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Building a Seamless Retail System

Superior automated systems help Perry Ellis meet customer demands.

by David A. Kelly, August 2008

Success in the fashion industry requires both innovative design ideas and attention to the smallest details of supply chain management, brand management, and sales expansion—creativity alone won't get your fashions into stores and onto the backs of consumers. In the fast-paced fashion industry, many companies are challenged as they try to balance the business and creative sides of their enterprise.

Yet success is just what Perry Ellis International has achieved—not just for one season but year after year, in category after category. From its start in 1969, Perry Ellis has grown into a portfolio brand company with estimated revenues of US$849 million in 2008. Approximately 80 percent of its business is wholesale, with 20 percent direct e-commerce and retail through company-owned Perry Ellis and Original Penguin retail stores. Even with increasingly turbulent economic times, Perry Ellis has averaged revenue growth of 20 percent over the past five years.

But success at this level hasn't been easy—especially with 10 clothing categories, 27 different brands, 7 distribution channels, and a global supply network of more than 100 companies. Staying on top of changes in clothing styles while providing high-quality apparel to a wide variety of retail outlets takes vision, focused management, efficient operations—and the right information and IT systems that can support the dynamic decisions required in a fast-moving industry.

“Perry Ellis is a good example of a company that's looking to span the various operating models—from retail to wholesale to manufacturing—that had been separate in the past,” says Robert Garf, vice president and general manager of retail strategies at AMR Research. For Perry Ellis, that operating platform is based on Oracle technologies—from underlying Oracle databases that hold corporate information to Oracle Financials and Oracle Human Capital Management for accounting and payroll to multiple Oracle Retail components for managing everything from inventory allocation to point-of-sale and pricing. That strong foundation is providing a base for Perry Ellis' continued growth and profitability.

“We've proven that in difficult times, we can deliver and will continue to do so. Our end goal is to always satisfy our consumer and at the same time make sure we satisfy our customer—the retailer,” says Luis Paez, CIO of Perry Ellis. “We're very effective, very productive, and we're always looking for ways to make the company more efficient.”

 

Growth Limited by Existing Systems

Based in Miami, Florida, Perry Ellis is a leading apparel designer and distributor, with brands such as Perry Ellis, Jantzen, Original Penguin, Savane, and more. Its distribution channels include regional, national, and international department stores, mass merchants, and specialty stores, as well as its own retail outlets. Its key customers include Macy's, Wal-Mart, J.C. Penney, Kohl's, and Sears. In addition, Perry Ellis creates and sells goods under private-label programs for various retailers as well as licensing some of its brands to third parties for the manufacture and marketing of items such as footwear, outerwear, fragrances, and more.

 

From a business perspective, this means that Perry Ellis isn't just managing one brand; it's managing many brands, distributed across numerous channels. In effect, it has a “family of brands” strategy in which it builds and maintains brands with distinctive styling and pricing for each product category. Perry Ellis contracts with more than 100 suppliers spread out across the globe to manufacture its products.

Perry Ellis has a strategic focus on expanding its international sales and its direct-to-consumer Perry Ellis and Original Penguin stores—during the past few years, approximately 40 of these stores have been opened in outlet malls throughout the United States. “Opening up retail stores and going direct to the consumer certainly elevates the brand because Perry Ellis can really control the consumer interaction,” says AMR's Garf.

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