Interview with Mr Frédéric Champalbert

Today, Lawson focuses on a handful of industry verticals as we realize we cannot deliver a superior customer experience to say twenty or thirty verticals. We signed our first Lawson fashion customer in 1992 and since then we have been increasing our focus and investment in Fashion. I worked with various large and small fashion companies over the years and am delighted to be General Manager for the Fashion Business Unit.

Today, Lawson continues to invest heavily in industry-specific functionality, industry knowledge and in delivering a superior customer experience. I and my team are continually meeting with fashion companies to learn about their businesses and requirements today and in the future.

As we all know the global financial markets went into crisis in September 2008 and virtually every country and industry is facing some level of economic downturn. Many companies in the apparel and textiles industry have set their sights on simply surviving.

In this climate, it seems counterintuitive to think of investing in technology. Yet history has shown that the smart investor buys when the market is down. Profits in the textiles industry exploded in the early 1990s, during a recession, largely due to the increased efficiencies that textile manufacturers realized from capital investment in machinery. In the same period, Liz Claiborne broke the mold for fashion designers and seized leadership in the retail arena by diversifying and investing while others were worrying about the recession.

In the current climate it is more important than ever for manufacturing companies to deliver on time and to ensure customer satisfaction to secure repeat business. There is even more pressure on margins than normal, so managing costs, monitoring margins and utilizing your resources effectively are critical. Fashion companies tend to have complex and global supply chains, so they need good visibility and control of their supply operations. Being efficient and managing your inventories effectively is not enough in the current climate, you also need the agility to quickly respond to the changes in customer demands.

A slowdown is actually a good time to invest in technology-driven process improvements if you want to get ahead when the market picks up. Well-chosen process improvements can quickly make a difference in bottom-line performance, both in the short term and as your business starts to grow again.

The fashion industry is a very dynamic and brand-driven industry where business models evolve rapidly. New companies can enter the market and grow within a decade to become large brands with revenues of hundreds of millions of dollars.

Over the past two decades many companies that used to manufacture have evolved into design, source and distribute companies. Today, many of these brands are now moving from a wholesale model to a multi-channel sales model where they might own retail stores, operate an e-commerce website, run stores within department stores and many other channels to market. At the same time, traditional retailers have developed their own private brands which they design and source then sell through their own stores.

Some software vendors have focused on supporting one business model. At Lawson, we believe we are in a strong position as we have a flexible and scalable solution that can support a company as it evolves from being a manufacturer through a design, source and distribute company to a multi-channel sales organization.

People need clothes and aspire to own luxury goods. So wherever you go in the world there are textile and garment businesses. Today, most of the manufacturing has moved to regions such as Asia, Eastern Europe and Central America. However, in countries like China, we see an increasing number of manufacturers developing their own brands and verticalizing into retail.

We have Lawson Fashion clients across the Americas, Europe, Asia, Australia and New Zealand. The type of business we support in each region can vary, but all are important to us and since it is such a global business we often find our customers in the US and Europe sourcing from our customers in Asia.

One of our main differentiators is our Lawson QuickStep for Fashion solution. Mid-sized fashion companies, whether brand owners that design, source and distribute, or manufacturers, face the same challenges as large, multinational companies: They handle high order volumes, manage a wide variety of product lines and use complex supply chains. But mid-sized companies do not have the same resources as the larger companies to implement sophisticated IT solutions.

Lawson QuickStep is a solution specially designed and preconfigured to provide features and functions mid-sized fashion companies need, and can address the different requirements of brand owners that design, source, and distribute, and manufacturers including multi-language and country-specific functionality.

QuickStep offers the functionality you need to get up and running quickly, without it being a ‘lite’ version of the Lawson M3 solution. It can reduce and streamline the steps required for implementation, saving a company time and money. By reducing the internal effort and complexity of deploying the Lawson M3 Enterprise Management solution, QuickStep reduces risk and shortens the time to benefit.

As a significant proportion of European manufacturing has moved to Asia and Eastern Europe, we have seen many of the companies that remain focus on technical textiles and clothing technology in search of differentiation and a higher price point in order to compete. Many companies took a strategic decision to outsource the sewing or full garment manufacture. Part of this may be due to limited support from European governments for investment in new technology to automate labor-intensive processes.

I think many European companies have invested in supply chain integration for the sourcing and distribution of garments, and mass customization of garments still often takes place in Europe close to the point of demand.

If you look at many of the low cost destinations for apparel manufacturing ten or twenty years ago versus today, labor costs have gone up for them and other new low cost destinations have emerged. To remain competitive many companies in the more traditional outsourcing countries are investing in software technology and process improvements to broaden their offering to provide customers with a full supply chain solution for garments.

Consumer demand is what drives the entire textile and apparel supply chain and the retailers are the channel masters who are continually trying to predict and react to consumers’ wishes. So at the end of the day it is the consumers that sets the expectations and determines the future of the entire industry.

At the lower price end of the fashion market, Fast Fashion is all the rage. Consumers do not want to turn up at a party or work to find everyone is wearing the same design, so collaborative Product Lifecycle Management and Supply Chain Management tools are going to become increasingly important for fashion manufacturers to cut time to market and deliver the breadth of variety that today’s consumers are demanding.

As many traditional bricks and mortar retailers have seen declining revenues, online e-commerce revenues have been growing rapidly in many countries. So many of the changes that consumers see in the coming days are likely to be around their desires and wishes in an online environment. I think that in the future we will see more use of 3D visualization and avatars online, so that people can try clothes on a model of themselves. To successfully manage an online business, requires a solid ERP foundation to track the inventory, display product availability and handle the sales transactions. You might remove the physical store real estate, but all the back office processes and data still need to be managed.

We see a vast number of opportunities and exciting developments going forward and will be working in partnership with our fashion customers to prioritize our investments wisely. Our vision is to support the core fashion business processes from concept to consumer and we will use a mix of in-house development, partnering and acquisitions as we work towards our vision.

My pleasure.