Retailer Michaels Stores Plans Major Systems Rollout

In a sign of the retail industry's resilience in IT spending, Michaels Stores Inc. is implementing JDA Software Group Inc.'s JDA Portfolio advanced forecasting and replenishment software to boost sales and inventory turns. The deal is good news for JDA, which failed to meet financial expectations in its most recent quarter after hanging tough through much of the IT spending downturn. Michaels, a $2.5 billion company, has used JDA's Advanced Warehouse Replenishment by E3 for eight years to optimize its inventory replenishment. The company will now integrate JDA's Advanced Store Replenishment by E3 and Network Optimization by E3 to manage its product/store combinations while centralizing store-level replenishment. Such functions are critical at Michaels, which currently has more than 700 stores and plans to expand to more than

1,000. Each store has 35,000 to 40,000 SKUs. That means its systems need to support as many as 40 million store/SKU combinations, so scalability was a critical consideration. Michaels is currently deploying Advanced Store Replenishment. Following acceptance testing, it will conduct a pilot program involving five stores in the fourth quarter of this year. By spring of next year, the company's remaining stores are scheduled to begin going live, with all stores scheduled to be on the system within 18 months of initial rollout. Once rollout of Store Replenishment is complete, Michaels will deploy Network Optimization.