GAP IN DEAL WITH ORACLE FOR E-BUSINESS SOFTWARE
Byline: Valerie Seckler
NEW YORK — A pair of giants in fashion and cyberspace, Gap Inc. and Oracle Corp., are poised to announce today that they’ve struck a multimillion dollar strategic alliance calling for Gap to adapt Oracle’s e-business software, in a move to simplify operations at the 3,850-unit chain and cut costs via the Internet.
Gap, whose earnings plunged 50 percent, to $115 million, or 13 cents a share in its first quarter ended May 5, and which has been struggling to strengthen its infrastructure, will implement various Oracle software modules across its Gap, Banana Republic and Old Navy divisions. They include programs for services ranging from expense management to developing and purchasing fashion products. Among them, Gap has licensed Oracle’s Financials and Purchasing, iProcurement and Product Development Exchange software.
The deal marks Gap’s decision to migrate its e-business platform to the Oracle software from IBM’s Informix software.
“We believe Oracle’s integrated suite provides tools that will help us simplify our operations without the cost and resources associated with customization,” said Ken Harris, chief information officer of Gap Inc., in a statement furnished to WWD Friday. “We are pleased to work with a strategic e-business partner with proven retail experience and feel Oracle’s single suite of integrated products offers us a significant advantage that will ultimately improve how we serve our customers.”
The pact marks the second time Gap has sparked a deal with an Oracle of American business this year: Back in February, Warren Buffet, known as the Oracle of Omaha for his investment savvy, purchased 8 million shares of Gap, or 0.9 percent of the San Francisco-based company, for $204 million.