Pier 1 Imports, with 800 stores worldwide, achieved record sales by addressing growth business areas and phasing out its apparel product line.
$1.4 billion Pier 1 Imports offers over 5 000 items of culturally inspired merchandise from over 50 countries. This merchandise is grouped in five categories: home furnishing, decorative accessories, housewares, bed & bath products and seasonal items.
Prior to 1998, Pier 1 also had a sixth category, apparel, which generated approximately $70 million in sales. With the help of the JDA Arthur Enterprise Suite of strategic merchandise management software, Pier 1 determined that apparel was not a growth business for them.
By seeing increased demand for furniture and decorative accessories, Pier 1 wanted to pro-actively address this trend by investing more of its floor space, as well as inventory and advertising dollars, on these products. As a result, the company began to de-emphasise apparel in 1995 and discontinued this product category by the end of 1997.
"We would not have been able to accomplish our 12 month goal without the Arthur Enterprise Suite of planning and decision-based tools," says David Walker, Pier 1`s vice president of planning and allocation.
The Arthur Enterprise Suite is part of JDA Software Group`s comprehensive retail product offering. JDA is an international provider of enterprise retail solutions and is represented by Dimension Data i-Commerce Software locally.
Before making changes to its business, Pier 1 first worked out multiple `What If` scenarios using Arthur Planning`s co-ordinated enterprise abilities. Next, the retailer made refinements by accessing the level of detail needed to execute a strategic plan for their market.
"We were able to replace the lost revenue from soft lines with increased sales from other product groups, plus Arthur helped us deal with mark-downs of our apparel line. We were able to manage this major transition without taking focus away from our fast-turning merchandise assortments, which change 70 percent each year," says Walker.
In 1997, with only seven percent of sales from apparel, Pier 1 still achieved double-digit sales gains with no decrease in operating margin and just a slight increase in average inventory.
By analysing their overall business, buying smarter and re-emphasising on high-demand product categories, they also achieved higher average ticket sales as well as increased sales per average square foot of retail space. Pier 1 continued this path of record growth, with no revenue from apparel, in 1998.
"With the help of JDA`s Arthur planning tools, we not only met our plan, but surpassed it," concludes Walker.
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Dimension Data Holdings
Dimension Data Holdings is South Africa`s largest Information Technology integration company with turnover of R4,7-billion (1997/98). Based in Johannesburg and listed on the Johannesburg Stock Exchange, the Group is fast becoming a global organisation with offices in Asia, Australia and the United Kingdom. Its subsidiary, Datacraft Asia, is listed on the main board of the Stock Exchange of Singapore.
JDA Software Group
The JDA Software Group is a global provider of integrated retail software products and professional services for more than 600 clients worldwide. Designed to optimise the Retail Enterprise, JDA`s solution addresses the requirements for the entire retail supply chain: from corporate with merchandising, planning, allocation, decision support and financial systems; to the distribution centre with warehouse management and logistics systems; at the store with point-of-sale and back-office applications; and on the Internet with Web-based solutions.
Founded in 1985, JDA employs more than 1 100 associates operating from 21 offices worldwide. With headquarters in Scottsdale, Arizona, the company has offices in major cities throughout the United States as well as internationally in Canada, the United Kingdom, France, Mexico, Brazil, Chile, Japan, Singapore, and Australia.
For more information go to JDA`s Web site: http://www.jda.com.