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Modacad fashions e-biz service for designers

The company that makes software for clothing design plans to offer designers a direct line Web consumers.

Software company Modacad is helping fashion designers and manufacturers do an end-run around retailers with a two-pronged push into e-commerce.

Modacad, which makes design software used in the fashion industry, is offering an e-commerce service for designers who want to do business online directly with shoppers. For Joseph Agi, chief executive of For Joseph, outsourcing to Modacad meant he didn't have to hire specialists in Internet technologies. It also gives him a new channel to go directly to women who buy his clothing.

"We have lots of customers who are far from any retail area, and we think customers can be reached at a cheaper price than if we have to send them brochures and catalogs," said Agi, whose Web storefront has been up only a few days. His apparel sells through about 3,000 retailers worldwide, as well as five stores the company runs itself. For now, Internet orders can only be shipped within the United States.

Dominic Sbicca, president of family-owned footwear manufacturer Sbicca, believes that most of his teenage customers are already online.

"It's what the younger generation is learning to do as a matter of normal course of life, like brushing their teeth," said Sbicca. "It's the reality of the future generation, so certainly it's a good idea to start at the beginning."

Other designers using Modacad's service include Nicole Miller, Bisou-Bisou, and BeGolf.

But Modacad doesn't enable its customers to begin selling online. It's also hoping to push customers to them through StyleClick, a fashion search engine and comparison shopping service.

"It may play well with manufacturers who are looking for opportunities to sell directly," said Ken Cassar, e-commerce analyst with Jupiter Communications. "Modacad is providing them with a means to do that without developing any retail expertise."

Forrester Research estimates that last year apparel was the fourth-most-popular retail category online, after computer hardware, software and books. It estimates $530 million of apparel was sold online last year.

The research firm expects apparel to overtake software and books this year, growing to $1.34 billion on its way to $13.5 billion in the year 2003.

Modacad president Maurizio Vecchione said his e-commerce outsourcing business has three components. Its core computer-assisted design (CAD) software enables Modacad to easily collect images for online catalogs, and it has partnered with a logistics firm to ship purchases directly to individual consumers, something fashion designers and clothing manufacturers are ill-equipped to do.

"Eighty percent of manufacturers can't fulfill to consumers," said Vecchione, noting that they're accustomed shipping large lots to retailers but don't have the systems or expertise to put together individual orders.

"We actually go out to get consumers, and we are doing it effectively as the online agent of these manufacturers," Vecchione said. "We take a piece of transactions, so manufacturers have no up-front capital costs. We become the enabler."

StyleClick, the consumer portal, is key to Modacad's strategy.

"A lot of portals are looking at apparel as a key opportunity to develop," Vecchione said, hinting that a co-branded version of StyleClick may show up on portal sites later this year.

But Cassar says Modacad's model doesn't differ greatly that of online retailers, except that it takes a percentage of the transaction rather than buying merchandise and then reselling it.

"For the run-of-the-mill consumer, you're not going to be aware that there's any difference between StyleClick and Macy's," he said.

But the StyleClick search engine includes apparel from even those online retailers who don't use Modacad's e-commerce service.

So far, apparel vendors that have found the most success online are mail-order merchants such as Lands' End, Eddie Bauer, L.L. Bean. The Gap is one of the few brick-and-mortar retailers with a major Internet presence.

Modacad will enable higher-end retailers, who have a limited number of stores in major cities, to reach a wider consumer base.

"Some of the best-selling brands online are really high-end brands--the labels you could find in New York City or Los Angeles or San Francisco, but haven't built out national distribution," he said. "Most Mid-western consumers can't find them in the local malls."