventory to maximise the profitability of the company. To achieve its objectives, Adagio Group relies on Slimstock’s inventory optimisation solution, Slim4. Within just 12 months of implementing the supply chain solution, Adagio Group has managed to reduce inventory levels despite a €10 million increase in turnover: all while increasing the service level to 94.5% across the best-selling products.

Established as a family business more than 40 years ago, Adagio has gone on to set the benchmark for musical instruments and professional sound equipment. Despite the increasingly competitive nature of the music industry, Adagio remains a family owned business and the same values and passion for distributing musical equipment hold true today.

Since opening the first store in Barcelona, the company has grown significantly to become a key distributor of the leading music and sound brands across a number of countries including Italy, France, Spain and Portugal. With a solid network of 45 stores, the business has strengthened its presence in a number of key markets. However, following the business’ venture into e-commerce, the team at Adagio needed a solution that could support them in managing a larger number of brands which, unless managed effectively, could increase the stock value and impact the online sales margins.

Results delivered in just 12 months

In 2016, Adagio Group took the strategic decision to implement Slim4 to help the business realise its objectives: manage the growing number of suppliers and a spiralling assortment of over 7,300 active SKUs, improve service levels and fine-tune the inventory to the demands of the market.

“In just one year we have increased the stock turn by 40%, which is a huge achievement. In addition, we have increased the service level from 85$ to 93%. Thanks to Slim4, we have also managed to reduce shrinkage and increase our turnover. In a retail environment with many locations like ours, this is crucial as if the right stock is not available, we simply will not make the sale,” explains Ramón Pavía, Operations Director of Grupo Adagio.

Reduced inventory amidst a €10m increase in sales

Since the introduction of Slim4, the company has increased its turnover from €35 to €45 million euros while simultaneously reducing the level of inventory. “Although our sales have increased, our inventory levels have remained stable. In fact, we are already starting to reduce them. When we started with Slim4, we had €7.5 million of inventory. Following the acquisition of Letusa, one of the leading Spanish distributors in the sector, the inventory value grew to €10 million euros.

However, after working with Slimstock for just 1 year, we are almost back to where we were but with €10 million worth of additional revenue. In addition, our latest reports demonstrate that we have achieved a further €1m reduction in inventory: a positive trend indeed,” explains the Director of Operations.

Product lifecycle optimisation

With more than 100 brands and 115 suppliers to manage, for Grupo Adagio, it is very important that discontinued products are managed effectively. Given that the suppliers influence the collections for each new season, obsolete stock is a risk factor for Adagio. “Slim4 allows us to make the right decisions and adopt the right tactics to ensure that at the end of the product lifecycle, there is no obsolete stock.”

Ambitious goals

“Our goal is to continue increasing the sales. We want to achieve a turnover of €50 million, incorporate more brands and expand into more markets across Europe. More importantly, we hope to achieve all of this while maintaining the same resources and inventory level.” The Operations Director goes on to conclude: “I have no doubt that Slimstock is the partner to help us achieve this.”