Untitled - JDA Software

The 400-store apparel retailer, which operates the
Charlotte Russe and Rampage mall-based chains, had a need
for speed, and invested in systems to give it agility in managing
its business — moving with fashion trends.
Banks on IT for
Fast-Fashion Payback
particular system on the market, much
harlotte Russe Holding Inc.
less a lot of time to spend in the trenchhas faced off to a tough tries on a major rollout, Wong says. The
angle of cross fire: the need
firm needed an IT vendor it could trust
to keep fresh fashion in front of the
to devote resources necessary to get the
consumer while selling more goods
systems installed within its tight target
at top dollar while fueling rapid
timeframe, he says.
expansion plans. It met these chalCharlotte Russe needed new systems
lenges head-on by betting on a
urgently because of its aggressive growth
hyper-accelerated IT systems impleagenda. Its long-range plan calls for the
mentation.
Charlotte Russe chain to grow from 332
The San Diego-based apparel
to 500 stores, and for Rampage to expand
retailer gave itself a five-month winfrom 67 to at least 200 stores. In the late
dow to complete a pilot rollout of
’90s, Charlotte Russe had just more than
retail enterprise systems from JDA
60 stores and Rampage fewer than 20.
Software Group, Inc. within its
In recent years, the retailer started to
Rampage chain, the smaller of its two
Ed Wong (L) and Mark Hoffman (R) set a
outgrow
its legacy IT systems as both
store brands. When this mission was
tight timeframe for a major implementation
chains
expanded
their reach dramatiaccomplished, it set the stopwatch
of JDA’s retail enterprise systems at
cally, says Charlotte Russe president
Charlotte Russe – and stuck to it.
ticking on JDA systems installation
and CEO Mark Hoffman, who joined
within its core Charlotte Russe retail
the firm four years ago from Pacific
business.
Sunwear of California, where he was COO.
Target timeline: Seven months.
“You have to constantly review your support systems,”
This February, the firm successfully finished the entersays
Hoffman. “You have to stay ahead of the curve … and
prise-wide project on schedule.
avoid
playing catch-up.”
How did Charlotte Russe manage to implement sysHoffman
says he expects the firm’s software implementems so quickly when others have taken years to finish
tation
to
“pay
significant dividends,” and that he and
multistage projects of similar scope? Ed Wong, senior vice
Wong
hold
“a
strong
conviction” that Charlotte Russe will
president of supply chain and systems for the retailer, says
be
able
to
measure
improvements
in its business that are a
the firm frankly could not afford to have it any other way.
direct
result
of
its
systems
investment.
As it embarked on its technology vendor selection,
Charlotte Russe realized its internal IT department was
extremely lean, and did not have deep expertise of any
C
Special Fea ture by Ka thleen DesMarteau, A pparel
APPAREL
apparelmag.com
SYSTEMS AT A GLANCE
Retail Enterprise/Merchandise
Management: JDA: PMM
Planning/Allocation: JDA:
Arthur Planning Suite
Business Reporting/Analytics:
JDA IDEAS, Business Objects
WMS: Manhattan Associates
PkMS
POS Data Collection: Fujitsu
e-Tail: A Far Site Better
(Rampage only)
apparelmag.com
APPAREL
H ow IT Is He l pi ng
Charlotte Russe’s sales are expected
to reach $600 million this year, up from
about $540 million in the last fiscal year.
Its challenge is to reap net income
growth that is more in sync with its
strong revenue growth. Capital expenditures and greater-than-expected merchandise markdowns have eaten away at
net income.
The firm’s new merchandise management and planning systems give it
much greater visibility into sell-through
trends by store cluster, Wong says.
Charlotte Russe is using this information to better plan promotions, pricing
strategy and allocations — both preseason and in-season. Using the JDA
systems as well as software from
Business Objects, the retailer has developed a successful model for measuring
the performance of different age groups
of merchandise.
Wong would not share specifics
about this age-based grouping and
tracking because it is a core competitive
advantage in how Charlotte Russe has
structured its systems to leverage technology to propel its business. He did
share that at a high level, Charlotte
Russe is analyzing and reacting to sellthrough trends for apparel that is considered “freshest” vs. merchandise that
has been in the stores for a couple of
months vs. inventory that is significantly older.
Charlotte Russe is grouping merchandise sell-through and inventory
data into different “buckets” defined by
the age of the product, and systematically linking that information with its
knowledge of historical sell-through
trends for different store clusters.
Store clusters are determined not
necessarily by geography but by con-
sumer buying trends. For instance, there
may be a cluster of stores defined by
their tendency to have more full-price
shoppers. Another cluster may be linked
Charlotte Russe’s new
merchandise
management
and planning systems
give it much greater
visibility
into sell-through trends
by store cluster.
by a strong footwear/accessories business as a percentage of overall sales.
Using analytical business systems,
Charlotte Russe planners can more easily weigh all of these variables as they
make allocation and replenishment
decisions, says Wong. They also can use
the information to determine when to
— and when not to — markdown merchandise because they have more insight
into the retailer’s inventory position by
product and store cluster.
It ’s A ll a bo ut Fa shi on
Charlotte Russe buys market goods
for its stores. It relies on vendors (85
percent domestic, 15 percent international) to interpret the latest fashion
styles into merchandise bearing the pro-
prietary Charlotte Russe and Rampage
brands. It also sells some national
brands in Rampage. It has a small
design department that guides vendors,
buyers and planners on fashion direction.
At the heart of Charlotte Russe’s
breakneck-paced IT implementation
was a need to keep pace with fashion,
says Wong, who came to the firm in
December 2003 after working at
Factory 2-U and Gymboree, among
other companies.
Using technology to forecast fashion
trends based on historical data is not
always realistic, says Wong. Embellished
tops may have been hot sellers this year,
but they will not necessarily sell next
year.
Realizing that much of its success as
a fast-fashion retailer rests in quick
response to market trends, Charlotte
Russe focused its IT investment on
tools that would enable it to respond
with lightning speed to what is happening on the store floor and in the fashion
world.
Wong says Charlotte Russe is concerned most with its vendors’ “fashion
ability” and is less focused on their IT
capabilities. The retailer uses its IT
infrastructure to determine what to sell
and how to allocate, price and replenish
it, Wong says. Then it counts on its vendors to fill its pipeline to the consumer
per its carefully crafted plans.
As Hoffman concludes: “We have the
supply chain to support our growth,
and now we have automated systems to
support it.”
K ATHLEEN DESMARTEAU is editor in
chief of Apparel and may be
reached at 864-627-0276 or
[email protected].
Adapted from the October 2005 issue of Apparel. © Edgell Communications, Inc. For more information about reprints from Apparel,
contact PARS International Corp. at 212-221-9595.
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