March 2006 – London – Later
this month, a new Guess store opens its doors in
Portsmouth, England. A further +180 new stores are
planned over the next three years, as part of an
aggressive new strategy to develop the US fashion
brand in Europe. According to Luca Tacchi, IT director
for Guess Europe, so many new stores means a much
greater need to manage the business more efficiently.
And he acknowledges that without integrated retail
technology, the company’s ambitions could
not be achieved.
The expansion has already started in earnest, following
the recent opening of London’s flagship store
in Covent Garden at the end of 2005, as well as many
others in all Europe, where the brand now has over
twenty company-owned stores. Guess says it plans to
expand further through a franchise-style system of ‘sub-licensing,’ which
is already popular in southern Europe. It means more
autonomy for the retailer, although inventory still
being supplied by the brand. Typically, the franchise
partner secures a suitable location and then works
closely with Guess European headquarters in the running
of the shop.
Guess currently has around twenty more franchise-style
outlets spread mainly across southern and eastern
Europe. A large wholesale business in Europe is also
supported through hundreds of concessions operating
through department stores and independent fashion
retailers. Globally, the brand has become a $1.2 billion
multinational retailer with over five hundred stores
worldwide.
Euro Expansion
Many other fashion retailers, including Naf
Naf, Sara
Lee and Calvin Klein, have expanded along similar
lines. They all rely on VCSTIMELESS technology, which
provides them with the necessary multi-lingual and
multi-currency platforms to manage complex inventory
needs, whether from a store, retail head office, or
overseas franchise.
“
We’re finding more and more fashion brands looking
at shared licence agreements as a low-risk means of
expanding across Europe,” says Tania Oakey,
marketing director at European software vendor VCSTIMELESS. “Yet
not all Anglo-Saxon or American retail software
systems cater for the franchise, wholesale and multi-channel operations typical of Europe.”
Forecasting Fashion
For Guess, the use of the VCSTIMELESS Colombus
retail management suite has led to improved stock
and service levels, since installation began in 2005.
All company-owned
stores are now kitted with a store interface which,
via the internet, gives instant links to the head
office in Florence, Italy, and allows them
to monitor new product lines or check on stock availability.
From head office, a team of fourteen people in the
IT department can now see what stock is left in each
store, as well as look at the best ways of avoiding
lost sales or heavy discounting, because of either
too much or too little merchandise left on the shelves.
In-depth analysis of sales data is made easier using
a business
intelligence module, called Colombus
Optimum.
Tacchi says that the software has helped the company
enormously
in decision making, especially when it comes to planning
sales promotions. Reporting has also greatly improved,
he says, “thanks to a constant exchange of information
with stores, as well as scorecards for management
and reports to the US corporate headquarters in Los
Angeles.”
Generally, all products are reviewed on a weekly basis,
and the software works by looking for anomalies and
weighing them up against current stock levels and
other variables, such as seasonal sales patterns,
price or profitability. The software then comes up
with a ‘best-fit’ to satisfy forecasted
demand and suggests what products any store should
be stocking to meet the needs of their local market.
“
Previously, everything was manual, and we had to regularly
telephone every store to say what stock was available,
and ask what they needed,” says Tacchi.
The Guess IT department intends next to focus on automated
replenishment, with a planned project completion date
by the end of 2006. Given that Guess will shift its
production of shoes to China later this year, Tacchi
says that automated replenishment, and the need to
monitor the supply chain over long distances, will
become even more crucial. Currently, most of the European
merchandise is manufactured in Italy, with some products
purchased direct from Guess in the US. It is also
considering adding another VCSTIMELESS module, Colombus
Regional, which gives greater control and autonomy
to overseas stores, whilst allowing them to continually
stay in touch for stock requirements. This, says Tacchi,
is particularly useful for countries like the UK,
where Guess firmly has its sights fixed.
“ A more autonomous, yet
linked, IT system gives retailers more freedom over
pricing, for instance; and the IT
investment costs are offset when you have more than
just a hadful of stores in one country.”
Tacchi acknowledges that without the software, Guess would no longer be able to manage the entire infrastructure.
And given the plans to massively expand the number
of overseas stores through more franchise networks,
a shared integrated system is vital for everyone,
he says.
“
With appropriate technology in place, there’s
no longer any need to ‘Guess.’ Especially
when it comes to decisions over stock, the most important
- and costly - consideration in fashion today.”
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