NEW YORK — Despite the intense competition in the $14.5 billion intimate apparel sector, the acquisition of Maidenform Inc. by a private equity firm is being lauded as a positive industry move by manufacturers and retailers.
Many like the fact that Maidenform, the 82-year-old grande dame of the bra business that’s projected to generate wholesale revenues in excess of $300 million this year, will remain an independent, privately held company. As reported, Ares Corporate Opportunities Fund, a $4.5 billion firm, acquired Maidenform this month for an estimated $215 million from Oaktree Capital Management and other shareholders.
The move by Maidenform to remain independent further underscores a main point of contention in the branding community: Maidenform, a household name that was the sixth most-recognized innerwear name in the Fairchild 100 brand survey published in 2003, will not be absorbed into a sprawling portfolio of brands at a public corporation. Instead, it will retain its brand identity and image.
Maidenform has been on the selling block since 1997, when apparel giant VF Corp. signed a letter of intent to buy it, changed its mind, and later rekindled a short-lived courtship in 2003. Kellwood Co. reportedly made a play for Maidenform in 2002. Most recently, the deal with Ares capped an auction run by UBS Securities LLC. BNP Paribas will lead the debt financing for the buyout.
David Kaplan, a partner at Los Angeles-based Ares, said, “As an independent company, there’s a lot of esprit de corps at Maidenform. That will continue, and it’s our goal to enhance that.”
Tom Ward, Maidenform’s president and chief executive officer, said, “I think Ares’ management is going to be very supportive. One of the great things will be the benefits for our people at Maidenform. It will add a lot of stability and erase a lot of issues and rumors over the past few years. We’re not for sale anymore, and there are no longer the ‘what ifs.’
“Everybody I’ve talked to is very positive. It shows we’ve been able to solidify our operating results and have been able to attract that preferred acquisition category. This will also be the first time we will have a contained ad campaign, and we’ll be able to advertise with more frequency on a consistent basis.”He added that Maidenform advertised in 14 publications in November, and said plans are in the works to “increase that” in fall 2004. Maidenform is known for its signature “I Dreamed…” ad campaign, which in its heyday in the mid-Nineties had an annual budget of more than $6 million.
Key segments targeted for growth in market share and media exposure include Special Moments by Maidenform, a special-occasion line of bras and coordinating panties; One Fabulous Body by Flexees, contemporary shapewear aimed at younger consumers, and Maidenform Full Support, a line of full-figure bras described as a “huge initiative” for the company.
“We’ll be forming new businesses sequentially across the board,” said Ward, noting that niche segments such as teen bras produced under license by Delta USA have been strong.
Maurice Reznik, president of the Maidenform brand, said the company plans to expand internationally, primarily in Canada and the U.K., and is “looking at licensing opportunities.”
“We’re also doing some informal dialogue on potential acquisitions for the better market,” said Reznik. “We feel there is a big opportunity for our company to go after the better business at major department and specialty stores.”
From a retailer’s perspective, Linda LoRe, president and ceo of Frederick’s of Hollywood, said, “Anytime a company can get cash infusion is great, and Maidenform has a lot going for them. I would have hated to see another intimate apparel company struggle the way so many have. I’m glad they got purchased and are able to stay solvent.”
“I think this is a good thing,” said Donna Wolff, divisional merchandise manager of intimate apparel and hosiery at Bloomingdale’s. “The acquisition will give Maidenform much-needed funding to maximize their business. Now, they can get on with their daily business.
“For me as a retailer, the acquisition will help deliveries, shipping in-stock, new product, and allow them to buy better fabrics and put out the best product they can. They won’t be preoccupied with staying in business.”
Jack Clor, foundations buyer at Milwaukee-based Carson Pirie Scott, characterized his Maidenform business as “excellent.” He singled out a specialty bra by Maidenform called One Fabulous Fit Sexy as “doing very well.”“This will infuse more money into the brand. The industry can’t afford any more shrinkages of intimate apparel vendors,” said Clor, noting that deliveries have “gotten healthier over the past few months.” However, he said, deliveries of Maidenform’s Flexees shapewear brand were “still struggling.”
Comments from peers in the intimate apparel industry about the Maidenform purchase were generally enthusiastic.
“I think it’s healthy for the industry,” said Tom Wyatt, president and ceo of the Intimate Apparel Division at The Warnaco Group. “I’m happy for them, because through hard work they created value and a stronger and more profitable business. They remained independent and strong as a separate and distinctive entity, rather than becoming consolidated into another group.”
James Mogan, president of Kellwood Co.’s intimate apparel businesses and a 29-year veteran of Maidenform before that, said, “This gives them closure. They were apprehensive, and so was the marketplace. It adds stability.”
Richard Murray, president of Wacoal America, said, “It’s good to see more than a couple of major players in the industry. The purchase by a venture capital group indicates they made a lot of progress and will be successful as a stand-alone company.”
John Bowman, president of Dana-Co., producer of the licensed Natori Black Label and Natori White Label foundations lines, said, “Keeping brand identity, especially from a retailer’s point of view, is important. It gets difficult for consumers to see the differentiation of product. I for one would like to see companies stay intact.”
Josie Natori, president and ceo of Natori Co., said, “This is good for everybody, and competition is healthy for the industry.”
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