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Maidenform Details Growth Strategy

Maidenform Brands Inc. is on a roll with a successful initial public offering under its belt.

NEW YORK — Maidenform Brands Inc. is on a roll with a successful initial public offering under its belt.

The $337 million bra company, having gone public July 22 and now trading on the New York Stock Exchange, is now focusing on a multimillion-dollar advertising campaign for it’s latest brand, The Dream Bra, and loads of innovative product in shapewear and full-figure bras. The 83-year-old company also is expanding its presence in mass channels with brands such as Self Expressions and Rendezvous, and is making a big push into the international marketplace, a line of business Maidenform executives call a “huge opportunity.”

In an interview at the Maidenform offices here, Thomas J. Ward, chief executive officer and vice chairman, said strong brand equity, an established solid growth platform and sourcing with selective partners to maximize efficiency and flexibility were among the factors that made the IPO possible. The Bayonne, N.J.-based company, which was acquired by Ares Corporate Opportunities Fund in 2004, completed its strategic repositioning as a marketer, rather than as a manufacturer, in 2002, when it opened an office in Hong Kong and closed five manufacturing facilities: two each in Mexico and the Dominican Republic and one in Jacksonville, Fla. All sourcing and production is now conducted in China, Indonesia, Thailand and Sri Lanka.

At a time when a number of companies are struggling to survive in a sluggish retail climate, Maidenform had quietly planned a strategy that earned the respect of the financial community in an IPO that was increased to almost 12.8 million shares from 10 million shares. The IPO raised at least $217 million. It was initially priced at $17 a share, higher than the expected price of between $14 and $16 a share.

“Among the key points that set our strategic business plan into motion was an increased investment in the marketing of our products,” Ward said. “Everything had to mirror the image we wanted to convey, whether it was point-of-sale materials, hangtags, ads or the environment at stores. We also expanded research and development, and the design and production areas, and we looked at everything on a global basis by sending our people shopping in Europe as well as Asia.”

He added that international business has expanded “dramatically” over the past three years, accounting for 6 percent of annual revenues.

Dorvin D. Lively, executive vice president and chief financial officer, said, “International growth has been significant. Year-to-date, in the first six months of ’05, it’s up 53.9 percent.”

Maurice S. Reznik, president of Maidenform, said the company’s approach to international business has been to provide a consistent product and ad campaign that reflects a cohesive image. That message comes across in product franchises including One fabulous Fit and The Dream Bra by Maidenform, as well as shapewear by Flexees and full-figure and minimizer bras by Lilyette.

“We sell the same bra style worldwide,” said Reznik. “Our international business has been very strong in Russia and we are planning simultaneous launches of The Dream Bra in the U.K and Canada, which have been extremely strong markets for us. Whether it’s Tel Aviv, London, Toronto or Moscow, there will be a 60-day promotional window beginning in October, with seminars, print and outdoor advertising and point-of-sale materials.”

Regarding product innovation, Manette Scheininger, senior vice president of merchandising and design, said: “Product innovation is the key to what we are all about. Our mantra is consumer-friendly technology. It has to be easy to understand, but it also has to be comfortable.”

Key examples include multiple elastic treatments for bra strap adjustments in a group for spring 2006 called Endless Options and “flex-to-fit” stretch release panels on full-figure bras.

Addressing media strategy, Liz Morris, vice president of marketing, said an “aggressive” multimillion-dollar ad campaign is being planned for The Dream Bra.

“We’ll have preprinted inserts with heavily coated stock similar to ads for fragrance in November magazines, including Vanity Fair,” said Morris. “On Sept. 16, Macy’s Herald Square will be installing a [soft] Dream Shop, and we’ll have a billboard at Seventh Avenue and 36th Street. We’ll also be doing a full-page ad in The New York Times Sept. 18, as well as full-page ads in seven major regional markets.”