Lee Chaden has seen his share of boom periods and tumultuous times during a diverse, 42-year career.
Chaden retired in December as executive chairman of the $4.5 billion Hanesbrands Inc., but he's not ready to focus his efforts on simply honing his golf score at a links community in Winston-Salem, N.C., where he lives with his wife of 39 years, Shelby. Chaden remains chairman of Hanesbrands and a key player behind the scenes in continuing to build a portfolio of megabrands with company executives, including chief executive officer Richard A. Noll.
Assessing the marketplace in an economic downturn, Chaden advised retail and industry executives to focus on innovation and basic products.
"Make sure you have a commitment to basics, whether it's socks, T-shirts or underwear, and stick with market leaders," he said. "When retail gets sluggish, the retail reaction is to reduce inventories. What I've seen during these inventory-conservation periods is some customers end up out of stock of core items.
"Basically, what we've been discussing with our retailers is our brands, and categories they should be putting their attention behind," Chaden said. "What really drives the categories is relevant product news supported by strong marketing, advertising and nontraditional ideas."
On the future of Hanesbrands, Chaden said, "We start from the position of terrific brands and leadership positions in categories. Our strategy is to communicate this to the outside world over the next three to five years. We have modest growth goals, 1 to 3 percent in sales and 6 to 8 percent in operating profits. We see the opportunity to get significant cost savings because we are highly leveraged. As we pay back debt and buy back stock, our internal expenses go down, and that's a very understandable model for the financial community."
Chaden, 65, a corporate executive with an entrepreneurial spirit, has had a range of posts in different industries.
His background includes transforming Lava soap and Top Job floor cleaner at Proctor & Gamble Co. into lifestyle products in 1966; developing interactive video games in 1979 at General Consumer Electronics, where he was a principal of the start-up funded by Marketing Corp. of America, and spinning the Wonderbra phenomenon in the U.S. in 1994 into a $100 million business within two years.During an interview at the Hanesbrands showrooms and offices in Manhattan, Chaden recalled how his love of different cultures, which he described as "wanderlust," ignited his career in the intimate apparel business. Those desires landed the South Bend, Ind.-born Chaden in the international lingerie field, where he was based in Paris and Rome, and later headed the Sara Lee Corp. Branded Apparel business in Asia and the Pacific Rim areas, including Australia.
"I just wanted to see the world," Chaden said. "My first job was at Proctor & Gamble as a staff assistant when Ivory soap still floated. I was a Beatles fan, had longish hair and wore wire-rimmed glasses, and my boss used to lovingly call me 'the rebel' because I'd gone to Berkeley. At that point, if you wanted to be in marketing, P&G was the place to be."
Over the years, he broadened his acumen by joining Playtex Products Inc.'s apparel division in 1970 as a senior product manager, and served in marketing and management positions for Playtex Italy, Playtex France and Playtex Canada, where he was president from 1974 to 1976. He was an area vice president of the international division and was promoted to vice president and general manager for Playtex's Family Products division from 1976 to 1977.
By 1970, Chaden's entry into the intimates field at Playtex, headed by former P&G executive Joel Smilow, opened up a new challenge: modernize the girdle business that was beginning to wane with the popularity of pantyhose.
"Pantyhose almost killed the girdle industry," he said.
Chaden remembered when he was based in Rome in 1971-72 and the Italian government, under the watchful eye of the Vatican, was strict about showing lingerie in advertisements.
"There were only two state-run TV channels at that time and they were strictly censored," he said. "We were not allowed to show bras or even a box with an image of a bra on TV, so we showed a curvy cross logo of the Playtex Cross Your Heart Bra and called it Encrocia Magico or Magic Cross.
"From there we went to Paris, where I was marketing director for Playtex and worked for a very wild Frenchman, Gael de LePin....We'd go to the local cafe every day for lunch, eat three- and four-course lunches, drink vin rouge, and he would smoke his Gauloise, drink coffee and play the pinball machines. Then he'd take me down to the office basement to play Ping-Pong. I just wanted to go home."Another highlight of Chaden's tenure in Paris in 1973-74 was a Playtex sales meeting in the French Alps.
"[LePin] said 'I don't think it would be fair to leave the entire marketing crew behind. I think we should take the entire administrative staff, too,'" Chaden recalled. "I was concerned because we were having a tough year and I was concerned that if New York [headquarters] called, they'd be told everybody was in the Alps having a great time. So he said, 'Let's take the receptionist with us, so if anybody calls, nobody will answer the phone.'"
Regarding living and working in Italy and France, Chaden said, "In Italy, I found the people very welcoming. I put a lot of energy to learn to speak Italian and lived in an old suburb. I never felt they resented that an American was working there. When the smoke clears, if you do a great job, nobody cares if you're an American. It took a little longer to become accepted in France. I made an effort to speak the language and to be respectful of their idiosyncrasies."
Invoking his entrepreneurial side, Chaden spent the Eighties in the video game and marketing services industries at MCA, where he was a partner and a principal of parent company General Consumer Electronics, which was later sold to Milton Bradley. He served as ceo of Interac Corp., an online financial services company. But after bumping into his old boss, Smilow, Chaden rejoined Playtex in spring 1991, when Sara Lee acquired the brand.
"From the time of the [Sara Lee] acquisition in 1991 to 1994, I was president of Playtex North America and ran the combined Playtex and Bali businesses," Chaden said. "Those were the fun years. Playtex was reinvigorated with the 18 Hour Comfort Strap Bra, which increased [annual] sales by 50 percent in two years. Playtex was challenged by department stores to come out with specialty products just for department stores. So we introduced Playtex Secrets. We thought it would be a light control bottoms business, but I kept hearing the bras were blowing out of the stores. I quickly realized it was going to be a big bra business and we supported it with major ad campaigns. In two years, it was a $100 million brand."Chaden noted that another "big hit" was Wonderbra.
"I got a call from a colleague in the U.K. who told me they had just launched Wonderbra in the U.K. with Kate Moss," Chaden recalled. "He said, 'They're blowing out of the stores.' And I said 'I think it's just a fad.' He called again and said, 'Lee, this thing is a social phenomenon,' and I said, 'There's something going on here.' We had success and failures, but I'd never seen such a cultural phenomenon."
In addition to Wonderbra, Hanesbrands' portfolio includes:
l Hanes, an underwear, daywear, bra, shapewear, casualwear and hosiery brand with estimated retail revenues of $2.3 billion.
l Playtex, with estimated sales of $1.1 billion in bras and shapers for hard-to-fit figures.
l Champion, a $1.5 billion collegiate branded activewear and casualwear brand.
l Bali, an estimated $700 million to $750 million full-support bra, panties and shapers brand.
l Barely There, a full-support and average-size bra, panties and shapers label with retail sales of about $200 million to $250 million.
l Just My Size, a full-figure underwear, daywear, casualwear, dress, coat and hosiery brand with estimated yearly retail sales of $1.3 billion.
l L'eggs hosiery, which generates annual estimated retail volume of $380 million.
Since its spin off, Hanesbrands has repaid $285 million in debt, contributed $96 million to its pension plans, which are now 97 percent funded, and repurchased $44 million in company stock. Hanesbrands has $2.3 billion of long-term debt and its debt leverage as measured by adjusted debt ratio to earnings before interest, taxes, depreciation and amortization and rent has decreased to a current 4.6 from 5.2 in 2007.
Chaden was named a vice president of Sara Lee in 1995 and became a senior vice president in 1998. He served as ceo of Sara Lee Branded Apparel Americas/Asia in 2004, until his appointment in 2006 as executive chairman of that division to help prepare the company for its spin off and initial public offering of Hanesbrands in September 2006.
He groomed executives such as Maurice Reznik, president of Maidenform Inc.; Helen McCluskey, president of the Intimate Apparel and Swimwear Group at Warnaco Group Inc., and Ray Nadeau, president of Vassarette at Fruit of the Loom."I realize that...I mentored the presidents of three of our biggest competitors," he said.
Reznik said of Chaden, "He's an amazing guy. His review processes were thorough and constructive. It was brutal, but it was all true and it made you so much better at your job."
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