News

IT problem hits profits for retailer

Daniel Thomas
Clothing and home furnishings store Laura Ashley confirmed last week that "teething problems" with new stock control systems had affected its profit levels last year.

The news underlines the importance of IT to retailers' bottom lines.

The company, which saw like-for-like fashion sales rise by just 1% in the year to the end of January, said problems had arisen following its implementation of a merchandise management system from software supplier JDA in September 2001.

The problems related to the visibility of inventory, a Laura Ashley spokeswoman said. "The home furnishings systems showed less stock than there actually was, while the fashion systems showed too much stock. It was a polling issue - wrong information was coming out of the tills, which were installed in November."

The spokeswoman said the company considered teething problems inevitable with any new IT system, and had worked with JDA to resolve the problem.

The home furnishings part of Laura Ashley's business showed stronger growth for the period, with like-for-like sales up by 18%. The company is planning to invest £8.95m in a new distribution centre to support the home delivery element of the furnishings business.

  • Clothing retailer Matalan highlighted the importance of IT to its business last week, revealing plans to invest £25m over the next three to five years to upgrade systems dating from the 1980s.

    A spokeswoman said the move was about bringing systems up to date, rather than inherent problems. "The systems, although old, are very robust and have taken the company, since flotation, through consistent increases in both sales and profits."

    The first system upgrades - financial and supply chain - will take place over the next 18 months, she said.

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