DOING THEIR LEGWORK
KAYSER-ROTH CORP., THE MANUFACTURER BEHIND HUE, IS FINDING A GOOD FIT WITH SOCKS AND SHEERS.
Byline: Marc Karimzadeh
Call Kevin Toomey a leg man. For Toomey, the president and chief executive officer of Kayser-Roth Corp., the owner of the Hue brand, there couldn’t be a more innovative profession than one that expands women’s hosiery horizons.
He encourages his colleagues — he calls them “teammates” — to come up with creative concepts. But these ideas, he said, have to be fresh, fun and fit for consumers.
From tube-shaped socklets that expose toes and heels to functional items, such as invisible control tops and waistbandless pantyhose, the design staff of 15 “teammates” is kept, well, on their toes.
“Items are important to liven up retailer’s assortments,” said Toomey, who is based at the company’s new Greensboro, N.C., headquarters. “In sheers, we have to be innovative to stay in the category. I think it will also be that way for socks in the future.
“We empower our people to go out and make decisions, we’re not an organization that looks over everybody’s shoulders.”
By building its repertoire with new classifications and product innovations, the firm, whose current wholesale volume is estimated at $310 million, is planning for a significant presence in specialty, department store and mass-market legwear retail. While Toomey declined to give sales figures, he said the company projects annual increases of three to five percent over the next five years. His goal, he said, is to exceed these projections by expanding distribution, enhancing its presence with existing retailers and making acquisitions, though he declined to name possible targets.
Growth has been a trend for the socks and sheers licensee for Calvin Klein Collection and CK Calvin Klein, partly thanks to the deep pockets of its latest owners, Golden Lady Spa. The Mantova, Italy-based maker and distributor of sheer hosiery acquired the 90-year-old Kayser-Roth Corp. in January 1999 for an undisclosed sum, after a troubled decade of declining sales figures, the disbanding of a retail outlet business and several ownership changes which drained the company, Toomey said. “[Golden Lady] made an unprecedented investment into the company and its facility, with brand-new equipment that offers [new manufacturing] processes.”
Toomey pointed to policy changes that have improved the company’s profitability:
A new inventory strategy means that some 20 percent of stored goods come in a “greige” color, which means retailers can place special orders for colors according to customer demand. “There is more flexibility for stores, and requests for colors can be turned around in one to three days,” said Toomey. Plans include increasing the greige inventory to 25 percent in the next five years.
Because Golden Lady invested in yarn processing machinery, Kayser-Roth is now able to offer higher-quality products as well as increase its emphasis on innovation in sheers and casual legwear, including no-waistband pantyhose and two-tone woven fishnets.
The new machinery also produces more efficiently, resulting in improved service levels and smoother deliveries.
Kayser-Roth has also extended its training program. The company has initiated leadership skills training for facility and department managers as well as management groups. They have also hired a software training service to improve employees’ computer skills. “It improves our effectiveness and efficiency,” said Toomey. “We are making an investment in our people, and they recognize how important that is.”
While many hosiery companies are, paradoxically, run by men who never wear the products they are promoting, Kayser-Roth prides itself on the opposite: 70 percent of all employees, including 38 percent of management, are female.
“When you think about consumer buying patterns [in hosiery], 70 percent of all purchases are made by women,” said Toomey. “We have people that are intimately involved in the product and give their perspective on it. That is an asset.”
Kayser-Roth is aggressively building its Hue brand, which currently accounts for approximately 20 percent of all of the company’s business. That number, said Toomey, could rise to 35 percent in the next five years, given new product releases and the possibility of exporting the brand globally next year. Last November, Kayser-Roth, which had been the licensee for the Hue legwear line since 1994, purchased the Hue brand name from The Leslie Fay Co. for an undisclosed sum. Since then, Kayser-Roth has expanded its legwear offering, which primarily focused on socks sold in some 1,500 doors, to include sheers.
Launched during the fall market last March, Hue Sheers offers an alternative to hosiery-weary women. The line consists of three color-coded groups easily identified by their clear, unfussy packaging, featuring an image of a woman, casual in clothing and stance, modeling a sheer style.
Each of the five styles in the blue-coded packaging is devoted to control features, including pantyhose with clear control, another without a waistband, footless pantyhose and one with a control-top panty. In the pink-hued packaging, customers will find French lace hose and thigh-highs, with either the panty or band done in lace. The five yellow styles pick up on fashion trends. For fall, these include two-tone fishnets, micro-mesh tights and a Lurex glitter fishnet in lightweight yarns. The back of each of the flat packaging gives customers extensive information on the product’s functions and benefits, and packaging features a pop-up hook to allow merchandising on tight walls or even casual fixtures.
“The consumer has so little time walking through a department, if you’re going to convince her to buy a product, you have to make it easy,” Toomey said. “Anything that makes the shopping experience easier makes a huge difference for the retailer, the consumer and us.”
Introducing sheers puzzled many industry experts since few see a promising future for them. Some industry sources sniped that Hue Sheers was conceived to make up for the declining CK Calvin Klein sheer business. Others said that because the industry is led by mass or luxury product lines, bridge lines found it hard to carve out their own identity.
“On a broader scale, the whole bridge business is difficult,” Toomey said of such speculation. “Our focus for innovation is on the [Calvin Klein] collection line, which is the lion’s share of the business.”
For Hue, the move seems to so far have paid off at wholesale, with sell-throughs yet to be determined. The sheers line projected initial distribution to some 500 doors, and Toomey said the company exceeded plan and will be sold in 635 doors this fall. “We like to be in as many doors in sheers as in socks,” he added. “Our [projected] increases will come from Hue sheers, new product lines and socks, including sport socks, which we recently added. [Sport] is a big market and we want a part of it.”
Hue Sport, which launched at retail in January 2000, offers sport socks in exuberant colors or prints such as florals, argyles and stripes, all aimed at livening up the sport-sock fixtures dominated the usual offerings in white. Hue Sport accounts for up to 20 percent of sales and “will continue to grow,” said Toomey.
“The potential is unlimited,” Toomey said, adding that future expansions could include scarves, slippers, handbags or even cosmetics. “Hue has a foundation to be a great brand.”