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Q&A: Maurice Reznik, Maidenform CEO

Executive says he's more positive about the business outlook this year, but economic turbulence took its toll last year.

Maurice Reznik, chief executive officer of $600 million Maidenform Brands Inc., literally knows the $7.2 billion innerwear industry inside and out.

Reznik, an innerwear veteran with more than 30 years’ experience, joined Maidenform in April 1998 as president. He had served as president of the Warner’s division of The Warnaco Group from March 1994 to August 1997. He joined Warnaco in January 1994 as senior vice president of sales.

He took over the top job at Maidenform in July 2008, steering the 90-year-old bra specialist through a difficult recession by building and maintaining the global Maidenform brand carried in 60 countries, growing the direct-to-consumeer business and leveraging an international platform that represents approximately 9 percent of total revenues. Throughout his ceo tenure, Reznik said the company has delivered year-end 2008 through 2010 compounded net sales growth of 16 percent, which includes shapewear sales growth of 21 percent, as well as 20 percent sales gains in mass channels. The company expects total sales growth in the range of 8 percent for the full year 2011 per the November fourth-quarter guidance.

Reznik says he’s more positive about the business outlook this year, but the economic turbulence created by job losses, unemployment and a credit crunch took its toll.

In the most recent reported quarter ended Oct. 1, Maidenform’s net income was $10.2 million, or 44 cents a diluted share, from $12.8 million, or 55 cents, last year. Sales inched up 1.7 percent to $148.2 million from $145.8 million. For the nine months, income fell 5.9 percent to $36.3 million, or $1.55 a diluted share, from $38.6 million, or $1.65, last year. Sales increased 10 percent to $481.8 million from $438.1 million.

At the time, Reznik said the earnings performance was “below our expectations.” He added that the quarter was impacted by several factors, including a decline in consumer traffic and higher costs to promote and liquidate overstocks.

Reznik said he had expected these conditions to persist in the fourth quarter and the company instituted several initiatives to increase sales, expand gross margins and control spending.

In addition to Maidenform, the company’s portfolio of brands includes Lilyette; Sweet Nothings; Rendezvous; Flexees; Subtract; Bodymates; Self Expressions, Luleh, which is an exclusive brand for Macy’s, and private label. The company also produces and distributes the licensed Donna Karan Intimates and DKNY Underwear brands for which international distribution has grown from five countries in 2009 to 26 in 2011.

Here, Reznik shares his thoughts on where innerwear business is headed this year.

WWD: Where do you see the intimate apparel industry going in 2012?
Maurice Reznik:
I anticipate a continuation of the current environment with modest growth and moderate raw material increases in the first half, with potentially higher costs in the second half.

WWD: How important are brands in a tough economy?
M.R.:
Research shows that consumers do still spend in hard times, they are just more discriminating. Brands that market themselves consistently and maintain their promises to the customer fare best and gain share during recovery periods. Maidenform is a 90-year-old iconic brand that has earned the respect and trust of consumers.…We have also learned that consumers will spend on innovation and technology. Brands and products that make their lives easier — think Apple. That said, Maidenform invents and innovates every day — from the first up-lift bra to the adjustable strap to the two-way stretch foam cup, to our latest launches of shapewear that reduces the appearance of cellulite.

WWD: What is your take on retail business for the first half of 2012?
M.R.:
Given the complexity and uncertainty of the global marketplace, we, like everyone else, remain cautious about the first half of 2012. However, we like our position in the marketplace and our ability to have share gains for our brands.
 
WWD: What about international business?
M.R.:
Given international represents roughly 9 percent of our total revenues, it remains a major focus as we continue to grow this part of our business. Since 2008 through year-end 2010, international revenues have grown at a compounded annual rate of 10 percent. In 2011, international sales accelerated further and are expected to increase by 20 percent or more.…International is one of the fastest-growing segments of our portfolio and should continue to be a high-growth segment for Maidenform in the future. We are sold in 60 countries and see continued strong potential going forward in the U.K., continental Europe, Mexico and Canada. Additionally, the BRIC countries [Brazil, Russia, India and China] represent excellent opportunities for Maidenform and Donna Karan Intimates.

WWD: Why is intimate apparel such an emotional purchase for women?
M.R.:
Lingerie is the closest thing against a woman’s body.…Maidenform understands her shape, her assets and her insecurities. We support her from the inside out with solution-based technology that smooths, shapes, slims, lifts and improves her natural curves. Intimates often define a woman’s personal style and mark life moments such as adolescence, proms, weddings and other special occasions.