Benetton gets Lean(er)

According to an article in the Wall Street Journal, Benetton has adopted fast fashion strategies (sub req’d). After sales slumped, Bennetton reorganized with a near 10% sales gain last year to show for its efforts -rebounding from a $10.6 million loss in 2002. The picture of their strategy is incomplete, the WSJ reports outsourcing high margin items to China (in contradiction to yesterday’s entry) while dividing inventory shipments into smaller lots. Again, the latter is typical of lean counterintuitive processes, big isn’t always better.

“We don’t accumulate. We sort,” says Valter De Santis, a mechanical engineer who runs Benetton’s logistics. Benetton now ships clothes every two weeks, but can speed up delivery to seven days if a product becomes hot.

However, I note with dismay that the standard paradigm as exemplified by the article still equates fast fashion with better logistics. Not to say that logistics aren’t important but if your ship is sinking, why does it matter how fast you get goods onto it? Due to insufficient detail, this jury is still out as to whether their practices are Lean or Lame.

Many fashion players .. focusing on product design and marketing rather than speedy turnaround times to drive sales. Gap Inc. blames its two-year sales slump partly on attempts to streamline the way it buys fabrics for its Gap, Old Navy and Banana Republic brands. The move was aimed at centralizing fabric purchases across the different brands and reducing the number of suppliers, but it ran afoul of the company’s designers.

The desire to avoid limiting the creativity of designers can lead many apparel companies to reject tighter logistics “like a virus,” says Steven Hochman, an analyst with AMR Research Inc, a supply-chain management consultancy. “It’s striking how much cultural inertia exists, but that’s really what’s going on.”

What they fail to mention is where the inertia lies.

Unrelated: An interesting wrinkle with regard to consumer spending, (sub req’d) men have started shopping for themselves.

There are signs that men are becoming more interested in fashion. Last year, 75% of men bought their own clothes, compared with 52% in 1995, according to Marshal Cohen, chief industry analyst with market researcher NPD Group. But while sales of luxury goods are booming, sales growth overall is slowing. Last year, U.S. sales of men’s clothing rose 2.9% to about $54.8 billion, compared with a 5% increase in 2005, according to NPD.

Lastly, speaking of the WSJ, there was an interesting article about the problems of retail golf stores failing to address the needs of female customers. One of our people is doing women’s golf attire but I don’t remember who that is. If that’s you, email me and I’ll forward a link to the article.

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