California Apparel News

NEW YORK—With a far-flung retail empire in 87 countries and $2.12 billion in revenues, Guess? Inc. is like many major apparel companies grappling to connect its worldwide staff of employees to work efficiently.

To do that, Guess has incorporated a number of software systems that help stores in Ankara, Turkey, look like fashion outposts in Paris. They allow designers in Los Angeles to interact with the creative staff in Florence, Italy, while both offices are able to stay on the same page with the sourcing office in Hong Kong.

“As a manager, it is a pain,” said Mike Relich, executive vice president and chief information officer at Guess, the apparel maker and retailer founded in Los Angeles by the Marciano family in 1981. “We have different cultures and languages to support. Different currencies create problems. There are different business practices.”

In the United States, Guess’ business is primarily retail with its 480 owned stores. And in Europe, where franchisees are primarily in charge of the Guess shops, it is 75 percent wholesale. “What I needed was a common picture,” Relich said.

To create that common picture, Relich ventured out more than four years ago to set up a PLM (product lifecycle management) system that takes the company from concept to purchase order. “When we talk to a vendor, it all comes from the same system,” Relich said, noting that all styles are created in PLM and classified by fabric and color.

Not that creating a PLM system for an apparel empire is easy. Relich, speaking at the 2010 Tech Conference, organized by Apparel magazine Nov. 10–11 at the Fashion Institute of Technology in New York, said he has the “wounds from the arrows in his back” to show for his efforts. “This was the most difficult and worst project, but it turned out to be the most successful,” he said.

To deal with the disparate nature of an apparel company—think creative forces versus straight-laced business types—Relich organized 87 hours of required sessions where employees would tell the software people what they wanted in a PLM system. The PLM system takes the process up to the purchase-order level. From there, Guess uses TradeCard to fill in the purchase order–to–payment phase, which synchronizes financial transactions.

For its assortment plans, Guess has eliminated the use of spreadsheets and incorporated a software system known as Da Vinci in all its U.S. stores. Next year, the software program will be rolled out in Guess’ European stores. “It is very small and visual, and our buyers like it because it mimics spreadsheets. We are able to cluster stores by demographics and volume, and then buyers can tailor their assortments to these clusters. We are experiencing higher sell-throughs,” Relich said.

For markdown optimization, Guess is using APEX, a software system that helps the apparel company forecast demand and through which it can take markdowns to stimulate more demand.

Guess has signed up with Micros3 Export for its point-of-sale system. One advantage of this software is it allows the retailer to set up a loyalty program for customers.

In a few weeks, Guess will be rolling out a mobile point-of-sale system at a dozen locations in the United States.Retail revolution

The world of retailing is undergoing an evolution, and technology is playing a major role. Scott Bonar, senior product consultant for Escalate Retail, highlighted a number of innovative retail programs rolled out by forward-thinking retailers that want to “break through the noise” of information being thrown at customers.

Bonar noted that on Sept. 21, Burberry live-streamed its Spring/Summer 2011 collection into 25 flagship stores around the world. Customers were invited to view the collection on high-definition screens and then order pieces off the runway, getting items seven weeks later, often before they appeared in stores.

Recently, Nine West introduced a line of boots on Facebook, using the social network as the only place to buy the boot when it debuted.

Los Angeles retailer Hot Topic has a program called ShockHound, which lets its customers build their own websites to sell Hot Topic merchandise and receive a commission.

“The key is engagement,” Bonar said, noting that Escalate Retail helps stores reach customers across all selling channels.RFID tags are it

While the first tagging revolution in retail was the bar code, the second revolution is the RFID (radio frequency identification) chip, which uses electromagnetic waves to exchange information. It makes inventory tracking more efficient and helps manage merchandise. “RFID clears the fog between the distribution center and the store exit,” said Larry Arnstein, director of business development at Impinj Inc., which has 100 RFID apparel programs worldwide.

With RFID tags, retailers don’t need line of sight to assess inventory. They can walk down the aisle with a hand-held device and find out what is on a shelf or in a box by reading the RFID tags.

RFID tags, Arnstein said, help decide when to replenish stock, make inventory assessment easier and fight shoplifting. Beginning Aug. 1, Wal-Mart Stores Inc. began embedding RFID tags in all its men’s blue jeans and underwear.

Arnstein said that retailers are quickly adopting this new tagging method. But for some, it can’t come fast enough. An initiative is underway to get retailers to standardize the use of RFID technology throughout the global supply chain and see RFID implemented across the board.

Taking the lead is the Voluntary Interindustry Commerce Solutions Association, which wants to improve the efficiency of the supply chain and see RFID tags employed throughout retail stores. Currently, an RFID tag costs between 7 and 10 cents. As more tags are deployed, the cost could decrease to help retailers save money.

“It is going to require a lot of collaboration, and we are setting up the framework for that,” said Bill Connell, senior vice president of logistics and operations at Macy’s Inc., who is helping with the RFID initiative. “Decisions are driven by data, such as style, size, color and markdowns. We have been on a quest for years to improve that accuracy,” Connell said.

Several RFID pilot programs have been conducted at various retail chains. Connell said Bloomingdale’s, a division of Macy’s, undertook an RFID pilot program this year at its SoHo store in Manhattan, tagging every product category except footwear and cosmetics. The result was RFID helped the store managers know what merchandise was moving quickly and what wasn’t. In the end, merchandise turned faster through improved replenishment plans, fewer markdowns were taken and inventory accuracy rose to 97 percent.

Next year, Macy’s is planning to test the RFID pilot program in more Bloomingdale’s and Macy’s stores, and by 2012, rollout capabilities will be undertaken in additional stores.

“We believe that RFID is the next big supply-chain transformation for Macy’s and the retail industry,” Connell said. “It makes us better shopkeepers.”