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Case Study

UrbanLuxe: Supply chain and M&A

By Ralf W. Seifert and Richard Markoff

2 pages

June 2025

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Reference: IMD-2654

This brief case exercise presents an increasingly common business scenario: An established player acquires a small, agile start-up to re-energize its value proposition. In this case, established global beauty giant UrbanLuxe acquires beauty start-up KYX. UrbanLuxe represents an old-school company selling a classic portfolio mainly via traditional distribution channels of luxury and travel retail, whereas KYX is exclusively an e-commerce brand. UrbanLuxe has a stable – perhaps stale – product line while KYX is in constant experimental churn, with an influencer-based media strategy that brings inherent demand volatility. The supply chain director is tasked with identifying the supply chain risks and opportunities associated with the acquisition. The two companies are different from both an operations perspective and a marketing perspective. UrbanLuxe has five factories servicing a global demand. KYX relies on one co-manufacturer focused on the US market. UrbanLuxe distributes to classic retailers from its own warehouses, KYX uses a third-party logistics provider for its exclusively e-commerce business. Further complicating matters, UrbanLuxe’s CEO has ambitious growth plans to make KYX a global brand. The supply chain director must not only consider integrating the acquisition but also supporting the growth strategy, for which they are asked to find cost savings to provide funding. The case provides a vehicle for students to consider the supply chain challenges a company might face in successfully integrating a starkly different acquisition. This case anchored in the real world will elicit universal challenges in companies today.

Learning Objective

The key supply chain risk factors in an acquisition.
How the supply chain model is closely tied to the business model.
How strategic supply chain decisions often cannot be siloed from strategic business decisions.
The same industry can exhibit wide supply chain variances among companies, each with its advantages and disadvantages.
The potential difficulty of integrating separate supply chains and IT systems.

Keywords

Supply Chain, Mergers and Acquisitions, Operations, Strategy, Integration

Type

Generalized Experience

Available Languages

English

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