Britain’s Arcadia Group Ltd., owner of chains such as Topshop, Miss Selfridge and Dorothy Perkins, will spend 50 million pounds, or more than $83 million at current exchange, on new technology through 2017 to support its accelerating international and omnichannel expansion.
This story first appeared in the March 21, 2014 issue of WWD. Subscribe Today.
The tech program, expected to be disclosed today, is in large part to develop global inventory and warehouse systems, boost speed-to-market capabilities, merchandise and meet consumer demand better and localize assortments with enhanced product information, WWD has learned.
Arcadia has 2,507 owned stores and 600 franchised outlets in 38 countries and conducts online business in about 110 countries. This year, 161 store openings are seen.
“Our brands are committed to delivering an interactive, exciting and efficient shopping experience to all our customers around the world, no matter which channel they choose to use to visit us, from flagship stores to mobile devices,” said Sir Philip Green, owner of Arcadia Group. “Global expansion is a key strategic focus for Arcadia, and to do this successfully, we need to make sure the best merchandise assortment is available in each store and channel.”
“It needs to be a business-led program. It can’t be an IT-led program,” stressed Siobhan Forey, Arcadia’s chief operating officer for human resources and operations. She said Arcadia is partnering with Oracle, Manhattan Associates and Amber Road to build the technology infrastructure needed to manage the complexities of growing international and online expansions, widening product range and heightening consumer expectations spurred by digital growth.
In the U.S., Topshop-Topman has four flagships and is opening five more over six to 12 months beginning in the fall, including a 40,000-square-foot flagship on New York’s Fifth Avenue, the brands’ second-largest store behind the 90,000-square-foot Oxford Street site in London. The other flagships are opening in San Diego, Washington, Houston and Atlanta. Meanwhile, Topshop-Topman shops are proliferating inside Nordstrom, with another 10 to 15 expected to be added to the current 60 over the coming months. Eleven Topshop-Topman concessions recently opened in several European department stores in Europe, in Galeries Lafayette, De Bijenkorf, Karstadt and KaDeWe. Arcadia also introduced Topshop to Lane Crawford in Hong Kong.
The BHS, Burton, Evans, Wallis and Outfit brands are part of the Arcadia portfolio as well.
Executives are talking with franchise partners about entering new territories, including parts of Southeast Asia, South America and South Africa, as well as further expansion in Europe. Arcadia franchises around the world, except in the U.K. and America, where stores are owned.
Arcadia is also developing distribution centers, which officials refer to as “hubs,” such as Singapore, and possibly on the West Coast of the U.S., to support the e-commerce business and to ship locally. Currently, Arcadia utilizes a small warehouse in New Jersey for its U.S. distribution. “We are looking at other routes to fulfillment as well,” Forey said, citing the possibility of third-party arrangements.
On the omnichannel front, Arcadia in the U.K. provides a “click and collect” service enabling shoppers to buy online and pick up their orders in the stores. In the near future, Arcadia wants to add fulfillment capabilities at stores, and mobile payment in the stores. “It’s all on the road map to deliver over the next 18 months to two years,” said Forey.
Oracle will provide merchandise financial planning, assortment planning, size profiling and optimization systems. It’s a full suite of retail business applications so that supply chains are managed better, inventory control gets tighter, core merchandising is improved and so Arcadia can track sales and fashion trends better and learn more about what sizes are needed in the stores, on an individual basis, rather than by country.
According to Green, Oracle will enable Arcadia to “romance the customer” and intensify efforts to put up flagships and grow the online business.
With factories around the world and a complex, fast-moving supply chain — 250 fresh styles arrive to Topshop stores each week — software helps to understand where items are and how to expedite them to the stores. Oracle will also support Arcadia’s “click and collect” service and eventually, order in-store for an item not stocked on the shelf, and have it delivered.
Manhattan Associates’ supply chain commerce solutions will replace Arcadia’s legacy technologies and integrate with the retailer’s other enterprise systems. “The Manhattan solutions will help us streamline operational processes within our distribution centers and provide us with improved visibility of both inventory and data across our supply chain operations,” said Alda Andreotti, Arcadia’s supply chain director. “They will help support new routes to market as we build our e-commerce and multichannel capabilities, and expand internationally. A more flexible fulfilment approach and the improved service levels will help us strengthen loyalty and customer relationships, which in turn will help drive revenue and profitability.”
Amber Road will provide an integrated global trade management suite of technology. Arcadia plans to automate key import and export activities, for greater supply chain visibility. The technology is geared to optimize global sourcing decisions, provide easy access to country-specific import and export regulations, improve visibility over orders and track international shipments. The solution will be implemented worldwide.
Forey said the three “strands” of the new technology program are of “vital importance,” adding, “We will have improved productivity, improved stock accuracy, better planning, reporting and controls. We will have one system which has total global stock visibility, and we will have a reduction in terms of end-to-end costs, and reduction in lead times.”