California Apparel News

Many technology vendors are adopting the buddy system as a way to stay competitive during a challenging time. Be it through mergers and acquisitions or marketing partnerships or joint ventures, teaming up with rivals has become a way for business to expand in a constricting economic environment.

Tech companies have been gaining momentum over the past 18 months thanks to emerging products such as PLM software and RFID, and they don’t want the souring economy to break up that momentum. However, it may be catching up with some.

Last month, Tolland, Conn.–based Gerber Technology announced a round of personnel layoffs. Gerber executives said the move was more for positioning itself better for the downturn rather than a result of current business.

“It’s nothing new. It’s tough for the apparel industry right now,” said Peter Jennings, a sales executive with Westlake Village, Calif.–based software vendor Dynamics Perspective Inc. (formerly Porini USA). “We’re on hold with about a half-dozen sales, but we’re also going forward on about a half-dozen sales right now.”

Jennings said there’s a segment of medium-size companies in the $100 million to $200 million range that are growing exponentially and have already budgeted in technology.

Dynamics Perspective’s parent company, Porini Srl, was recently sold to Gruppo300sessanta Srl. The U.S. division will remain a unit of Blue Fox Enterprises N.V., operating in California and New York and selling Porini products as well as Microsoft Dynamics ERP and PLM software.

Mike Burkett of Boston-based AMR Research said he expects to see delays in closing deals between tech vendors and manufacturers.

“Everybody’s doing a wait-and-see right now,” he said. “They’re waiting to see what will happen with credit and the economy even in the next month.”

Burkett said the key factor to investments moving forward concerns the actual costs being incurred. Many projects are moving forward. However, if it requires spending, there may be delays, he said.

As the economy remains challenging, a number of joint ventures are being put together because they are usually marketing- or sales-based and do not require much investment, Burkett said.

Even leading providers such as Gerber have reached out to industry partners such as ECVision to help round out its new fashion lifecycle management (FLM) product.

“It’s a way of getting something you don’t have,” said Tamara Saucier, director of industry solutions for apparel and footwear for Lowell, Mass.–based Enovia, which recently teamed with Zymmetry to bring product development and sourcing together for one application.

Miami Lakes, Fla.–based New Generation Computing, one of the leading PLM suppliers, recently aligned with Winston Salem, N.C.–based Sunrise Technologies so that Sunrise can complement its Microsoft Dynamics AX ERP product with NGC’s e-PLM and e-SPS PLM and sourcing applications.

“It was a no-brainer for us. We see it as an opportunity to expand in the PLM and sourcing marketplace,” said Fred Isenberg, NGC’s vice president of sales. Isenberg said he thinks it would be a mistake for companies to hold off on technology investment, saying it will be important to be equipped when business turns up again.

Andrew Dalziel of Minneapolis-based Lawson Software agreed. “The business models have changed for many, and many [retailers and manufacturers] don’t have the systems to support those changes. This may be a time where companies have the breathing space and take time to make investment.”

Lawson was missing a PLM module and went out and got one via the acquisition of San Francisco–based Freeborders.

“We had a product gap. Freeborders was designed for the apparel industry, has a good customer base and a vision of the future,” Dalziel said.

Ray Hein, executive vice president of market strategy and development for Campbell, Calif.–based PLM provider Centric Software, said he has seen business fall into four categories: leaders, idlers, rebuilders and laggers.

“The leaders continue to invest and look for ways to optimize their businesses and move from good companies to great companies. The idlers are dumb and happy. They’re getting by but feel they have no reason to change. The rebuilders are taking their lumps and are investing to get back into the game. The laggers procrastinate, and some will ultimately perish.”

Centric recently signed on retailer InterSport France to help it build up its private-label business with PLM.

The company’s private-label business unit manager, Nicolas Thibault, emphasized that time is money, especially in a tough economic climate.

“To get our collections into stores on schedule, we must have definitive samples or the entire season’s delivery schedule can be affected. Yet valuable time was being lost as we went back and forth with the suppliers, answering questions or requesting changes because we provided inconsistent information in our technical-design files.”

Because design information is now centralized, an assistant can access files, answer questions and keep the process moving forward when a product manager is out of the office, Thibault added.

In Enovia’s partnership with Zymmetry, Enovia’s PLM design/development tools melded with Zymmetry’s sourcing application for a new product called the Apparel Accelerator for Sourcing and Production to bring a more balanced sourcing and design application to the marketplace.

But the partnership goes beyond product offerings, said Enovia’s Saucier. “We’re the biggest investor in research and development, so we were looking beyond the core application and at their domain expertise, as well,” said Saucier, who explained that Zymmetry’s parent, the Wing Tai conglomerate in Asia, has a broad range of development and sourcing infrastructure to bring to the table.

The partnership should help both companies stay competitive as the marketplace shrinks, she said.

Centric’s Hein said companies are favoring more “best of breed” applications—that is, picking the best PLM they can find rather than buying into a package deal.

“We’re still bullish,” he said. “The apparel industry is still going to grow, but it will do more with less.”