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Hunkemöller boosts bottom line by making most of its assets

Bras and knickers come in all shapes and sizes. But for a company trading lingerie across 900 stores in 19 countries, ensuring the right style and fit is available to all customers can be a complex business. That’s why Dutch underwear brand Hunkemöller decided to revamp its inventory replenishment system to support sales growth.

From originally selling corsets in Amsterdam in 1886, the brand now has plans to increase its number of stores to 1,300 in the next five years and intends to double its sales volume.

When Nick Bailey, global merchandising, planning and distribution director, joined the company three years ago, he says it had a very basic allocation replenishment system, running on an old version within SAP.  “It had served us well in success over 9-10 years, but in terms of dealing with complexities, it was clear that in order to use data better would need a far more automated solution,” he tells Essential Retail.

Restocking to meet varying customer demand can be less than straightforward. One of the challenges is the sheer volume of its lines, all with individual stock keeping units. For example, a single bra style can have up to 57 different sizes. In addition, taste preferences can differ across regions. “The variances we get, say, between Spain and Scandinavia, and everything in between is just so different.”

The company decided to partner with planning and allocation specialist Columbus Consulting, and selected supply chain management software from Logility Voyager Solutions to improve stock replenishment and ensure availability in the right stores.

Previously, Hunkemöller would only send out a set bundle of selected styles and sizes – ’pre-packs’ – from its warehouses on a country-wide basis, rather than inventory tailored to customer preferences at a store level.

More uplift

Under the new process, it can adjust stock replenishment on a more granular basis. “We’ve got such rich data in terms of how we are selling in a specific location. We have a system now where we send out the initial pre-packs, but then at a store location level we can calculate the need and start becoming more bespoke,” he says. “A tool like this gives us extra agility and flexibility.”

By making replenishment decisions as late as possible but in a timely way, it is able to place stock where there is going to be most demand and sell more full-priced items, he says. “That is ultimately driving higher profits.”

The system was first introduced last September and rolled out more widely earlier this year. Although it’s early days for gauging specific metrics, he says it has already driven out far more stock to where it’s needed.

It will also complement the business’ large transformation programme, which includes the introduction of a new order management system to support its omnichannel offering.

Bailey says the brand is continually investing to be at the forefront of the latest technology. “We are very digital with our interaction with consumers.... for example with Instagram, we were one of the first retailers to allow users to click on an image and go straight onto our website to buy the product."

Purchasing underwear has certainly come a long way since its early days selling girdles in Holland.