Not even two months into 2021 and the fashion and textile technology industry witnessed a major development in the form of a planned acquisition of US-based Gerber Technology by Lectra.The acquisition, when fully consummated, would allow the French technology giant to increase its market reach and also offer products embedded, imbibing all technologically advanced features which has been the highlight of both the companies. The synergy will also enable the company to bring out products specific to particular market and demographics that will enable its customers to boost the productivity and profitability of their operations. Team Apparel Resources talked with Daniel Harari, Chairman and Chief Executive Officer, Lectra as soon as the news was out to know his thought process on this acquisition, the way forward once it’s done and some obvious curious questions. Here are the excerpts.
About the Acquisition:
AR:Lectra has in the past few years been on an acquisition spree – first Italy-based Kubix Lab in 2018, then Belgium-based Retviews in 2019 and now US-based Gerber in 2021. What is the thought process and can we expect some more such strategic alliances in the future?
Daniel Harari:The acquisition project has not been finalised yet. We hope to receive clearance from the Federal Trade Commission in the US and a positive response from Lectra’s works council (its ‘Comité Social et Economique’) to move forward on this exciting project and close the deal at our next annual general meeting on 30 April. While this acquisition is a major landmark in Lectra’s growth, our desire to accelerate acquisition activities remains unchanged. Regarding additional acquisitions, our ambitions are ongoing and we hope to announce other good news soon. We are also accelerating the development of partnerships, like the one with Microsoft we recently announced. Our Industry 4.0 strategy is based on developing an ecosystem and having open solutions that can communicate with other software in the industry.
AR: What will be the value proposition for Lectra, Gerber and the entire fashion supply chain after this merger?
Daniel Harari: The acquisition will enable Lectra to expand its customer base and enhance our position in the fashion market in USA. We are certain that a union between Gerber Technology and Lectra will create significant and positive opportunities for all of our customers and business markets. Both companies have very similar DNA; by joining forces we can offer customers unparalleled research and development capacity, increased expertise and services and assistance delivered even closer than before, worldwide. Our customers will benefit from each company’s strengths, in particular from a broader ecosystem of technology and sales partners.
AR: Will Gerber Technology still be working and offering its solutions under its own brand name, while Lectra is the parent company of Gerber? Or, are there other plans/strategies planned?
Daniel Harari: The name of the combined company will be Lectra. However the Gerber Technology trademark will continue to exist via its products, equipment and software. Customer satisfaction and loyalty are at the heart of what we do, and we are committed to securing their investment in Gerber Technology and Lectra products. Once the acquisition project is finalised, we will work together on a joint roadmap and market plans.
AR: Post-acquisition, even if hardware technology of Lectra and Gerber operate as separate entities, the software product portfolio may need some consolidation (ideally duplicate product should go and complementary product should remain). How do you see the software product portfolio to look like post acquisition?
Daniel Harari: As our offers evolve,we will work to gradually unify our products. This will take several years, as we release new generations of products. We will take the time necessary to combine the best technology and expertise of both companies to ensure that our future offers deliver even more value to customers. In a nutshell, we want to expand our potential by finding synergies in the research and development capacities of both companies and by capitalising on current strengths.
About Operations in Asia:
AR: The approach to the business in Asia is very distinct for Lectra and Gerber. While Lectra has never been seen as to compromise on reducing prices to cater to any market, Gerber has used different strategies to gain access…What will be the strategy now?Will it be a hybrid model or a fresh approach?
Daniel Harari: As I mentioned, Gerber Technology and Lectra have very similar DNA. Gerber Technology has evolved significantly in recent years, as has its offer in a steady move upmarket to align itself with premium standards. The sales approach of both Lectra and Gerber Technology brands will be coherent with market practices.
In the journey of Industry 4.0 solutions which has been a hallmark of Lectra in the last few years, our objective is to harness the best practices and expertise of both entities and create the next generation of offers for Industry 4.0. In recent years, Gerber Technology has invested heavily in R&D to reach levels of investment similar to those of Lectra in the same area. More than ever, we aim to become an indispensable Industry 4.0 partner. With Gerber, we hope to prove that 1+1 =3 and more.
As far as Asia-Pacific is concerned, it is too soon to say how we will be structured in the region and any decisions made will be pragmatic and customer-focused. Once the acquisition is finalised, we will also work on bringing cost competitiveness and profitability, while ensuring that there are solutions for every level of the market, both in terms of budget and technology adoption.
AR: Being lean is the buzzword today…Between Lectra and Gerber, in Asian destinations there is currently a lot of manpower; will it be retained or can we expect some major shuffles? Will the strategy differ from market to market?
Daniel Harari: When I took over Lectra 30 years ago, I made it a priority to maintain jobs. This is why we decided in 2005 to keep our R&D and manufacturing in France and not to relocate to China, at a time when everyone in the industry was doing so. The future proved us right: we mobilised all of Lectra’s teams and safeguarded employment.
Likewise, in the wake of the economic crisis caused by the COVID-19 pandemic, we have not had recourse to layoffs or furlough schemes. Instead, we have implemented a policy to replace one of every two employees who leave the company, and will continue to do this as long as the economic context makes it necessary.Our position will remain the same for the two companies combined. The goal of this acquisition project is to join forces. With a larger customer base, we need everyone to ensure a continued presence for our customers worldwide.
I’ll conclude by saying that I am particularly proud of the 2020 results we recently released. More than numbers, they testify to the ongoing commitment of Lectra teams to support our customers in this unprecedented and equally difficult period.