Software firm discovers gold seams in clothing

THE FASHION business, generally considered as unhealthy as any in the current recession, has proved a surprisingly profitable niche for a young computer software company, writes Roger Trapp.

Just six years after being founded, Prologic, based at Berkhamsted in Hertfordshire, numbers a clutch of household names among more than 30 clothing clients, employs a score of people and is on the way to pre-tax profits of pounds 150,000 on turnover of pounds 1.8m.

Prologic's managing director, Sam Jackson, admits the market gap was found more by accident than design. Having started as a 'fairly unfocused' computer consultant in 1984, he found himself after two years doing a lot of work in the clothing business. He discovered there was a trend towards vertical integration, with wholesalers getting into retail and retailers making garments.

There were problems associated with the fashion business's belated embrace of modern technology, however. And Mr Jackson and his product development director, Karen Rankin, set about establishing an integrated solution.

Known as Prologic CIMS, the computerised management system - specially designed for the fashion industry - is able to link retail, manufacturing and distribution. By incorporating point of sale, stock control and order processing, it can supply the user with up-to-the-minute information at the press of a button.

'We don't think of retailers and wholesalers, but of source and destination. The users buy various modules that meet their needs,' said Mr Jackson, who believes his company is the only one covering the whole business cycle of the fashion industry.

Gaining Katherine Hamnett as a client gave the fledgling company early credibility, and since then a number of top-drawer names - from Arabella Pollen to Paul Smith - have signed up for the service.

Most recently, Aquascutum, the upmarket clothing company acquired two years ago by Renown International of Japan, and Hackett, the London-based men's outfitter recently bought by Dunhill Holdings, have signed up.

As the third largest industry in Britain, the fashion business has plenty of potential, says Mr Jackson. There are still plenty of opportunities for companies with the right merchandise and superior management, he says. And with mergers likely to introduce more profit-motivated management to the sector, he is confident about the future.

Although he confesses that over-optimism led to his company making a loss last year, he says the experience has proved beneficial in the long term. 'We thought we were on target for expansion, but a lot of sales just evaporated.'

In order to strengthen the balance sheet, Prologic was obliged to obtain a pounds 240,000 investment from BCS Computing, a venture capital operation specialising in the field.

BCS has also supplied two non-executive directors, Michael Brooke and Gordon Skinner, to fill gaps in management expertise.

At present, the firm has an order book worth pounds 350,000 - and with 2,800 prospects, the market is big enough to stand expansion for some time to come. Mr Jackson's research suggests that 60 per cent of companies in the fashion business do not use computers. Those that do have the technology tend to confine it to accounts and the like rather than running the business.

'The attitude of the old owner-director in the business was 'I could buy a Jag for the cost of a computer',' Mr Jackson said. 'But that's changing.'

(Photograph omitted)

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