Retek Reels in Retailers

Snags deals with clothier Ross, Canadian furnishings chain; targets mid-market

Minneapolis  May 24, 2002  Retail applications provider Retek recently rolled out a pair of new customer wins, including clothing merchandiser Ross Stores and a Canadian home furnishings chain, as the company works to reclaim its top spot in mid-market retail systems.

Ross, whose 470 stores in 22 states pulled in $3 billion in revenue last year, will use Retek's merchandising operations management and supply chain management solutions, with an initial focus on improving pricing, markdown management and core merchandising performance.

As an off-price retailer, Ross faces considerable competition from traditional department stores, as well as competitive off-price retailers. To improve merchandising operations, Ross needed the ability to manage its business to greater levels of detail and to take advantage of local market opportunities through improved merchandising assortments.

Richard White, senior vice president and chief information officer with Ross, cited scalability as a key selling point for the Retek solutions. "We plan to increase the size of our business by more than 50 percent by 2005," White explained. "To support our business as we continue to grow, and take our management of information and inventory to the next level, we need scalable IT solutions. We believe Retek has the most scalable retail solution available."

Ross Stores will deploy the solutions using the Retek Integration Bus to facilitate information exchange. As part of its merchandising initiative, Ross will also deploy Retek's pricing solution.

Meanwhile, north of the border, Montreal-based Stokes, a home furnishings retailer with more than 140 stores across Canada, has implemented Retek's merchandising and supply chain management solutions to replace legacy software systems that inhibited Stokes' sales growth and profitability.

Stokes, a multi-divisional organization in business for more than half a century, is primarily a house wares and tabletop chain, with stores ranging from 1,500 to 5,000 square feet. Stokes uses both domestic and foreign suppliers and is extremely replenishment driven.

Stokes legacy systems were significantly limiting its ability to effectively manage inventory, so the company is using the Retek solutions, implemented in less than six months, to improve inventory turns and customer satisfaction.

"The solutions have provided us faster access to critical information, visibility into our supply chain and substantially improved replenishment," said Jordan Shiveck, president of Stokes, adding, "We evaluated several options, but Retek had the best functionality."

Commenting on the Stokes implementation, Joe Polonski, Retek's vice president of merchandising solutions, said, "By using a simplified implementation approach, mid-sized retailers can gain access to the best-in-class solutions provided by Retek."

Polonski's reference to the mid-market likely is no coincidence. Greg Girard, vice president of retail application strategies at technology consultancy AMR Research, said in a recent note that Retek is targeting this segment of the market again in a bid to expand its customer base. "Retek is launching a second-front effort to regain its original position in mid-market merchandising systems," Girard wrote.

Why this renewed focus on the mid-tier? Girard explains, "The equity market already doesn't like Retek's low quarterly deal count, a situation that the supplier hopes to rectify with its downmarket strategy."

Girard also notes that retail applications providers have faced a difficult market as the largest players in the game have been reluctant to invest in solutions that they feel cannot scale to encompass their thousands of stores and millions of stock keeping units (SKUs). Providers like Retek, and others such as i2, Retek and JDA, will be able to satisfy these big retailers' needs eventually, but in the meantime Girard urges these major players to consider buying solutions and funding, or co-funding with partners, development projects to build out the functionality that they require.