Forbes – INTURN Wants To Speed Up The Pipeline From Clothing Brands to Discounters
April 3, 2018
INTURN Wants To Speed Up The Pipeline From Clothing Brands to Discounters
By Peter Carbonara
A perennial problem for clothing brands –not to mention beleaguered retailers like H&M — is what to do with all the stuff they can’t sell. There is a lot of it. Ronen Lazar, CEO and cofounder of INTURN, a New York-based software company that bills itself as an answer to the headache of excess inventory says, “It’s a quarter trillion annual space in just apparel and footwear. There’s $1.5 trillion of overstock.”
Lazar says INTURN’s subscription-based software can pull inventory data from all the multiple legacy systems a manufacturer or retailer is likely to have and put it one place. The company can then show detailed product information, including size, style, color, quantity and pictures of the goods online to potential buyers, be they national off-price chains, online flash-sale companies or local mom-and-pop discounters. When a price is agreed on, the transaction is done online and INTURN gets a commission paid by the seller of up to 4.5% Lazar says, in addition to its subscription fees: Lazar says, “What we’ve done is streamline all the painful elements of what historically was drawn out to a period of weeks into hours or a couple of days.”
According to INTURN senior vice president Tony D’Annibale, a former head buyer at now-defunct New York clothing discounter Loehmann’s, the current business of buying and selling overstock is a slow and messy one. Product is offered to discounters in showrooms or via Excel spreadsheets, which can be enormous and aren’t set up for photographs. The time lag between identifying a dress or style of shoe that is not moving and getting it to a discounter can be several weeks, an eternity in a business built on changing styles and numerous buying seasons. “It’s insane,” D’Annibale says. The older the inventory gets, the more likely the maker or retailer will be forced to sell it cheap to low-end jobbers who will sell it to dollar stores or liquidate it overseas.
So far INTURN (as in “inventory turnover”) has raised a total of $36 million from a list of investors like Forerunner Ventures’ Kirsten Green and Bluefly founder Ken Seiff as well as Facebook founder Eduardo Saverin and B Capital Group, which is affiliated with the Boston Consulting Group. The company has 60 employees mostly in its New York City HQ. It also has a small satellite office in London.
Lazar says INTURN has 100 customers in the United States and Europe using the platform, which he describes as “mostly large multi billion brands. They are the largest brands in the world.” Both he and his investors decline to name any, however, saying fashion brands worry about damaging their images by talking publicly about discounting and retailers don’t like to admit they need help managing inventory. Ken Seiff says, “I can tell you what they would say. They’d say, ‘We don’t have an inventory problem.'”
One top executive with a company that subscribes to INTURN says he finds the platform impressive but has not seen a wide enough selection of the product he’s looked for. Lazar admits that it has been a challenge to convince brands and retailers used to the old way of doing things to invest in new technology, but he says it’s getting easier as the pace of retail speeds up and discounting continues to boom. “Four years ago when I started the company, people said we have no inventory,” he says. “Two years ago they were like, we have inventory but we have systems. Now people are waking up and realizing we don’t have anything.”
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