Case Study: Guess? Has the Answer to Retail Success with JDA Portfolio

Guess? Inc. began as a blue jeans company in 1981 and has since developed into a global lifestyle brand. Its unforgettable, progressive campaigns featuring Drew Barrymore, Claudia Schiffer, Tyrese Gibson and most recently socialite heiress Paris Hilton, have helped make Guess? a household name around the globe. In addition to showcasing its brand internationally in print, TV, billboards and other mediums, the $729 million company has successfully brought its trend-right fashion experience into the world of retail and the market has been responding. Guess? grew comp store sales 9.9 percent in 2004 and trended some of the highest monthly comps in specialty retail in 2005. The company has also introduced two new successful retail concepts, grown its store count in North America to over 300 and expanded its online footprint to three e-commerce sites.

Business Challenge

To continue its aggressive retail growth using reliable and scalable software applications that provides sophisticated functionality and system integration.

Business Solution

Since 1994, Guess? continues to return to JDA for its software needs, and uses the following solutions to grow their store concepts and counts:

► Merchandise Management System-I™
► Merchandise Planning by Arthur
► Performance Analysis by Arthur
► Assortment Planning by Arthur
► Advanced Allocation by Arthur
► RAPID Packages by Arthur - Product and Location
► Arthur Knowledge Base™

Business Benefits

► Provides the reliable and scalable foundation to support Guess?'s aggressive retail growth.
► Integration keeps cost of ownership down and focuses efforts on what matters most growing the business.
► Provides a powerful, integrated planning platform for the precise execution of weekly sales and inventory plans.
► Consolidating retail inventory into JDA's solutions cut the buyers' workload in half.

JDA Supports Retail Growth

With plans to continue to aggressively grow its retail business, Guess? CIO Michael Relich notes the significance of relying on JDA Portfolio applications. "JDA applications have supported our entire retail growth, which has been quite substantial. As little as five years ago, wholesale represented over 50 percent of our company revenue. Retail now makes up over 70 percent of our North American corporate volume," explained Relich. "The fact that we have been able to open several retail stores, add new concepts and significantly expand our ecommerce business with relative ease and without a huge increase in staffing is attributed to JDA," stated Relich.

JDA Integration Pays Huge Dividends

Guess? has been a JDA customer since licensing Portfolio Merchandise Management System-I (MMS�) in 1994. The company has continually returned to JDA to license numerous applications in the Arthur Planning suite.

"JDA's tools are among the best on the market and provide us with a high level of sophistication and value. We are comfortable that we can continue to grow our store concepts and count without worrying about the scalability of JDA," Relich noted. Relich also says that the fact that JDA's solutions are integrated pays huge dividends. "Rather than trying to build and maintain costly interfaces between retail systems, the integration among JDA's applications allows us to keep our cost of ownership down and focus our efforts on growing the business and being a successful retail operation," stated Relich. Case Study: Guess? Has the Answer to Retail Success with JDA Portfolio

Guess? Cuts Buyers' Workload in Half with JDA

Relich, who joined Guess? about one and a half years ago, immediately focused his energies on operational projects to support the company's aggressive retail growth. One project involved integrating JDA with Guess?'s manufacturing system and separating the retail group's warehouse inventory from the wholesale group's. "By consolidating retail's inventory into JDA's solutions, the buyers' workload was cut in half. They now have complete visibility into their inventory ownership plus
have the analytics to more successfully manage and allocate merchandise rather than sifting through data in various applications," explained Relich.

JDA's Reliability and Scalability Support Guess?'s Growth

JDA's solutions have also provided a reliable and scalable foundation to support Guess?'s retail growth. In 2004, Guess? introduced to the apparel world its more upscale, contemporary Marciano line. Due to strong customer response, particularly from the slightly older and more sophisticated consumer, Guess? launched a Marciano retail chain. Additionally in 2004, Guess? seized the opportunity to sell more of its high margin accessories by opening the Guess? Accessories chain. In addition to bringing these new chains into the Guess? IT fold, Relich also brought Guessfactory.com and Marciano.com online to broaden Guess?'s e-commerce presence, which already included Guess.com.

Citing an example of how Guess? can efficiently grow stores using the JDA platform, Relich pointed to its Canadian operation, which was formerly a licensee that Guess? purchased in 2001. "Following this acquisition, we were able to grow the number of Canadian stores by 75 percent by converting these operations to the full JDA suite," said Relich. Speaking on the benefits of using the Arthur Planning suite of applications, Relich said, "Retail is all about planning. If you get the planning right and make sure you get the right products in the right quantities at the right time, you're going to be successful. As we've gotten more sophisticated in our retail operations and opened more doors, planning has been key to our profitability and success. JDA provides a powerful integrated planning platform for the precise execution of our weekly sales and inventory plans."

Guess? Has Unquestionably Big Plans

Having spent the last year focused on IT initiatives around logistics, warehouse management, inventory management and e-commerce, Guess? has big plans for the new year. "2006 is going to be the year of retail," remarked Relich, who says that the company plans to upgrade to the latest version of MMS, combine Canadian operations onto the JDA platform with its U.S. retail operations and move from chain- to assortment-level planning with JDA. "It's impressive to see how JDA has expanded its portfolio of applications through acquisition and as new technology has emerged. They've gone from a merchandise management company to one that offers everything for retail from POS and planning. We're looking to get greater economies of scale and efficiencies from our JDA investment," added Relich.

Relich admits that he was a bit biased toward a competing vendor's solution when he initially oined Guess? As evidenced by his closing statement, there's no question that Relich's experience with JDA has been nothing short of positive. "JDA is a great suite, the company is stable and their people understand retail. I don't think any retailer could go wrong with the JDA direction."

Customer Information

Customer Name: Guess? Inc.

Industry: Fashion retailer

Headquarters: Los Angeles, CA

Description: Established in 1981, Guess? began as a blue jeans company but has since anaged to become a brand name that reflects a global lifestyle. Today, Guess? designs, markets and distributes worldwide a full range of clothing and accessories for women, men and children.

Number of Stores:
Guess? Operates approximately 157 retail stores in the United States, including full-priced stores, factory stores and Guess? Kids stores, as well as 51 stores in Canada. The retailer also has approximately 236 international stores.