Taking Out the Tangles
When Ratner Cos. wanted to centralize its point-of-sale (POS) system, it quickly realized it lacked the required—and costly—network redundancy needed to support the new system. By outsourcing its POS application, Ratner strengthened its front end as well as added new solutions.
Vienna, Va.-based Ratner operates company-owned and franchised Hair Cuttery, BUBBLES, Salon Cielo and Spa, ColorWorks, and Salon Plaza hair salons. The privately held company, which reported $222 million in sales last year, did have technical challenges, however. First, it was operating “a decentralized, 20-year-old DOS-based POS system,” Tim Lemieux, Ratner’s senior VP, CIO, told Chain Store Age.
“Our infrastructure wasn’t reliable enough to support us if there was a disaster,” he explained. “We also have a small IT staff and cannot afford to keep DBAs [database administrators] monitoring systems 24 hours a day.”
This support is available through outsourcing arrangements, however. Besides supporting specific applications, hosting companies have a dedicated trained staff that works closely with product development,” Lemieux said. “They also have made hardened investments in their data center and security processes—investments that could be very prohibitive to small and mid-sized companies.”
These factors pushed Ratner to out-source its POS system to Tomax Corp., Salt Lake City.
Ratner successfully outfitted 40 stores with IBM thin-client PCs, in 2004. The units were programmed to run Tomax’s Java-based application, Retail.net , a suite of retail applications centrally hosted and managed by Tomax.
Next, the team added a new DSL frame-relay network to support the secure connection between Tomax’s data center in Salt Lake City and Ratner’s data center Washington, D.C.
During each transaction, the POS accesses Tomax’s central servers in real time. Data is pushed to Ratner’s data center and then streamed to each thin-client.
“Smaller, less-complicated PCs reduce our store-level costs and synchronize data, supporting our movement toward a centralized POS,” he explained. By July 2007, the company had expanded the solution to more than 900 stores.
Since it also outsources human-resources and payroll applications from Lawson Software, St. Paul, Minn., Ratner is setting up “a triangular telecom network,” Lemieux said.
“Essentially, if one line fails, we have a backup that can reroute traffic through the hosting facility to the location where the line failed,” he said. “This added level of redundancy is like insurance for us.”
Lemieux is convinced that the chain has saved money, since it did not have to directly invest in the physical infrastructure and facility costs.
“Having experts in our hosting data center frees up my staff is to focus on maintaining the company’s complex systems and utilize existing solutions to provide business benefits.”
Ratner upgraded its Retail.net solution in February, and began testing hosted debit-card authorization.
“Fifty-five percent of our transactions are credit. If we can convert 25% to 30% of these to debit, we will save $250,000 a year,” he said.
Ratner planned to make the application available chainwide this month.
Ratner hopes to outsource its labor-scheduling and merchandising functions, including forecasting, planning and replenishment over the next two years, Lemieux reported.
Wal-Mart to sell earth-friendly CDs
SANTA MONICA, Calif. As part of Wal-Mart’s “Earth Month” the company is selling more than 20 Universal Music Group titles that come with special earth-friendly inserts. The inserts are made with special seed paper and, according to the companies, can actually bloom into wildflowers.
The inserts, in addition to being good for the environment, also offer consumers three free digital downloads from Universal Music. Universal also said that a number of its new CDs will be packaged in third-party certified, renewable recycled board and recyclable paper.
ODP urges rejection of Levan nominees
DELRAY BEACH, Fla. Office Depot is continuing to urge its shareholders to reject dissident nominees and elect the company’s nominees to its board of directors at its annual shareholders meeting this April.
In a proxy statement sent to investors, Office Depot said that Alan Levan’s proposed nominees would do little to help improve shareholder value. According to the statement, Levan’s company, Levitt Corp. has seen its share price fall about 93% over the past three years and that its subsidiary, Levitt and Sons, is in bankruptcy. Office Depot also noted that BankAtlantic, of which Levan is chairman and ceo and one of his nominees, is president of real estate, construction and development, share price has dropped approximately 75% over the past three years.
Office Depot also cited news reports that commented on Levan’s failing business ventures, as well as others that said that his nominees are not qualified to serve on Office Depot’s board of directors.
The company pointed out nominee Mark Begelman’s experience with Mars Music, a company he founded in 1997 that went bankrupt in 2002. According to Office Depot, many news reports attributed this failure to a flawed business strategy.
According to Office Depot, when Levan’s other nominee, Martin Hanaka served as chairman of Sports Authority from 1998 to 2003, the company saw its price fall by about 13%.
Office Depot stressed that its directors best understand the company and are well-suited to help the company grow.
“We strongly believe that removing two of the most experienced retailing executives from our board, including our current ceo who is driving the implementation of our strategic turnaround plan, would be highly disruptive, could delay the implementation of internal and external initiatives and could damage prospects for a successful turnaround,” Office Depot said in the proxy statement.