Online Lingerie Seller Claims JDA Software Didn't Provide Even the Bare Necessities
Mergers and acquisitions can have an impact on deals based on product road maps, analyst says
Fri, December 13, 2013
IDG News Service (Boston Bureau) — JDA has been hit with a lawsuit from online lingerie and underwear seller Andra Group, which claims its business suffered millions in damages after a new e-commerce system wasn't delivered as promised.
Andra Group has more than US$40 million in revenue and was founded in 1998, according to the suit filed Thursday in U.S. District Court for the District of Arizona. It has no retail locations, depending instead entirely on its website.
Due to rapid growth, in 2011 Andra began looking for a new website and back-end system, and after evaluating a number of vendors, settled on RedPrairie, which merged with JDA in November 2012.
RedPrairie's marketing indicated it could provide a "standard online retail platform that could be highly customized to Andra Group's needs," according to the suit. In addition, RedPrairie presented itself as having done hundreds of migrations from platforms customers already had, the suit adds.
Andra Group allowed RedPrairie to examine its existing system to figure out what customizations would be needed. RedPrairie promised it could deliver a satisfactory substitute by way of two RedPrairie applications, one of which it had acquired in 2011, according to the suit.
Andra Group signed a number of license agreements with RedPrairie in March 2012 based on the company's promises, but "these representations were false," according to the suit.
RedPrairie had "no basis" for making such statements, as it had not fleshed out its middleware technology adequately, and also had "insufficient familiarity" with the way the applications had to interact with each other.
RedPrairie also told Andra Group it would go live on the system sometime in February of this year, according to the suit. Based on this, Andra Group agreed to place its existing system in "lockdown" status during the transition, with no changes able to be made, according to the suit.
A locked-down website can be "highly damaging" to a retailer, given it can "become dated and lose competitiveness with even a short passage of time," the suit states.
RedPrairie continued to "knowingly and/or recklessly" give Andra Group "rosy project status reports" between June 2012 and Feb. 22 of this year.
Three different project managers were assigned within six months, and as managers were terminated their replacements blamed their predecessors for problems, according to the suit. The go-live date was ultimately delayed until late March.
After the merger with RedPrairie closed and JDA staffers became involved, "it became clear that the transition and integration plan proposed by RedPrairie would not be successful and would not meet Andra Group's requirements," the suit states. "It further became clear that RedPrairie did not have the expertise or proper software solutions to provide a seamless platform for Andra Group's website and back office functions, and, in fact, never had that capability."