Feeding Fashion

Harvey Nichols is the place to satisfy your high end fashion urges. But how glamorous are its stock warehouses?

Brian Shepherd, Senior Vice President, Al Tayer Logistics

Gucci handbag. Check. Pucci jacket. Check. Jimmy Choo shoes. Check.

No, this is not an article about the day in the life of a fashionista but about Brian Shepherd, Senior Vice President, Al Tayer Logistics LLC. Part of this group, after all, is Harvey Nichols, one of the world’s most stylish stores. Sheperd happens to be the behind-the-scenes-guy who makes the life of a fashion obsessed diva complete.

Sheperd is a logistics industry veteran of 40 years, so he knows exactly where he’s coming from and where he’s going. “The basics of logistics are the same in any industry,” he says. “It’s all about how you deal with different products, whether it’s coffee or clothes, you have to know how to manage inventory, move stock in the best possible way and handle costs.”

But the logistics of luxury fashion must still be different. Shepherd agrees. He says, “Fashion is treated very differently than other businesses, because we’re talking about high value luxury products which are very fast moving.” Other lifestyle brands like GAP, Banana Republic, have four seasons – Spring, Summer, Fall and Holiday. So essentially, warehouses are stocked up with merchandise for one particular season which are pushed out into the store in two phases, for example, Summer Phase One and Two. Summer One is the biggest push from a marketing perspective. Next follows Phase Two which lasts till almost the last bit of summer.

And unlike luxury brands, stocks of any particular season of lifestyle retail brands are purchased approximately six months in advance. Stock for Holiday 2009 (approximately from October 2008 to January 2009), for example, is purchased in January or February of 2008. This gives the team a large gap and ample opportunity to organise themselves and start bringing the first part of the product to the stores around September or October 2008. The launch and marketing happens by November and the range lasts right through December and January 2009.

Luxury designer fashion is changing all the time. This sets it apart in treatment and handling. Fashion savvy consumers want to find a new collection each time they go to a store, so they can be the first to be seen wearing a new piece of clothing. Buyers at Harvey Nichols buy selected styles in small quantities from suppliers selected by the buyers for the store. Harvey Nichols has a large number (close to 400) of suppliers. Bigger, more established brands like Bottega Veneta and Gucci may require larger orders since a number of these brands are exclusive franchise partners with Al Tayer Insignia and therefore buying is consolidated at a company level.

Buyers travel to brand headquarters a few times each year to select a range of products suitable for the region. These brands can be relied upon to provide a running range of styles to the buyers who have a certain value at their disposal and are very specific about their purchasing requirements. Buyers also continuously visit high fashion clothing fairs where they meet with new suppliers whose designs are of potential appeal to the Middle Eastern customer. Buyers are also regularly on the lookout for new suppliers from a variety of sources. This makes for a variety of stock in the store.

Accessories such as handbags are purchased in even smaller quantities. “We only purchase a limited number of different styles in handbags as that is the kind of business we do and also, here in the Middle East, we do not carry stock of fashion brands,” comments Shepherd.

Throughout the season, Harvey Nichols introduces new products so as to be up to date with the trends in the other fashion capitals of the world. This cross stocking gives UAE consumers the opportunity to own the latest designs from around the world. Almost everything is air freighted so as to ensure that fashion lines in the Middle East are usually launched at the same time as the rest of the world. The cost of air freighting is still very low compared to the value of the products coming in. Within a week from the time the stock arrives, it is processed through the warehouse and arrives at the shop floor.

And what happens to stock that does not get sold? “We have two major sales before and during DSF (Dubai Shopping Festival) and around DSS (Dubai Summer Surprises),” replies Shepherd. “To satisfy customer demand we have the option to move stock around from one store to another depending on demand. Whatever else is still left is sent to the outlet mall.”

Store in Style

The warehouse that stocks Harvey Nichols’ merchandise is in the Al Quoz Industrial area and is just one of the warehouses operated by Al Tayer Logistics. It is not exclusive to Harvey Nichols and services all the companies luxury brands. Purchased in 2005, it was converted into a distribution facility by the Al Tayer Logistics project team. All Al Tayer warehouses are temperature controlled.

As soon as stock arrives, it is unpacked, put on hangers, priced, security tagged and sent to the store. The store conducts further value added services such as steaming, but because the stock is moved so quickly it’s hardly subjected to any creasing. “Everything is treated with great care,” says Shepherd. “We ensure that all merchandise reaches our stores in perfect condition.”

Shipments arrive in Dubai by air from over 500 suppliers located in countries mainly in Asia, Europe and the Americas. The 52 staff members segregate shipments by store, scan them into the WMS system and place them in pallet storage by reach trucks, using hand held RF (Radio frequency) scanners. Within three to five days, the pricing is complete and the stock is withdrawn from storage and transferred to a processing area where the individual merchandise is priced and security tagged and made store ready. Merchandise is then scanned out of the warehouse and transported directly to stores within the average seven day window.

Fashionably challenged

We do face certain challenges in the region,” says Shepherd, explaining that the Middle East customs authorities require a country of origin statement for every item coming in. “As a number of the origin countries do not require this statement,” adds Shepherd, “some suppliers may face a challenge giving us a country of origin statement. This is an issue that can affect our overall efficiency. Although, this is not that much of a problem in Dubai.”

Another issue is organising the international supply chain. Shepherd says that some countries do not have regular flights coming into Dubai, hence they have to fly their merchandise through other centres, consolidating it in central, easily accessible ports, for example. Because the quantities purchased are generally small, however, bringing the supply chain together can be a challenge. “Dubai as a major international airline destination is not that much of a problem because now almost all major airlines come here, but some markets in the region can pose a difficulty at times and offer more of a challenge for our stock, as it may take longer to reach the stores,” he says.

Al Tayer is mulling expansion across various Middle East markets. Moving into Saudi Arabia could prove to be even more challenging as the kingdom’s customs procedures are traditionally stricter than other Middle Eastern countries. Efficiency is also a problem area there. “They’re not as efficient in Saudi Arabia as we are in Dubai for clearing shipments,” says Shepherd. “Our air shipments arriving in Dubai get cleared within a day of arriving. We’re also a known and accredited Platinum customer of Dubai Customs, which gives us the validation of having excellent, certified products.”

The portfolio

Al Tayer’s attire section is divided into two categories: Al Tayer Trends, which are the mass market brands like Gap, Banana Republic, Mamas and Papas, At Home, Texture and Galler Chocolates. The second category is Insignia. Labels that fall under Insignia are Gucci, Giorgio Armani, Emilio Pucci, Jean Paul Gaultier, Sergio Rossi among others. As if being the biggest high value fashion brand retailer in the UAE was not enough, expansion is being considered all over the region.