You are Claudia Ríos, two months into the job as chief executive of Maravillas del Hogar, a chain of 28 home-improvement stores in Peru. Tomorrow, 12 May 2027, at nine, the board expects the first part of your recovery plan: how many products the chain will keep selling. The slide is still blank.
The situation
Maravillas sells building materials, tools, plumbing, electrical goods, paint, garden, décor and security products to middle- and lower-income families, with technical advice in store. In 2026 it billed 620 million soles, with EBITDA of 56 million (a 9.0% margin), and holds 12.5% of the market. Neighbourhood hardware stores still take about half of all sales, and two larger chains, Ferrandina and Casalto, are opening stores in Lima Norte and Lima Este, where six Maravillas stores make 38% of its sales.
The board put inventory first: 168 million soles, 99 days of sales, against about 60 at Ferrandina and Casalto. Of that, 42 million is stock that has not sold once in more than 180 days, mostly out-of-season garden goods and badly bought décor. All of it is financed on a revolving credit line at 14.2% a year.
The catalogue has 24,800 products. The 800 best sellers make 68% of sales; the 21,600 slowest make 8%, yet hold 41% of the inventory's value. The board will judge the plan on three numbers: inventory days, EBITDA margin and GMROI, the annual gross margin each sol of inventory earns.
Your team does not agree. Renzo Talavera, the commercial director, defends breadth: customers come because they find everything, and if things are missing they go to the hardware store on the corner. Mariela Chávez, in finance, thinks about the bank: every product that does not sell is being paid for at 14%. Javier Ñique, in operations, is already tightening store replenishment, which will take off a few days but leaves the range untouched. Just after ten at night, Talavera writes: the manufacturer Hartvik wants to know, before July, how many products the chain will carry.