Perry Ellis’ IT Priorities
Whether merchandising for its retail stores, retail partners, or its new e-commerce sites, Perry Ellis International’s main goal for 2007 is to deliver product based on its consumers’ needs. By leveraging a new retail platform, Perry Ellis’ plans are right on target to improve its merchandising and markdown operations, as well as its store-level and online customer relationships.
The Miami-based company features a portfolio of 27 well-known brands, including Perry Ellis, Axis, Savan, Farah, Original Penguin, Cubavera, Ping Collection, Nike Swim and Jantzen. The company, which had $849.41 million in sales in fiscal 2006, sells this merchandise across 12,500 locations, including its own Perry Ellis outlets and Penguin boutiques, as well as throughout high-end department stores, including Nordstrom and Neiman Marcus.
“Building a business on multiple brands and multichannel distribution means we must focus on our customer needs,” Luis Paez, Perry Ellis’ CIO, told Chain Store Age.
“We do this by mining point-of-sale data collected from each location. We also use Geographic Information System [GIS] software and custom programs to predict trends and analyze POS down to the SKU at store level,” he added. “These strategies enable us to target the right product to the right market.”
Based on past successes, Paez expects this strategy to fuel the company’s future expansion. Besides selling branded merchandise across retail customer locations, for example, Perry Ellis hopes to add 200 more boutiques—including Perry Ellis-owned banners as well as real estate within its retail partners’ sales floors—within five years.
“However, we need integrated systems to support this,” he added.
Two years ago, the company began its search for an open retail platform that would help manage and scale its owned stores. The ideal solution would also leverage data to support its e-commerce business, and enable Perry Ellis’ planners, merchandisers and retail customers to collaborate on retail trends and markdowns.
In early summer 2006, the company teamed up with Oracle Corp., Redwood City, Calif., and began adding the Oracle Retail Merchandising System.
First, Perry Ellis used the solution to manage markdowns across its retail customers.
Retail customer POS data is filtered directly into Oracle Retail, Paez said, and then imported into the platform’s Oracle Price module that calculates markdown recommendations. A customized interface connects retail customers to mark-down recommendations electronically, allowing the company to reduce retail markdowns while increasing sales.
The platform will help Perry Ellis achieve its newest goal for 2007: launching a successful e-commerce strategy.
The company embarked on this strategy in June 2006, when it launched its Original Penguin Web site, www.originalpenguin.com. Its Perry Ellis site, www.perryellis.com, debuted last month.
“Having near-real-time [item-movement] information is a necessity for our e-commerce strategy. We want to be able to calculate demand,” Paez noted.
With the help of the Oracle platform, Perry Ellis can more easily achieve this level. Similar to its offline operations, Perry Ellis will monitor online consumer purchase behavior and filter item-movement data into the Oracle platform to determine which items to promote.
“The sites provide a measure we’ve never had before…and can teach us how to use online advertising to create lift at retail stores rather than simply mark down product,” he said.
Wal-Mart to Focus on Expanding Seiyu
New York City, Wal-Mart Stores is open to acquisition opportunities in Japan, but the retailer is more focused on expanding business at its 53%-owned Seiyu chain, according to a report by Reuters. Shares of Seiyu jumped Monday after Wal-Mart vice chairman Michael Duke told the Nikkei business daily that the company might look for more acquisition opportunities in Japan.
The paper reported that Duke welcomed planned changes in corporate laws in May that will enable foreign companies to buy Japanese firms through share swaps.
Wal-Mart last year tried to invest in superstore operator Daiei Inc., aiming to boost its presence in the country, but it lost the chance to Aeon Co., Japan’s second-biggest retail group.
Wal-Mart entered the Japanese market in 2002 by taking a small stake in Seiyu. It has since invested more than $1 billion in the chain, but has yet to return the retailer to profitability.
Wal-Mart spokeswoman Amy Wyatt said Wal-Mart’s focus in Japan is on Seiyu.
“It’s a very sizable business today, so we still think that there are a lot of growth opportunities in the existing business,” she said.
In terms of acquisitions, she said: “I wouldn’t go as far as to say we’re shopping for them.”