Running the largest apparel technology company in the world gives Lectra chief executive officer Daniel Harari a perspective on globalization and automation that few can match. This year was one of the most important in the $317 million company's existence. Lectra replaced all its major hardware and software with a new generation of tools, including smart cutters that know their own history and can be programmed remotely, 3-D software for fitting, product life cycle management software that integrates Lectra's other offerings, and design software that makes the company's U4ia (a de facto industry standard) obsolete. During a visit to Lectra's New York office, Harari spoke with WWD about apparel technology, globalization and fast fashion.
WWD: How has this year been for Lectra? Daniel Harari: Orders for new cutters are up 38 percent in six months. Our expectations were that they would be down 20 percent. Total orders were up 15 percent in the first six months of the year. Orders for new systems are up 16 percent. But we could not deliver everything. We had a significant backlog at end of September.
WWD: What percent of your business is in China and India?
D.H.: Roughly 60 percent is in Europe, 20 percent in the Americas and 20 percent in Asia...by revenue. In China we have more customers who want to establish their own brands and have their own design team and put more importance on pattern making, so we are selling more high-end design software there. India is five years behind. In India, people are very price sensitive. We have 80 percent to 100 percent of the luxury goods market, all the brand names from Chanel to Prada to Gucci. In France and Italy, our market share is close to 100 percent of this segment. The more sophisticated the product, the more we are in this market. The higher the quality [of the product], the better the savings [with our technology].
WWD: But the U.S. has no factories.
D.H.: This is what is said in the press. It is not true. After the WTO, the change was 4 percent in the States and 8 percent in Europe. What happened was that developing countries lost market share to China because China is more efficient. India is gaining market share. Other countries are losing it. Western Europe and the States did not change so much. Lobbyists make a lot of noise in the press but the reality is there are still lots of clothes manufacturers in the U.S. and Europe. What has gone was gone many years ago. For us, technology is cutting and design but not sewing. For us, the cutting factory does not change. Maybe sewing is moving to the Caribbean.