FASTBURN MAKES DEAL WITH MAHONEY COHEN
Byline: Katherine Bowers
LOS ANGELES — Fasturn Inc. has struck a strategic alliance with apparel accounting specialist Mahoney Cohen & Co., aimed at helping their business-to-business fashion clients figure out how to keep their profit margins from vaporizing in cyberspace.
Starting with product development, and continuing through to the collection of accounts receivable, the diagnostic program powering the joint venture is designed to identify apparel manufacturing and textile operations in need of improvement, so that their parent companies can build beefier margins. New York-based Mahoney Cohen’s clients include fashion designers such as Ralph Lauren, Eli Tahari, and Vera Wang, and activewear manufacturer Jacques Moret, among others.
The deal forged between Fasturn and Mahoney Cohen is similar to one that Fasturn struck in November with Accenture, the global technology and management adviser formerly known as Anderson Consulting. Both deals call for cross-functional executive teams to work together on marketing various combinations of technology and consulting services.
“Middle-market companies don’t really have the systems to capture where the losses are,” said Gary Herwitz, executive vice president at Mahoney Cohen. “So, they’re going in at 35 percent [gross margin] and ending up at 29 percent — and they don’t know where the six points went. For a $100 million company,” Herwitz noted, “that’s $6 million [lost.] Most companies have gone through the reengineering process whereby they have addressed their selling, general and administrative costs,” he continued. “However, they are not equipped to identify where they are losing margin points — in the product development process, weighted average costing, sourcing inefficiencies, chargebacks. You would be surprised,” he added, “how few companies drill down on a customer-by-customer, or factory-by-factory basis.”
Once a review has been completed, the joint venture partners will advise apparel manufacturers or textile mills on ways they can recover some of their costs, including expenses stemming from a company’s workforce, technology, and broader business processes. It’s a safe bet, naturally, that Fasturn’s private marketplace, focused on global sourcing, will figure prominently into any recommendations made by the B2B in conjunction with Mahoney Cohen.
In addition to the suite of services provided by its alliance with Mahoney Cohen, Fasturn can supply fashion players with i2 Technology Inc.’s demand forecasting and planning software, and with Retek Inc.’s design collaboration module, as a result of previously inked licensing pacts.
Herwitz said he believes the new partnership with Los Angeles-based Fasturn may bring Mahoney Cohen entry to new apparel companies that may ultimately become interested in the traditional audit and tax services that form the firm’s bread and butter.
Although Fasturn has that, its primary focus is on its private marketplace. A company spokesman said the margin review team may recommend using its public global marketplace, as well. “I would see the [public] global marketplace not so much as a technology solution,” he noted, “but as a service to assist sourcing — say, diversifying country of origin for more cost effectiveness.”
According to a company spokesman, Fasturn is currently implementing three private marketplaces for clients and is in a pilot stage with three others, but, as is often the case in B2B Net circles, the spokesman declined to name them.