Logility, a division of American Software, took a bold step to build a strong presence in the retail planning market by announcing its acquisition of MID Retail, a provider of retail merchandising, assortment optimization, and store-level replenishment solutions.
SCDigest Says: |
 Sources tell me that MID Retail offers a sort of "understandable" solution set, which is also something many current Logility customers often say is the reason why they went with the company.
Click Here to See Reader Feedback
|
Logility, known for its Voyager supply chain planning solutions in consumer goods and select industrial markets, lacked real capabilities in these areas of retail planning, versus such competitors as JDA Software. The MID Retail acquisition plugs a number of those holes, and changes the dynamics of the retail planning market.
The move to acquire MID retail came after something of a "speed dating" process.
Karin Bursa, VP of marketing for Logility, told SCDigest that the two companies first started connecting on a couple of mutual customers/opportunities about a year ago. At its user conference in March, Logility announced a partnership with MID Retail, which led SCDigest to wonder if an acquisition might not be a possibility. But we certainly did not expect that to happen less than three months later.
MID Retail's customer base is focused in the retail soft goods sector, such as apparel and shoe retailers. Customers include Abercrombie & Fitch, BonTon, Clarks, Maurice's, Finish Line, Men's Warehouse, Orvis, and more. It has a few retail clients outside of soft goods, such as Big Lots and Tuesday Morning stores.
Logility itself has had strong recent success in branded apparel companies, with customers such as Under Armour, VF Corp., Columbia Sportswear, and more.
The primary impact of this move, once the usual "integration" issues are sorted out, is first to create a larger and likely more formidable planning competitor in the retail marker, and similarly to open up a large and highly dynamic new retail market sector for Logility, increasing substantially its revenue potential.
Logility is the by far the largest component of American Software. After several years of strong growth, it struggled a bit in 2013, as did JDA Software. After reaching $24.4 million in supply chain software license sales in its fiscal year 2012 (which ended April 2012), it fell back to $18.9 million in fiscal 2013, amidst a somewhat mysterious pullback across much of the planning market last year.
Reflecting that slump, American Software software license sales, which mostly reflect Logility, were down about seven percent for the nine months that ended January 31 of this year, to $14.4 million.
(Supply Chain Trends and Issues Article - Continued Below)
|
Logility did not disclose MID Retail's sales or what it is paying for the acquisition. It said all of MID Retail's key executives were staying on at its existing headquarters in Indianapolis. Logility is based in Atlanta.
