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Interview: Church's plots international expansion and eCommerce growth

Luxury shoe brand Church’s is based in Northampton, UK, but is extending its international credentials thanks to its technological investments and ownership by fashion house Prada.

By the end of 2018, the company hopes to have opened its first shops in Germany and South Korea, as its global growth continues, supported by new retail, manufacturing and wholesale systems, and an ambitious senior team.

Assuming landlord discussions go as planned, four stores – two in Germany and two in South Korea – will soon be added to its international network of shops, which already stretches across most of Europe and Asia’s largest retail markets.

Church’s chief financial officer (CFO) Hamun Shah notes: “If you look at our distribution – we’re in France, Italy, Spain, Sweden, Denmark, and Belgium – it’s logical that we should have a presence in the most successful European country, Germany.

“We have wholesale partners there already, so the brand is known.”

Booming luxury economy

It’s the same for South Korea too, which he describes as having “a booming luxury economy”. He says the combination of retail and wholesale in one region can also have a major impact on eCommerce sales, describing how a store presence builds momentum in the local online space.

“If you advertise properly it just creates brand awareness which manifests itself in online sales as well. People get to know your brand and they know their size, so they might start buying online for convenience.”

It is this type of joined up thinking that is part of Church’s current major technology investment strategy, which will see the introduction of Dedagroup Stealth’s end-to-end ERP embedded across its business.

The move, which will see Church’s retail, wholesale and manufacturing systems come together on one internationally-focused platform, comes 12 years after Prada acquired Church’s. The technology – used by many luxury fashion brands in Italy, including the wider Prada group itself – replaces a Prima Solutions system that is no longer being supported by the supplier.

Stepping away from legacy systems

It is another sign of the global focus Church’s has developed under its current owners, and the move was certainly overdue, argues Shah, who says the tech implementation is already generating more accurate reporting capability and a lot less product information duplication, as well as speeding up processes.

“Our legacy systems on manufacturing, retail and wholesale were around 20 years old,” he explains, saying they were practically “prehistoric”.

“They were here prior to me joining the group and I’ve been here around 17 years now.”

Church’s whole manufacturing system is fully supported by Dedagroup technology now, as are its European retail operations. The transition to new systems is currently in progress within the brand’s Far East and US arms, but it should be completed by the end of 2018.

At the front end, the company is installing Oracle’s X-Store point of sale technology, which Shah predicts will create a “better customer experience”. The start of that roll-out happened in Italy in July, and is also occurring across Prada’s own stores for consistency.

“We’re continually working to makes sure we’re at the forefront of any technological advances,” the CFO says.

“Working for a brand like Prada, you find they want to be at the forefront of change and ahead of the game to get a competitive edge.”

Piggyback IT infrastructure

Indeed, Prada’s technological expertise and resource is identified by Shah as a plus point of the existing ownership model, so much so that Church’s doesn’t have its own CIO or board-level tech representatives.

“Prada has a big IT team based in Tuscany and Milan, but it has teams dotted around the countries in which it operates,” he states.

“Church’s piggybacks on to Prada’s IT infrastructure and is one of the key benefits of being part of a large group. We can rely on their experience and specialists when we want to do something.”

Generally speaking, luxury retail has been slower than other verticals to push strongly into eCommerce, with leaders of some of the world’s largest fashion houses still publicising their concerns about watering down brand reputation by selling online or teaming up with marketplaces to sell goods.

Research from market intelligence business Verdict Retail, however, suggests that online pure-plays will account for 30% of online luxury spend by 2020, and the recent merger of Yoox and Net-a-Porter, and the continued progress by the likes of Rent the Runway, Zalando and Farfetch, prove there is a business case for selling luxury fashion online.

So, does luxury fashion still lag behind when it comes to tech investment and eCommerce penetration? “I would have agreed a few years ago, but Prada and other luxury players are all investing heavily in the online channel and developing it in a different way to high street brands,” Shah asserts.

“It’s moved on and I think they are doing it fairly successfully – they are investing massively in that. I don’t think there’s that reluctance to embrace online retailing there was a few years ago.”

The figures clearly do the talking for business leaders, and at Church’s it is experiencing single digital growth in its core retail business but 30-40% annual sales upturns in eCommerce, according to Shah.

Church’s will continue its multichannel approach in the countries it targets, but Shah says the business is in initial discussions to take what is currently a fledgling partnership with Farfetch even further. “Credit to them because they have seen a gap in the marketplace and taken advantage of that – they can sell in the most remote places very easily,” he adds, hinting at ways Church's plans to use eCommerce to stretch its global reach.

That, alongside its imminent arrival in Germany and South Korea, and exploring opportunities to open up shipping to the Far East, China and the US, are all on the Church’s to-do list for the months ahead.

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