Using Nextail, Pepe Jeans increased sales with less inventory
Pepe Jeans went shopping for the best dynamic stockroom solution on the market
About Pepe Jeans
Pepe Jeans Group owns several brands such as Pepe Jeans London, Hackett, Norton Clothing and Façonnable. The group also distributes Tommy Hilfiger and Calvin Klein in Spain and Portugal. The Pepe Jeans Group operates 373 stores directly, and 128 in franchising.
When it approached Nextail, Pepe Jeans was looking to improve the stockroom management currently in use at its Regent Street’s store (London, UK). At the time, since the brand’s allocation process was manual, Pepe Jeans had no cohesive view of where stock could be best placed and no insight into which lines should be sent to which locations to maximize sales opportunity.
This lack of visibility translated into Pepe Jeans having high coverage. In the highly competitive premium denim landscape, not only can unmet demand result in harmful deadstock, but warehousing the complex sizing and fits associated with denim is extremely costly.
On a second wave, Pepe Jeans raised another problem it was facing in its Spanish retail stores: its sell-through before sales was far off its objective with high coverage among stores. The Spanish retail store network is the core of the group’s business.
Pepe Jeans first implemented Nextail with one goal in mind: to generate more sales. It pursued this goal through more accurate replenishment and optimized store transfers that are automated with artificial intelligence.
Nextail launched a replenishments pilot with Pepe Jeans in their Regent Street location (London) that started in September 2017. During this time, sales increased while coverage was reduced significantly for one of the company’s main products, denim. Nextail’s replenishment module was able to evaluate store capacity so that, if reached, units would be sent to the stockroom.
The results of the first pilot led to a second, much larger pilot in Pepe Jeans’s 35 retail stores in Spain in August, 2018. Due to the positive results of this pilot, Pepe Jeans completed a full rollout of Nextail in triple the amount of (online and offline) stores and went live with Store Transfers across the network in 2019.
Impact at a glance
In the Spanish store network, Nextail contributed to putting an end to an alarming decrease in sell-through from year to year, and helped these stores to increase sell-through by 2 percentage points even while store coverage was reduced by nearly 26% on average – compared to its most similar region, Portugal – in just four months. Ultimately, Pepe Jeans was able to deliver a better level of service with less inventory.