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Industry News - May 23, 2008



Ellen Tracy Upgrades it Wholesale and Retail Operations

Ellen Tracy, an apparel and footwear retailer, implements Jesta I.S.’ Vision Suite for both its’ retail and wholesale businesses. To manage its retail operations, Ellen Tracy  implements Vision Merchandising and Vision Planning, which provides Ellen Tracy with an integrated platform that translates into better insight and analysis of its inventory flow (with in-season planning and allocation at multiple levels) combined with robust ordering, transfer replenishment and integrated allocation modules. Ellen Tracy’s planning and merchandising staff will have improved visibility resulting in better assortments that meet customer demand as a result of our intuitive user interface.

Ellen Tracy will also utilize Jesta I.S.’ ERP offering, Vision Sourcing and Vision Demand Management, for its wholesale operations. Vision Sourcing and Vision Demand Management will provide Ellen Tracy with the tools to manage the complex supply chain that is generally associated with the soft goods vertical.

The Vision Sourcing and Vision Demand Management products were selected by Ellen Tracy to improve its operational efficiency and productivity. Coupled with Vision Financials, Ellen Tracy will be able to establish and maintain superior internal controls and streamline cash flows, and improve the decision making process by ensuring that data is unified and available rapidly across the entire organization.

“With the Vision Suite, Ellen Tracy will be able to easily share critical product data and obtain better insight into its operations from a functional and strategic perspective," said James Mazzanti, CIO for Ellen Tracy. "We are looking forward to building a solid relationship with the Jesta team and leveraging the vast amount of experience they have from working with their impressive client-base.”


New York & Company Reports 37.5% Increase in Q1

New York & Company, a specialty apparel chain with 586 retail stores, announced net sales of $270.1 million, as compared to $274.2 million for the first quarter of fiscal year 2007. Comparable store sales for the first quarter of fiscal year 2008 decreased 6.6%, compared to a 0.7% decrease in the prior year first quarter. Net income from continuing operations for the first quarter of fiscal year 2008 was $6.7 million, or $0.11 per diluted share, as compared to prior year net income from continuing operations of $5.2 million, or $0.08 per diluted share, representing a 37.5% increase in earnings per diluted share.

We are pleased to report better than expected first quarter results," said Richard P. Crystal, New York & Companys Chairman and CEO. "During the period, we maintained our inventory and expense management discipline while providing our customers with compelling fashions across our apparel and accessory categories. At the same time, we eliminated non-brand building promotions. These strategies, in a difficult consumer environment, proved highly successful for our Company and brand, as evidenced by our increase in gross profit margin and a 37.5% rise in earnings per share for the period. We expect the environment for consumer spending to remain difficult this year and as such will maintain our previously stated strategies. We expect fiscal 2008 to represent significant accomplishments toward achieving our goals of building brand loyalty, increasing earnings and enhancing value for our shareholders.

Significant highlights with respect to the first quarter include the following:

  • Favorable response to spring assortments, particularly wear-to-work and accessories categories, along with the elimination of non-brand building promotions led to a significant improvement in merchandise margin and a net increase of 210 basis points in gross profit margin versus the same period a year ago;
  • Reduced inventory by 10.5% on an average store basis driven by disciplined inventory management;
  • Improvement in operating cash flows of $27.0 million as compared to the same period a year ago;
  • Controlled costs with selling, general and administrative expenses declining by 4.3% on an average store basis; and
  • Further strengthened the balance sheet with $61 million in cash versus $37 million at the end of last years first quarter while reducing debt by $6 million versus last years first quarter end.

During fiscal year 2008, the Company plans to open 25 to 30 stores, close approximately 12 stores and remodel approximately 12 stores, ending the fiscal year with 591 to 596 stores and approximately 3.3 million selling square feet in operation, with new stores representing approximately 110,000 selling square feet. Capital expenditures are estimated in the range of $48.0 million to $52.0 million in fiscal year 2008 versus $75.5 million in fiscal year 2007. Depreciation expense for the year is estimated at $44.0 million.


Tween Brands Reports Record First Quarter Sales

Tween Brands reported record net sales of $251.7 million for the first quarter of 2008, a 13% increase on the $223.2 million in sales for the 2007 quarter. The sales increase is largely attributable to Justices robust store growth and strong comparable store sales performance.

Tween Brands comparable store sales for the 2008 period decreased 1% versus the 3% increase for the 2007 quarter. By brand, Justice had a 22% increase in comparable store sales, while Limited Too had a 7% decrease. The companys e-commerce sales increased 75%.

In early April, the company disclosed that Limited Toos sales were weak for the second half of February and much of March due to a lack of spring color within its sportswear assortment, along with the absence of a meaningful casual bottoms business. The company also said that given a more difficult retail environment, customers appeared to be trading down in their apparel shopping, choosing lower price or sale items and buying fewer of them.

“Limited Toos April sales were much closer to our original spring plan, coinciding with the more colorful summer floorsets, improved mall traffic and greater response to our direct marketing, said Tween Brands Chairman and CEO Mike Rayden. "That said, Limited Toos average transaction value during the first quarter was 15% below that from a year ago, in large part because of a lower average unit retail sale.

Mr. Rayden noted that Tween Brands Justice stores continue to outperform the companys expectations. Against a very difficult two-year comparison in comparable store sales, Justice delivered another terrific quarter, said Mr. Rayden.


Oxford Industries Selects SAP to Streamline Global Financial Reporting

Oxford Industries replaces its financial information systems with the SAP ERP Financials solution. Oxford will streamline data integration, simplify the reporting process, and gain the ability to easily view a single source of master data across the organization by using SAP ERP.

Oxford Industries is an international apparel design, sourcing and marketing company with a diverse portfolio of brands and retail operations. Its primary business strategy is to develop and market compelling lifestyle brands, including Tommy Bahama and Ben Sherman, and to acquire additional lifestyle brands that fit its business model as suitable opportunities arise. SAP's flagship enterprise resource planning (ERP) application, SAP ERP, provides a comprehensive financial management solution. With its seamless integration, the application will support Oxford's strategy today and into the future.

"With SAP, we anticipate building an environment of robust and timely business insight," said Tom Chubb, executive vice president, Oxford Industries. "To support our strategic objectives, Oxford will work with SAP to streamline global financial reporting with a planned rollout across our operations in the United States, the United Kingdom and Hong Kong."


Casual Male Implements Business Intelligence Tools to Help Expand Overseas

Casual Male Retail Group adds business intelligence (BI) and data integration solutions to support its global expansion plans. The apparel retailer implements its on-demand BI solution from Oco in Casual Male's direct business throughout Europe. Casual Male has been using Oco's BI solution in the U.S. for several years.

Casual Male will launch into six European countries, including the U.K., Spain, Germany, France, Italy and the Netherlands by August 2008. Casual Male uses the BI platform to gain insight into business trends and performance across multiple currencies in its European business.

Oco's solution will work in conjunction with GSI Commerce, Casual Male's e-commerce partner in Europe. Oco's solution will take data from multiple systems, organize into a single data warehouse, and provide Web-based reporting and analytics for executives, merchandisers, marketing and finance professionals. The solution addresses some of the key challenges retailers face today to effectively manage across channels and geographies. It enables better decisions in inventory buying, promotions, and product merchandising.

"Oco's solution has provided us with the visibility and insight to significantly grow our cross-channel business in the U.S.," said Dennis Hernreich, executive vice president, COO and CFO, Casual Male Retail Group.

The Oco-generated reports will enable Casual Male to assess European operations on a regional basis, and to help drive the direction of additional growth opportunities in Europe. It also will enable the company to evaluate merchandising requirements based on cultural and seasonal factors, and better manage inventory.


Winn-Dixie Plans to Expand its Neighborhood Merchandising and Marketing Programs

Winn-Dixie Stores announced it is exploring ways to expand its successful neighborhood merchandising and marketing programs.  The initiative aims to promote improved information sharing amongst consumer product manufacturers with the help of key technology partners.

Winn-Dixie intends to work with consumer product manufacturers in better aligning merchandising, marketing and store operations, with a focus on driving more traffic to stores, increasing the average basket size per customer store visit, and enhancing customer satisfaction.

This partnership reinforces Winn-Dixie's commitment to become a leading neighborhood grocer in every market it serves.  The use of industry-standard information will allow for reduced shelf-level out of stocks and the ability to tailor product offerings to fit each individual community in the grocer's five-state operating area. 

In support of this effort, Winn-Dixie will work with IBM, Priva Technologies and TrueDemand Software who will provide access to methodologies, best practices and applications used to improve information sharing and collaboration with leading Consumer Product Manufacturers. 


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