NEW YORK — Wolford’s becoming more hands-on in the legs business.
This story first appeared in the November 4, 2002 issue of WWD. Subscribe Today.
And, while the Bregenz, Austria-based company is going through some structural changes, international marketing and sales director Roberto Geronzi says it is standing firm in the U.S.
On a recent visit to New York, Geronzi categorically denied market reports that the company was scaling back its U.S. operation because of weakness in the legwear category.
As reported in WWD, Karen Schneider, president and chief executive officer of Wolford America, stepped down last month, and the firm eliminated that position.
“We are trying to clean up that level of management,” Geronzi said, claiming that the development was a result of Wolford’s new strategy: The Austrian parent plans to take a more hands-on approach, controlling global sales and marketing in direct communication with regional sales, retail and marketing executives, rather than presidents overseeing each division.
Worldwide, Wolford operates 11 sister firms, and Geronzi noted that each is undergoing similar structural changes.
“We felt the need to be more hands-on,” he said. “Our company continues to be dedicated to the market, but we now have a slimmer structure. We want to make sure we are prepared for the future.”
Schneider, who headed Wolford’s American division for five years, oversaw the transformation of the company’s retail business from nine partnered boutiques to 25 company-owned stores in the U.S. Her responsibilities are shared by Kevin O’ Boyle, vice president of finance and operation; Maria Basquil, national sales manager, and Jennifer Puckett, director of retail stores.
“We are facing the same problems every other luxury company is facing,” Geronzi said. “The value of shares is plummeting, and it’s better to cut costs where you can.
“We wanted to make [the operation] slimmer,” he continued, “more individual, and more strongly dedicated to sales and marketing.”
The company’s most recent results for the fiscal year ended April 30 registered a net loss of $4.95 million. All figures are converted from the euro at current exchange rates. Full-year sales dropped 4 percent to $137.2 million, compared with $143.4 million in the prior year.
In July, Wolford said it slashed costs, cutting its head count over the last year by about 10 percent to 1,693 workers, compared with 1,892 workers at the same time last year. In the U.S., Wolford wholesales to 311 specialty and department stores, including Saks Fifth Avenue, Neiman Marcus, Bergdorf Goodman and Jeffrey New York. The company recently closed its unit in Palo Alto, Calif., but it is opening an 1,800-square-foot unit nearby at the new Santana Row mall in San Jose, Calif., on Thursday. At the moment, the company has no additional store-opening plans.
Geronzi said the U.S. represents about 12 percent of Wolford’s total business, which would give the operation here a volume of about $16.4 million. Total American legwear sales are about $3 billion.
Basquil pointed out, “We see growth in multibrand specialty stores rather than department stores. There’s at least another 200 doors we can be in. Since space is becoming smaller and moving off of prime locations [in department stores], it’s become more difficult. We are fighting to keep the same space, but it is difficult to keep the growth.”
But, she added, “the legwear business is doing well. I am 22 percent ahead of last year, and we anticipate a 15.6 percent increase by the end of our year on April 30.”
This month, the company plans to launch two collections specific to the sport and bridal market, with deliveries planned for late March. The company would not disclose further details on these lines.
For fall, the company teamed with Vivienne Westwood to design a six-piece collection of hosiery and knitwear. Featuring a pink, yellow or black argyle motif, Geronzi said the collaboration is continuing through spring. Also expected to top spring selling are fashion looks like the “Boogie” tights with a thin, striped pattern down the leg.
“There is really no competition for Wolford,” said Anne Caetano, divisional merchandise manager for intimate apparel and hosiery at Saks Fifth Avenue. “They have done a tremendous job with marketing, and that is key. They launch revolutionary fabrics, they have new ideas. Wolford has such a loyal customer, which gives them an edge in legwear.”
Fashion legwear — novelty colors, prints and textures for tights — accounts for about 35 percent of total legwear sales, and Geronzi said Wolford is aiming to increase that business in the future.
“With basics in legwear, a lot of the production now comes from China, Turkey and Israel,” he said. “They have good quality at a low price. We suffer in basics…so we want to diversify [with fashion]. We are obliged to go ahead.”