SAS Acquires Marketmax

CARY, N.C. (Oct. 8, 2003) – SAS, the leader in business intelligence, today announced the acquisition of Marketmax, the leading provider of advanced retail planning and merchandise intelligence software with a customer base that includes The Home Depot, Lowe’s and Marks & Spencer plc. With this acquisition, SAS adds Marketmax’s complete suite of integrated Retail Merchandise Planning applications and its team of retail industry experts to SAS’ robust set of retail business intelligence offerings and expertise. The acquisition accelerates an aggressive strategy by SAS to become the world leader in retail intelligence applications that meet the analytic, planning, forecasting and optimization needs of this dynamic industry. Retailers and their suppliers can now make smarter merchandising decisions and maximize customer satisfaction - and their own profitability - by ensuring that they have the right merchandise to meet current demands.

This move is a clear demonstration of SAS’ commitment to the retail industry. An industry-focused approach to sales, marketing and research and development has been the long-term vision of SAS President and CEO Jim Goodnight, who believes that business intelligence is not just about providing tools, but also about providing solutions that meet the needs of very specific industries. To support this belief SAS has recently verticalized its offerings for the financial services and life sciences industries. The retail industry was a natural choice as SAS’ next industry vertical since the company has 27 years of experience serving retailers, such as Wal-Mart, Amazon.com, The Limited, RONA and Casino, through its data management and analytical software.

SAS has identified significant, global growth opportunity in the retail sector. Competition among retailers is fierce. To compete successfully, retailers are trying new formats, store sizes, product assortments and shopper services. Both SAS and Marketmax heard from their retail customers the need for a single, stable source of retail planning and optimization.

"The combination of SAS business intelligence, forecasting and retail optimization with Marketmax's merchandise planning and analytics is an intriguing mix that seems to have tremendous potential. Retailers have long looked for a single, reliable data source for their planning and optimization needs," said Steve Stone, senior vice president & CIO of Lowe's. "We have strong longstanding relationships with both companies. We believe that the combined power of both companies should create a very compelling proposition for the retail planning and intelligence market."

"The marriage of customer intelligence and merchandise planning is where the retail world is headed.

1-800-FLOWERS.COM had such a challenge to find a single, platform-agnostic, end-to-end suite that would work in all three channels - store, catalog and Internet - that we had to put the brakes on our plans for this," said Chris McCann, president of 1-800-FLOWERS.COM. "The combination of SAS customer intelligence analytics with Marketmax's integrated merchandise planning solution is timely in an industry where the customer is king. The more the customer is in control the more we will need technology like this to help meet our customers’ needs and enhance our profitability."

"Retailers are always looking for ways to create better assortments to make sure they have the right items in the right stores. Analytical tools have stepped in to help retailers by analyzing customer and sales trends. However, the real hurdle has been taking this insight and turning it into real action - like a better forecast in a merchant's hands or a better assortment in front of a customer. Technologies that help close the gap between insight and real business action will be highly sought after by retailers," said Hung LeHong, Research Director, Gartner.

The Marketmax transaction is the sixth acquisition by SAS since 2000. It reflects SAS’ acquisition strategy of enhancing its existing capabilities with market-leading intellectual property and domain expertise in a focused, prioritized fashion, rather than simply buying market share.

"Lori Schafer and her team essentially created this strategic approach to advanced retail planning and optimization solutions for the world’s leading retailers and suppliers. We believe the addition of Marketmax to SAS’ retail offerings will dramatically change the landscape of the retail software market. No other vendor can provide the integration and depth of pure retail-focused analytics, forecasting, planning and optimization, or the breadth of offerings across customer intelligence, operations intelligence, merchandise intelligence, and retail enterprise intelligence that will result from this acquisition. Retailers and consumer goods suppliers selecting SAS will continue to realize significant competitive advantage," said Goodnight.

Marketmax has been a pioneer in applying technology to help retailers financially plan, optimize assortments and maximize return on their inventory investment. Marketmax helps retailers and their suppliers plan and tailor merchandise assortments and optimize in-store visual merchandising and inventory. For example, retailers, who typically respond to over stocked back rooms with more promotions and deeper discounts can synchronize the planning process with Marketmax solutions. Retailers can provide their customers with products they want, when they want them. The goal is to maximize revenues by reducing stock-outs and markdowns. SAS’ core competence in customer insight, analytics, forecasting, and optimization will be integrated with the Marketmax technologies to provide retailers with the ability to link merchandise planning and processes to customer-insight-based demand forecasts, significantly improving inventory productivity and overall profitability.

"Retailers are increasingly pursuing sophisticated software that integrates merchandising, planning, optimization and business intelligence," said Marketmax president and CEO Lori J. Schafer. "The combination of SAS, the worldwide leader in business intelligence software and Marketmax, with its fully integrated merchandise planning software and best-in-class retail domain expertise will provide both product and service unmatched in this industry. Additionally, our corporate cultures are similar, as is the way both SAS and Marketmax approach customers as long-term business partners. SAS offers a clear win-win scenario for our customers and employees. SAS’ size, financial strength, and geographic reach provide Marketmax with the ability to extend its functionality, its market penetration and its brand."

SAS will establish a Marketmax division which will operate from the current Marketmax headquarters in Wakefield, Mass. This new division will leverage Marketmax’s general operations, the Marketmax brand, retail expertise, and the Marketmax product names. All of these were acquired from Marketmax, Inc, whose investors include TH Lee Putnam Investors, CEO Lori J. Schafer, and others. Marketmax UK employees will become SAS employees and report to Phil Bond, managing director of SAS UK.

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