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Oracle in Deal for ProfitLogic

Oracle Corp. said Tuesday it will acquire ProfitLogic Inc., a leading provider of retail profit optimization software based in Boston.

NEW YORK — Oracle Corp. said Tuesday it will acquire ProfitLogic Inc., a leading provider of retail profit optimization software based in Boston. The price of the transaction, which is expected to close in mid-July, was not disclosed.

With ProfitLogic’s newly expanded suite of demand-based solutions, Oracle’s infrastructure software and its Retek Global Business Unit’s planning and execution solutions, retailers will have an integrated view of customer demand from supply chain to merchandising to the store.

Merchandise allocation and assortment execution are becoming increasingly important tools in the battle for consumers’ hearts and dollars in the face of heightened competition. “Over the last 12 to 18 months, merchandise allocation has moved from a unique competitive advantage to a general necessity,” said Duncan Angove, general manager, Retek Global Business Unit.

The right colors and sizes in the right stores at the right time can keep consumers coming back and impact the gross margin. The software also provides visibility, allowing retailers to assess a brand’s performance and markdown liability, and keeps a record of both.

Oracle is clearly enamored of ProfitLogic’s star-studded client list, which includes Ann Taylor, Bloomingdale’s, Children’s Place Retail, Gap Inc., J.C. Penney, Marshall Field’s, Nordstrom, Reitmans and Sears.

Patti Freeman Evans, a retail analyst at Jupiter Research, said ProfitLogic enhances Oracle’s existing offerings for retailers. Asked whether the smaller firm could get lost at giant Oracle, she said, “It behooves Oracle to highlight the benefits of ProfitLogic.”

Scott Friend, co-founder and president of ProfitLogic, said American Eagle is using the product to tailor pricing and assortments to local markets.

“J.C. Penney can tailor its assortment mix across 1,100 stores,” he said.

Jan Walsh, vice president and business information officer of Nordstrom, said the company is using Oracle, Retek and ProfitLogic products because “we’re looking to improve and innovate in the areas of customer-centricity and overall operating efficiency.”

This story first appeared in the July 6, 2005 issue of WWD.  Subscribe Today.