By  on December 13, 2010

The Carole Hochman Design Group is marking its 80th anniversary this year in a big way.

The firm has been acquired by The Komar Co., making Komar the largest independent innerwear firm in the U.S., with annual wholesale revenues of $500 million.

The Hochman firm, which generates annual wholesale revenues of $150 million to $200 million, was run by chief executive officer Neal Hochman, his former wife, Carole Hochman, chairman and design director and president Seth Morris. Neal Hochman is retiring but Carole Hochman and Morris are staying on.

Despite the challenges of recent years, Neal Hochman said the firm has maintained its position with a portfolio of company-owned best-selling brands. Those include OnGossamer intimates, Carole Hochman, Carole Hochman Midnight and Stan Herman sleepwear and at-homewear names. It also has eight sleepwear, daywear and loungewear licenses: Lauren Ralph Lauren, Oscar de la Renta, Betsey Johnson Intimates, Esprit, Jockey International, Gloria Vanderbilt, Lilly Pulitzer and Nine & Co. The company produces sleepwear by Chaps for Kohl’s and American Living for J.C. Penney, and made its first licensing foray into men’s sleepwear and loungewear with Tommy Bahama last summer.

Neal Hochman spoke with WWD about changes in the innerwear industry and retailing that he has seen during his long career.

WWD: What was the innerwear industry more than 50 years ago?
Neal Hochman:
There were over 100 [independent] companies in New York. Now there’s a handful [of private companies]. The beauty of that was every company on Madison Avenue had a designer. Some had associate designers. The designers would move from one company to another, and they basically had a practical school out there. Getting young talent today is extremely difficult. Young designers know how to design on a computer, but they don’t know how to cut and drape a garment or create a pattern...there’s a real shortage of mentors and design apprentices today.

WWD: How was the vendor relationship with retailers compared to today?
N.H.:
There is absolutely no resemblance today to what the industry was like 55 years ago. There were no national retail chains like Macy’s, Nordstrom or Dillard’s. There were at least 100 local or regional stores that don’t exist today, like Gimbels, Ohrbach’s, B. Altman, Best & Co., A&S, Tailored Woman and Peck and Peck, and each city had its own department stores. There also were a lot of buying offices, because trade shows like the Curve fair did not exist then, and regional salesmen and buyers were in their positions for a long time, a 30-year spread. It was a very personal relationship...you got to know the buyers very well at dinners, weddings and bar mitzvahs.

WWD: How was business conducted with merchants?
N.H.:
Stores didn’t have computers or barcodes…Retailers knew their customer inside out and were very much into the fashion of the garment. Today they’re only into the numbers. Before you only had to deal with the buyer. Now you have to deal with the buyer, the dmm, the gmm, the merchandise manager, and the financial planners because they have budgets...they are tough people. There are now only several major retail groups in the U.S.: Macy’s, Nordstrom, Dillard’s, Belk, as well as Neiman Marcus, Saks and Bloomingdale’s.

WWD: Give an example of how your company has survived a recession.
N.H.:
The [company’s] value was about $18.5 million in 1980, and in ’89 volume hit $49 million. But the wheels fell off the bus in 1990 [the 1990-1991 recession], and by ’93 it was down to $24 million because of the recession. We had 105 employees and three-and-a-half [showroom] floors, and a factory in Puerto Rico with 150 people. We literally reinvented the whole business and cut our expenses more than our revenues fell. At that point, we were down to one floor and 31 employees and no factory in Puerto Rico, and we began manufacturing overseas completely. It was a scary, tough and painful time, like having too many people in a lifeboat. If you don’t throw someone off, you sink. But during that time, Carole created printed cotton knits from Turkey, which turned out to be a huge success. And Seth Morris joined the company and took our business to a whole new set of stores, mass merchants.

WWD: What’s your main gripe with business today?
N.H.:
Pressure for margin. When I started, initial markup was 40 percent. Today retailers are looking for 56 percent, and some now want 62 percent. Private label goods are as high as 70 percent. Retailers set targets for us. If stores want an imu [initial markup] of 56 percent, I can’t move the margin.

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