John Varvatos Builds IT From Scratch to Deliver the 360-degree Rock'n'Roll Experience

5/7/2013
In the world of music, rock stars are often notorious for their over-the-top or bizarre demands. Alice Cooper famously requested an extra hotel suite kept at a very warm temperature to accommodate his pet python, and the Foo Fighters curiously asked for a copy of tearjerker rom-com "The Notebook" to be available while on the road for the band's 2011 world tour.

"But just like a rock star is allowed to say 'I want only Stoli vodka and not Grey Goose' or 'I want only brown M&Ms' and they get that — they have to go out and perform and deliver," says Lee Goldenberg, vice president and CIO for John Varvatos Enterprises, which has used Cooper as a model in an ad campaign and whose garments the Foo Fighters' Dave Grohl has worn to awards ceremonies. "It's the same thing here: we're giving our employees the rock star experience through IT and our people are expected to deliver."

The self-described "rock'n'roll brand," John Varvatos executes that brand identity not only through its clothes but also in stores, which are located in New York, California, Las Vegas and Florida. One of its New York City locations on Bowery occupies a space that formerly housed legendary rock club CBGB, and the store recently hosted an event that transformed the shop back into a nightclub. "The cash wrap became a bar and Vintage Trouble and blues man Gary Clark, Jr., performed," says Goldenberg, who adds that the company  live-streamed a show featuring Cheap Trick in April. "Now we have the infrastructure to do this kind of thing."

John Varvatos set about pursuing that brand-driven infrastructure after it separated from longtime parent company VF Corp. in April 2012 — which Goldenberg likens to "getting an amicable divorce" — and although it was allowed to stay on VF's IT platforms during the transition, it needed to migrate to its own systems eventually.

That prompted Goldenberg's four-person IT team to investigate the best solutions for the brand's needs. "Since I was starting completely from scratch as far as our network goes, I didn't need to be concerned with prior investments in technology and good or bad decisions by people in the past — supporting someone else's legacy," he explains. "We were given the opportunity to create our own legacy. In this day and age, the cloud is the only way to go. I didn't
want server farms to develop here. I wanted very much to allow people to work in an environment that was as non-restrictive as we could allow, and work anywhere, anytime, anyplace via VPN on the Web and on any device."

While with VF, John Varvatos used a host of disparate IT systems, including RLM for manufacturing and ordering processing, and Goldenberg opted to stick with the vendor, deploying a host of solutions, including RLM Apparel Software, FashionManager ERP and the FashionManager Financials. Aided by consulting firm Insight Technologies, the brand went live in January 2013 on the RLM FashionManager Cloud platform, with plans to implement the RLM FashionManager PLM system later this year.

The brand moved aggressively with its software schedule. "We're not afraid to take a risk," Goldenberg says. "Either give me a problem and I'll find technology to solve it, or give me technology and I'll find ways to use it to make the business better."

One of the biggest game-changers, according to Goldenberg, is the new retail package KWI, which interfaces almost seamlessly with the RLM systems. "It's good retail software designed for the branded apparel business," he explains. "Out of the box, they have mPOS capabilities, which our stores use not only for sales but also receiving transfers and shipments." In a future upgrade, the platform will accommodate cash sales on mPOS. "The trick is that you have to be able to open a cash drawer with it," says Goldenberg. "Not that we take a lot of cash."

One system that ties merchandising to POS on the back end was written and fully owned by KWI. "They're very aggressive on the development and innovation side," Goldenberg says. "They're so willing to work with customers to develop some really cool [stuff]."

RLM's rich built-in options at every step of the process helped John Varvatos to design user-friendly interfaces that deliver the level of detail its management needs. For example, says Goldenberg, he and the CFO needed a way to report gross profit and loss — gross sales and cost of goods sold — by product category in each of its two lines: Star USA and John Varvatos Collection. "We needed to report these numbers for wholesale and for retail, but there isn't a single end-to-end system in the world that does both," explains Goldenberg.

As a solution, his team created division, subdivision, and product categories that match the corresponding department, class, and sub-class numbers on the retail side. "We now have interfaces being built that bring this information back and forth on a nightly basis. We can see the differences for example, in how products are selling at Nordstrom versus how they sell in our retail stores."

The company already has benefitted from an increased level of insight into selling trends. After opening a boutique in Miami in the second week of April, John Varvatos discovered that, contrary to expectations for a city where temperatures hover in the mid-80s, leather goods were selling like hotcakes. Why? As it turns out, the metropolis was chock full of tourists visiting from South America, where April is a winter month.

And the resilient cloud platform was tested late last year by Superstorm Sandy and stood up to the challenge, says Goldenberg. Although the company headquarters at 17th St. and Fifth Ave. lost power for five days, the cloud servers, which are backed up by Rackspace in Michigan, were up and running in no time. In fact, Goldenberg was notified that the servers were online even before power was restored to the office building, thanks to a program
written to alert designated personnel when the servers go on- and offline. "Our workers who were stuck at home but who had power could access the systems and get work done," he says. With the cloud platform, "we don't ever really need to come to work in the office."

In order to improve its customer experience, John Varvatos duplicated its corporate wireless network design in its boutiques. It maintains a PCI-compliant company network in retail locations in addition to a separate visitor network. Vendors who visit the office can access the guest network for wireless needs and customers in store can surf the web, listen to music and chat.

"It's frustrating to see people sitting in a meeting and taking notes and then sending out notes afterward," Goldenberg explains. "The wireless network and cloud platform allow us to have instantaneous access to information so we can do things quickly. "We're blessed that John gets to do the Fashion Star TV show, but that means he's in California for six weeks," says Goldenberg. "Now he's better able to stay connected and current."

Read up on all of our 2013 Top Innovators here.
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