Expert Interviews, Part Three: Collection Management – Profitability and bottom line

October 29, 2012 by Ben Hanson in Guest blogs with

Suppliers mentioned in this article: Lectra

For CEO’s it is of course important to ensure that brand values are respected, but innovative designs and good quality garments are not enough, they must be done profitably to keep apparel companies in sustainable growth. How can this be achieved? Expert interview with: Bruno Mattia, Director, Strategic Accounts Fashion

Ben Hanson: I’ve spoken with your colleagues Philippe and Stacey recently, and we talked about how retailers and brands can maintain standards of quality, design, and brand loyalty in a rapidly-shifting marketplace.  We all agreed that a large component of what makes this possible is technology – solutions like Lectra’s – but the processes we focused on were very particular (design, garment technology, fitting and sampling) but we’ve yet to touch on what for any business is an equal motivator to creativity: profitability.  Do you believe it’s possible for a brand to remain creative, quality-led and profitable in today’s climate?

Bruno Mattia: Of course. There are examples of extremely successful companies that deliver creative, quality products at a profit. Just look at the European fast fashion leaders H&M, Mango and Zara. They are able to do this because they don’t treat quality, style, and cost as separate concerns. They analyze and address them at the same time. Reconciling these three concerns is the secret to succeeding in fashion today. To get there, companies improve process and organization by investing in technology that supports the kind of collaborative work required to bridge traditionally separate priorities.

Ben Hanson: Is profitability just a matter of setting the right price point and conducting well-researched marketing, or does it have a place earlier in the product development process?  Should brands be considering manufacturing costs before they even put pencil to paper, for example?

Bruno Mattia: Taking manufacturing costs into consideration before or in tandem with design relates again to the idea of balancing style, cost, and quality. If a product is too expensive for a target market, no company would waste time designing it. Knowing the limits that production puts on design ahead of time is essential to crafting profitable collections. So yes, brands should aim to know as much as possible about manufacturing costs before they define collections.

Ben Hanson: I believe it’s clear that technology and solutions enable a great deal of the streamlining and optimisations that allow inefficient and costly traditional methods to become leaner and more productive, but what particular areas of product development have you found that retailers and brands are able to transform to the most noticeable degree?

Bruno Mattia: To really transform, brands have to go beyond improving individual areas, otherwise they risk perpetuating the silo mentality we often see. True transformation happens when improvement is undertaken collectively, across departments. One of the biggest challenges in apparel today, for example, is connecting design and product development. An improved design room organization or better pattern-making technology will bring only so much benefit. Only profound process change that bridges individual areas to create new and innovative ways of working and sharing information can bring the kind of transformation that elevates brands to new levels of competitiveness.

Ben Hanson: With this in mind, should businesses with limited budgets be looking to improve their processes (either by implementing a solution, conducting detailed introspection, or both), as a whole, or do you believe they are more likely to achieve profitability by focusing on their most pressing challenges first?

Bruno Mattia: The two are not mutually exclusive. Not every company is ready for profound organizational change although this is usually the most efficient way to make transversal improvements that support collaboration and greater profitability. This requires investment, but not only financial investment—large-scale projects require preparing structure and process to receive the technology. This preparation can begin in isolated areas with the long-term goal of linking them together. Some of our customers have done exactly that. They improved design, which helped them grow; then they improved product development, which pushed them a little further. At that point they found themselves ready for the next step, which was to connect the whole with a PLM solution.

Ben Hanson: In the longer term, what do you see as the clearest opportunities for retailers and brands to increase their profitability while simultaneously keeping pace with consumer demand?  Is it possible to make blanket predictions, or are the opportunities for each company unique?

Bruno Mattia: Companies that want to grow realize the need to continuously adapt if they hope to keep up with consumer demand. As a result, we are witnessing a singular shift in the industry: companies are realizing that their power lies in having control over as much of the value chain as possible. This means retailers are getting into manufacturing, brands are getting into retail, and manufacturing is getting into brands—and we see the emergence of hybrid business models. If we return to the idea of balancing style, quality, and cost, this hybridization is really a clever strategy; by expanding into the value chain, companies give themselves an immediate advantage by bringing the areas responsible for ensuring these factors together under the same roof, so to speak.

Ben Hanson: And, thinking even further ahead, a profitable company will always be interested in growth and expansion.  What steps can a retailer or brand in this situation take to ensure that the profitability and efficiency they’ve worked to achieve isn’t lost when expansion begins?  Is this something that modular solutions and solutions with integration capabilities can help to achieve?

Bruno Mattia: Modular solutions offer a very practical and adaptable way to support long-term growth, but it’s important to think of these improvements as part of a greater vision. This is why Lectra’s offer goes beyond technology and training to include consulting and support. We realize that today a company may only be interested in or ready to improve design or product development, but that eventually the benefits of that improvement will allow them to expand further. And when that time comes, having a holistic improvement plan to support growth will be what ensures sustainable success.

About Ben Hanson

Ben Hanson is one of WhichPLM’s top contributors. Ben has worked for magazines, newspapers, local government agencies, multi-million pound conservation projects, museums and creative publications before his eventual migration to the Retail, Footwear and Apparel industry. Having previously served as WhichPLM’s Editor, Ben knows the WhichPLM style, and has been responsible for many of our on-the-ground reports and interviews over the last few years. With a background in literature, marketing and communications, Ben has more than a decade’s worth of experience, and is now viewed as one of the industry’s best-known writers.

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