Pimkie Digital Transformation Initiatives

About the Customer

Pimkie is privately owned. It is a fast fashion label and store chain for young women's clothing with shops all across Europe and headquarters in Villeneuve-d'Ascq near Lille northern France. Three other offices exist in Germany, Spain and Italy. The company is part of the Association Familiale Mulliez, founded by Gérard Mulliez. A first shop was opened in 1971 in Lille under the label Pimckie - the name was changed to its current form in 1983.

Scope and Challenges

Accessible-fashion company Pimkie works with over 200 suppliers located across Asia, Maghreb, Turkey and Europe. The company handles €230 million in purchasing each year.

The company identified multiple inefficiencies which needed to be resolved. With half of the company’s purchases made using letters of credit – particularly with Asian suppliers – the goal was to optimize existing purchasing processes. “The existing management method imposed a greater workload on our teams with little value added, and its extensive process lead to numerous errors,” -said Grégory Ambrosio, Group Treasury Manager at Pimkie

Additional goals included the desire for a more global approach, and the need for working capital optimization within the company’s payment terms. The company also wanted to incentivize suppliers to improve their corporate social responsibility (CSR) performance, and strengthen its strategic partnerships. “Within our industry, it is important to offer visibility to our suppliers and plan for stable, long-term relationships with even greater flexibility,” said Ambrosio.

Outcome and Implications

In order to achieve these goals, the company embarked on a project to adopt a reverse factoring program which would be offered to 60 suppliers, representing 85 percent of the company’s purchases and €190 million in eligible invoices. Following a four-month analysis phase to adopt a highly secure, bank-independent solution for the company, the treasury team presented the project to senior management, who quickly approved the project. Pimkie selected Kyriba to provide the technology platform. Once approved, the project mobilized several departments, including CSR, Purchasing, Accounting, Supply and IT, thereby enabling internal processes to be optimized. During the four to six-month deployment phase, the company worked closely with BNP Paribas Hong Kong and Kyriba. An important step was arranging a roadshow for suppliers in China, Turkey and France in order to convince local suppliers to join the program.

Since launching the program, Pimkie is on track to achieve its goals. By offering 60 key merchants the opportunity to take part in the program, the company aims to achieve working capital improvements of around €12-€15m per year once the program is fully operational. Suppliers, meanwhile, receive payment 14 days earlier than they did when using letters of credit, enabling Pimkie to strengthen key supplier relationships. Pimkie has also leveraged the program to support its CSR goals. The financing rate offered to suppliers is determined by a CSR score allocated by Pimkie, with top performers benefiting from an enhanced rate while low performers are not able to take part in the program. “This creates a powerful incentive for our suppliers to raise awareness and consistently improve their CSR performance,” -said Ambrosio.

Ambrosio notes that effective supplier onboarding was key to the success of the project, as was the involvement of the Information Systems Department (ISD). Another crucial consideration was the need to gain approval of the program from statutory auditors on a commercial debt model, so that trade payables would not be reclassified as financial debt.

“It is important to anticipate this phase, since it may take time,” Ambrosio said.

Looking ahead, the company plans to open the program to nonmerchant suppliers based in Europe and to smaller merchant suppliers, as well as implementing the program at Pimkie’s sister companies. “The solution also allows us to plan for the future, financing our suppliers based on our own cash surplus through a Dynamic Discounting program,” said Ambrosio. Meanwhile, a paperless invoicing project already underway is expected to reduce invoice validation times further, enabling participating suppliers to receive early payment even faster.

Quotes

“Globalization of supplier relations requires the implementation of technological solutions able to securely manage transactions in a multi-country, multi-bank and multi-currency context. Pimkie suppliers will have full visibility of approved invoices and will be able to select early payment of one or more invoices, with more attractive rates than short-term financing,” “Pimkie will continue to pay its invoices at contractual maturities without impacting its working-capital levels.” -said Edi Poloniato, VP Sales and Marketing at Kyriba.


1, rue John Hadley F
Villeneuve d\\\'Ascq, 59652 , x
France
33 1 704 8903
https://www.pimkie.fr/
Industry Employees Revenue
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Enterprise Software and Cloud Applications Purchased by Pimkie


Vendor Old Product New Product Function Market Users VAR/SI When Live
Kyriba Legacy Applications Kyriba Treasury Treasury and Risk Management TRM n/a n/a 2017 2017

IT Decision Makers and Key Stakeholders at Pimkie


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