Fung Capital is investing in Centric Software, a provider of product lifecycle management (PLM) software to the apparel industry, helping the US company’s expansion into Asia.
Californiabased Centric said yesterday (July 29) it had secured US$24m in growth capital from financiers including Fung Capital USA - the investment arm of Hong Kong-based Fung Group, which includes Li & Fung.
«Centric entering Asia was a big factor in our investment,» said John Seung, partner at Fung Capital USA. «With our connection in Asia…we’re in a position to add a lot of value to this company,» he added. Other investors to Centric included Silver Lake Waterman, Oak Investment Partners and Masthead Partners.
Chris Groves, Centric president and CEO told just-style: «We’re setting up in Shanghai, our Asia headquarters…we are going through the process of setting up the subsidiary, we’ve got our employees on board, and we’ll be moving into our facility in August.»
He noted the money will help fund Centric’s expansion into Asia while furthering research and development of mobile applications that work with its Centric 8 PLM solution.
Centric’s Chinese customers include women’s wear retailer Cache Cache China, while its European, US and Asia clients are apparel and high fashion, footwear, and sporting goods manufacturers.
Meanwhile, Groves said one key area of opportunity is in China’s apparel market, where suppliers that once produced for brands and retailers are now creating their own brand and products largely for domestic consumption, but also for export.
«Our software allows people to merchandise, design, develop, sort, market and sell. We can bring a lot of value to companies,» he said.
Supply chain solution Indeed, Centric’s solution is «customisable, efficient and predictable», Seung explained to just-style.
He also noted that software such as Centric’s solution can be crucial to apparel firms efficiently managing supply chains: «These supply chains and these companies are getting more and more complicated. Especially if you look at markets like China… local domestic brands are growing very, very quickly. [Firms] like that absolutely need these types of tools. You can no longer do it with a piece of paper and pencil.»
Groves added that Centric’s PLM is particularly well suited to manage complicated apparel supply chains. «That’s where I think Centric is really strong. It gets very complicated [to manage] things like style, colour, size, and sometimes… inseam, the width in a shoe. It can also be critical in managing the movement of inventory, which can include varied levels, such as moving an entire style compared to moving a single colour of a style.»
Software solutions such as PLM offered in Asia could encourage the market there to adopt more automated, efficient processes, Seung said. «In the [Asia] apparel space, it is incredibly manual still.» This, he noted, was because of the way brands have tended to move to sourcing countries with lower labour costs when their current location begins to develop and become more expensive. This technology could be an alternative to this sourcing strategy, he said.
«We’ve hit the end of the globe and it’s time for us to start automating and get efficiency and cost benefits, not by moving to cheaper labour countries but truly improving business processes.»
Centric said it plans to improve on its mobile applications to allow users to complete certain tasks on the PLM system using mobile devices. These currently include: ‘Capture It for iPhone’ (which allows the capture and upload of photos directly to the PLM for instant review, mark-up and analysis); the ‘Collection Book/iPad Mobile App’ (which links a collection of styles from the PLM to customers through an interactive mobile device); and the ‘Sample Review Mobile App’ (which allows for quick PLM view and edit functions).
Groves also believes there could be opportunities to expand Centric products into South America. Centric signed its first customer in the region last month - women’s clothing manufacturer STF Group, which is based in Colombia.