Scotch & Soda’s CFO Suzanne Smit: ‘We built a completely new company in four months’
A Bumpy Ride
International fashion brand Scotch & Soda experienced a bumpy ride in the last few years. The European branch went through a restructuring and eventually went bankrupt. CFO Suzanne Smit witnessed it all from the financial heart of the company and reflects with Marble Myrna on the most valuable lessons learned during that time.
Tell us, how did you become the CFO at Scotch & Soda?
‘I was invited by the previous CFO, who was also the one who initiated the restructuring of Scotch & Soda Europe – he became the CEO. I was already handling the finance of Scotch & Soda for all European countries, so eventually he asked me to join him as his new CFO.’
What was it like being the new CFO?
‘We were not allowed to use the old systems by the administrator. Moreover, they were too large and cumbersome anyway for the new, leaner company, so we built a completely new organization in the following four months.’
Wow!
‘Yes, it was of course a huge task – we had nearly a hundred stores in different countries at that time. But we also had the opportunity to reorganize all the processes. Simpler, cheaper. We moved from our own servers to a system where we put everything completely in the cloud. Our ERP package was discarded, and our website moved from a large Salesforce platform to another website provider. This significantly reduced costs: from a few million per year to around €500,000 per year.
Bizarre! Although I can imagine it’s not necessarily recommended to operate without an ERP system?
‘I have to say, I look at ERP systems differently now. We did have an inventory and POS system, so we didn’t need a large finance package. We worked with Twinfield, which was connected to our cloud systems via an API. And we had a skilled team member who was good with Excel and had built templates, so the manual work wasn’t too bad.’
What finally caused the bankruptcy?
‘We were mainly struggling with logistical problems. Deliveries arrived late at the store, so you’re stuck with stock. You can’t recover that quickly anymore, because you are bound to the seasons – your summer collection can only be sold in your outlet a year later. So your margins drop, affecting purchasing for the new season.’
How was it for you to experience a bankruptcy as a CFO?
‘Very mixed feelings. It was actually an incredibly refreshing and educational time. We had a wonderful task, and the team was incredibly strong. There was a lot of trust, also in each other. It feels like we ran a marathon but just didn’t reach the finish line.
Personally, I felt mostly responsible for my team. That’s the saddest part, that it ended for us as a team; I would have loved to continue with them.’
What are your three golden tips for scale-up CFOs?
1. Create a clear cash flow overview
‘If the cash stops, the company stops. A cash flow overview is essential, even if the company is doing well. It allows you to better steer towards the future and prevent potential dips in income from coinciding with large payments to key suppliers. Employees, for instance, are essentially the most important suppliers because without them you can’t do anything. A good cash flow overview also shows where you’re spending money and whether it’s on the right things.’
Myrna: So, manage from cash rather than costs?
‘Yes, because some costs are capitalized. The P&L often consists of provisions, not CAPEX investments. From the cash flow, you can also see: where do I get the most money back now, where are my revenues coming from?’”
2. Build a fantastic team
‘You need a team that you can go to war with. During the restart, I had such a team – we really did it together. There was no island mentality; everyone took on unpleasant tasks or helped each other out. Everyone had the drive to work very hard. In the case of a restart, I also learned that your team is initially larger – because you have to set up many processes in a short time – but can slim down afterward.’
Myrna: How do you build such a fantastic team?
‘Ensure different qualities within your team. I had a team member who was very good at bookkeeping, another was keen in Excel. This way, everyone excels in their own area. Trust in each other is also very important. You can create that consciously. At Scotch & Soda, I scheduled team sessions at some point, where we went back to basics. Who are we? What are we good at, and what are we not good at? If you understand each other’s background, you can work together better.’
3. Create positivity
‘The atmosphere in the team must be good. Someone who goes to work happily works harder, can do more, and thinks they can achieve more. Conversely, if there is a lot of negativity, you can end up in a spiral where nothing works anymore.’
Myrna: How do you ensure that positivity?
‘Stay open and honest with each other. If you notice that someone is not doing well, address it. Have a coffee together: what’s going on? Do you want to talk about something, can I help you? If you don’t talk about it, it will smolder. And set a good example yourself. Don’t be the one who only assigns tasks, but occasionally take on an unpleasant task yourself. Sometimes you find out how positive your team is during tough times. During the bankruptcy, I was mainly concerned about my team, but they were asking me if I was okay. Very special.’
“You need a team that you can go to war with. During the restart, I had such a team – we really did it together.”
The route to CFO of Suzanne Smit
Suzanne Smit started her career in 2008 at KPMG as an audit manager. After six years, she moved to Scotch & Soda, where she started as an accounting & tax specialist in 2014. She progressed to financial controller, group manager General Ledger, and accounting & reporting director. In 2023, she made the step to CFO.
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