did anyone see the forbes article about lulu and name escapes me but they mentioned deckers and said checks at department stores showed that it was not a great season due to the warmer weather.... is this bs or will earnings once again disappoint.... thank you
UGG Maker Retools IT to Prepare for Retail Expansion
By: Joel Schectman
Faced with falling demand for its UGG boots Deckers Outdoor Corp. is preparing to more than double its retail operation and shift away from a strategy that had been predominantly focused on wholesale. To prepare for the rapid expansion, Deckers is rolling out a new IT platform that will allow the company to handle more data associated with more retail stores and better manage inventory levels, Yul Vanek, the company’s vice president of information technology, told CIO Journal.
The move to retail is a needed step for Deckers, after sales fell 12% for its UGG boots last quarter and lower than expected growth pushed the stock price down by half in the past year, to $38.98 at the market’s close Monday. Large retailers “aren’t going to shelve UGG coats and scarves instead of more established brands,” said Scott Krasik an analyst with of BB&T Capital Markets. Deckers “has reached the limit of what they can do as a wholesale business.”
Deckers is planning to have 200 stores by 2015, from 78 currently, in a bid to increase recognition of a wider variety of its products than wholesale purchasers have been willing to put on their shelves, Mr. Vanek told CIO Journal. Many retailers are unwilling to sell Decker products, beyond the classic UGG boots, limiting sales of UGG sandals and sneakers geared towards spring, fall and summer. “[Brick and mortar stores] allow us to sell a breadth of our products that few retail partners are willing or able to do,” Mr. Vanek said. The company plans for 25% of sales to come from stores by 2015, up from what Mr. Krasik estimates was 15% in 2012.
In order to scale out its retail presence Deckers is upgrading the software platform it uses to help manage its inventory and restock stores. Until now, Deckers’ methods for maintaining stock levels at stores were a hodgepodge of regional systems built for wholesale operations. Store-level sales information did not automatically filter into reorder systems. And the wholesale system Deckers used to supply other retailers wasn’t able to offer predictive models to guide inventory decisions at stores, so those choices were often made using an “ad-hoc” set of tools, Mr. Vanek said.
“We were bootstrapping. We would upload or hand-key store sale information into an Excel and then enter orders into our wholesale replenishment system,” Mr. Vanek said. “That works for a handful of stores but when you’re talking about hundreds of stores in different regions…it becomes too complicated.”
The new tool Oracle ’s retail management suite, will gather sales, supply and planning data in a single system, collecting data from registers and allowing executives to view sales trends on a regional and store levels, while more accurately forecasting future demand, the company said.