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Byline: RAMA RAMASWAMI

WE ADMIT IT: The Web site of eFashion Solutions LLC may look a little too pretty for hard-core techies. Once you download the required Macromedia Flash Player, your first impression is of color - a lot of pink and black, punched up with zippy music that you rarely hear on a business-to-business site. The navbar, done up to look like a garment price tag, dreamily drifts down from the top. Category titles float across the screen, much like movie credits. High-fashion illustrations leap at you, then dissolve and fade in unexpected ways. For a site that offers a variety of services, there isn't much promotional material of any kind; all information about the company and its founders is downplayed, and it's hard to understand what the business is about until you get past several screens.

But we also admit it: Behind that facade lies something totally inventive in the world of retail. On the face of it, what eFashion Solutions does seems simple. It manages the online operations of several major branded or licensed fashion apparel manufacturers, including XOXO, Baby Phat, JLO by Jennifer Lopez, OP, and Rockawear. The services EFS offers - Web site design, e-commerce technology, fulfillment, order processing, shipping - aren't much different from those of its competitors in the third-party fulfillment business. What's different is that EFS uses a single platform to manage all those components of e-commerce. What's also different, and perhaps more remarkable, is that the founders created and built that platform themselves.

EFS is the brainchild of Ed Foy, a Brick, NJ-based entrepreneur whose experience in fashion retailing includes stints at Macy's and Calvin Klein Inc. After a brief foray into an online venture that didn't survive the dot-com bust, Foy, along with his wife, Jennifer, started EFS in 2000. This time, profitability came quickly - the company now employs 110 people, represents 15 online properties (with another ten slated to sign on by the first quarter of 2005), and expects to earn over $25 million this year and $40 million in 2005.

To hear Foy tell it, most of that success is the result of his unique, centralized information system. His 71,000-sq.-ft. facility, he says, is an "e-commerce center, almost a city, that concentrates on all the components of e-commerce." Most retail technologies today are isolated, he adds; a company can buy software for e-commerce, reverse logistics, inventory control, or reporting, but can't find a single application that does it all in an efficient and cost-effective manner. In eight years of searching, Foy discovered that every e-commerce system he looked at was missing something. "The fulfillment system, you could tell, was built by somebody who had worked in a fulfillment center, but was never in the front end of the business, never sold jeans at Calvin Klein, never engaged in direct-to-consumer relationships on the Web site," he says. "You look at the order processing and reporting systems that came from another vendor, and you could tell that they were never in the fulfillment side of the business." Foy couldn't find a holistic platform that could take a product all the way from merchandising and marketing to shipping, returns, and real-time transaction analysis.

So, he says, he built one. The goal was to design a system that brought together all of the elements that were missing in the other applications he'd seen: "It's like going to a restaurant and you hear about this great dish, you sit down, you taste it, it's good, but it's just missing a little something - maybe a little garlic, a little butter, a little salt and pepper. And that's what we did, we put that ingredient into the system, into the technology, that everybody else was just missing."

Foy also did something else that few retailers were doing five years ago - he programmed the entire system in open source code. He really had no other choice, in his view, given his plan to handle multiple Web sites and the tight budgets of his potential customers. "My knowledge of the fashion industry is that when it comes to technology, they don't spend money," he says. "So the last thing I could have done is gone out there and paid [for a] Microsoft product and certified this and that and pay thirty to forty grand for every server I plugged in for every Web site that I service, because the clients I'm going after are not going to pay that. So five years ago, we really went hard after open source, and everyone thought we were crazy. We built this platform of Linux, Unix, PHP, and the open source community, and I think that's what makes us unique. We're transacting $25 million to $30 million in business - an average transaction for us is $50. We were told that open source could never handle that many line items. And we've proved them wrong." Even the creators of the PHP programming language, Foy says, were surprised that EFS was able to power several high-end Web sites with six million unique visitors a month.

Foy's innovations baffled a conservative industry that hadn't seen much other than conventional order processing applications running on an AS400 or similar system. In the late 1990s, most attempts at Web commerce were based on patchwork programs slapped onto legacy systems, and few vendors were developing applications that addressed e-commerce from the ground up. Foy's went several steps further.

Not only was his platform built for online transactions; it was also an end-to-end system that provided total visibility into them. Many retailers and parcel carriers now offer this kind of visibility, but when the Foys approached UPS officials five years ago, they were speaking a language UPS didn't understand. "We sat down with UPS," Ed Foy recalls, "and we said, 'It's too labor-intensive to use WorldShip and type in your invoice numbers and download them to an ODB connection, FTP, or whatever. This is too costly, and I cannot get my business to the next level. We need to build real-time tools that use the Web, that communicate with your servers, that generate a label, that generate the manifest, that generate your billing, and that direct the whole billing process by package.' And they looked at us like, 'Whoa, back up, what are you talking about?'"

The problem, as Foy outlined it to UPS, was that the only way eFashion Solutions could grow rapidly without adding costs was by harnessing the power and potential of the Web. He was able to persuade UPS to give his company access to UPS's online tools - such as they were at the time - so they could be used to set up a Web-based shipping manifest with the carrier. EFS clients would gain remote access and could log in and see how many packages they were shipping each day. The deal, Foy says, was one of the first of its kind.

The shipping alliance with UPS, coupled with his proprietary system, gave Foy an unprecedented look into the workings of an online business. No longer was he chained to apparel retailers' traditional method of operation - pulling information from a plethora of systems and trying to make sense of it all. Foy's application factored in all aspects of the business, from planning to customer service to feedback and surveys, and generated reports that provide a picture of the entire operation in real time. That enabled him to react to business demands almost instantly, an essential capability for his operation.

"We're in the business of very quick-turning merchandise," he says. "Every two weeks every one of my clients sends product that's digitized, it's photographed, it's live in 48 hours. Every two weeks, it's 'OK, here it comes again!'"

Foy needs that swift turnaround because he stocks very small quantities of merchandise. EFS maintains, on average, nine items per SKU; during the back-to-school and holiday seasons, that number goes up to 15-30. (By comparison, Land's End may carry 3,000-4,000 parts per SKU.) The roughly $25 million that EFS earns in annual sales has to come from those minuscule SKU quantities - and the only way to achieve that is to keep the inventory moving at breakneck speed.