ProfitLogic Launches ProfitLogic 2004: An Expanded Merchandise Optimization Suite Designed to Help Retailers Make More Profitable Merchandising Decisions

Retailers Benefit from Solutions That Can Be Implemented within Months, Result in Significant Financial Benefits, and Deliver a Quick ROI

NEW YORK, NRF Big Show 2004, Jan. 12, 2004 -- ProfitLogic announced today the launch of ProfitLogic 2004, an updated suite of Merchandise Optimization solutions, which helps retailers make more profitable decisions throughout the entire merchandising lifecycle. Starting from pre-season planning through in-season management and clearance, ProfitLogic's solutions provide retailers with insight into future customer demand at the local market level, so they can cater to customers' local market needs and maximize sales and gross margin dollars. Because ProfitLogic handles all the number crunching and analysis, retailers gain time to focus on the things that matter most: the customers and the merchandise.

In his report, "How Retail Technology Can Make Fashion Smarts Smarter," issued in June 2003, Hung LeHong, research director of the retail practice at GartnerG2, advises, "Use technology to free your merchants to focus on the art of merchandising: surveying trends and negotiating deals. You hire your merchants for their abilities to read the market and find the right products to satisfy consumer demand. Merchandising technology can help by improving the outcome of number crunching activities. This will free your merchants to spend more time on what they do best -picking the right products, structuring the best assortments and getting the best deals."

In a November 2003 report, titled, "Retailers: Invest In Merchandise Optimization Now," authored by Forrester Research's Carrie Johnson with Joshua Walker and Noha Tohamy, the analysts address the question: Should retailers start evaluating merchandise optimization systems? They respond: Absolutely - the technology's combination of advanced analytics with merchant expertise produces gross margin improvements, better service levels and inventory turns, and faster decision-making.

With ProfitLogic 2004, retailers can apply Merchandise Optimization technology without major disruption to their business processes or technical infrastructure. The following are a sampling of ProfitLogic 2004's new capabilities and significant enhancements in the three main merchandising categories: 1) How much to buy?, 2) Where to put it?, and 3) How to price it?.


a. Inventory Portfolio Optimization: helps maximize overall profitability by identifying the departments in which retailers should increase and decrease their investments.

b. Breadth/Depth Optimization: helps drive sales and gross margin by recommending the number of customer choices by class and the depth by item to best meet each store's need.

c. Buy Quantity Optimization: helps increase customer satisfaction and sales by determining the total quantity of new items to buy based on like-items from past seasons, and upcoming trends.

d. Receipt Flow Optimization: helps minimize stock outs and overstocks by determining how an item's sales will unfold over the season and how receipts should be planned to meet that demand.

e. Pre-pack Configuration: helps determine the optimum number and make-up of pre-packs so that they best match store/SKU requirements at allocation time.


a. Size Optimization: helps minimize stock outs and overstocks by measuring size profiles for each store or store group.

b. Pre-pack Optimization: helps minimize stock outs and expensive markdowns by identifying the best allocation of pre-packs to reflect the unique size and quantity requirements of individual stores or store groups.

c. Allocation Optimization: helps drive full-price sales and increased gross margins by recommending initial and in-season allocations based on store demand.


a. Markdown Optimization: helps increase in-season sell-through and gross margin dollars with available markdown budget by determining the best timing and depth of markdowns at the chain-, region- or market-level.

b. Promotion Optimization: helps maximize promotional investments by determining the increase in sales based on an item's appearance and placement in a circular, TV ad, etc, and understand the increase in sales associated with the offer (ex. Buy One Get One Free, 25% off, etc.).

If you are interested in more information, please visit our NRF Booth #2161. Please also see the following news releases:

1. The National Retail Federation, ProfitLogic and Karabus Management Host Merchandise Optimization Seminar: The Next Frontier at NRF's Big Show

2. Northern Group Retail Employs ProfitLogic's Inventory Portfolio Optimization to Achieve Highest Return on Merchandise Investments

About ProfitLogic

ProfitLogic's industry-leading suite of Merchandise Optimization solutions helps retailers make more profitable merchandising decisions. The suite, based on the company's 20 years of experience providing analytical solutions for critical merchandising issues, is focused around four central merchandising processes: assortment planning, allocating, pricing and promoting. ProfitLogic has delivered fast, flexible solutions with significant financial benefit to industry leading retailers such as Ann Taylor, Bloomingdale's, Charming Shoppes, Gap Inc., including: Banana Republic, Gap, Old Navy, Gap International and Gap Outlet; The Home Depot, JCPenney, Lerner New York, Marshall Field's, Meijer Stores, Northern Group Retail, and ShopKo Stores. For more information about Cambridge, Mass.-based ProfitLogic, call 617-218-1900 or visit

Jakki Glivicky

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