11 Jun 2010, Posted by admin in 20 Questions,Fashion, 1 Comments

20 Questions With Maidenform CEO Maurice Reznik

Name: Maurice Reznik

Title: CEO of Maidenform

Founded over 85 years ago, Maidenform revolutionized women’s intimate apparel with the creation of the first modern day bra –a bra that separates and supports breasts, highlighting the natural shape of a woman’s figure, or her “maiden form.” Since then, the company has sold millions of bras through department stores, mass retailers, its own specialty retail outlets, and its website Maidenform.com to become a market leader in intimate apparel.  Since July 2008, the company has continued to experience great success under the leadership of CEO Maurice Reznik. In this edition of 20 Questions, Reznik discusses his personal career path in the retail industry, why great product is key to a company’s long term success and Maidenform’s exciting new brand initiatives (including the roll-out of a new juniors’ brand).

Jennifer Sung: Despite its long history, it appears to me that Maidenform remains largely unknown to younger generations. How would you describe the Maidenform brand to people who are learning about it for the first time?

Maurice Reznik: I always say to know us is to love us and not to know us is to reject us. We make everyday sensual [wear]. Comfort is always a key criterion as is quality. Everything we do is positioned for everyday use and hopefully the product that consumers reach for. People that don’t know us often think of Maidenform as an old brand so we still have some work to do from a branding perspective but from a product sensibility perspective, the brand skews younger.

JS: Can you tell me about your background before you become CEO of Maidenform in July 2008? How did it prepare you for your current role?

MR: I grew up in Argentina and then went to high school and college in the United States. I attended Queens College in New York and then basically started working in the apparel industry as a trainee at VF Corporation. Then I went on to work for Hanesbrands as the head of sales and then became president of Warnaco.

I always tell my kids that my whole focus has always been to be very passionate about what I am doing, to work really hard at the job at hand–not thinking too many jobs ahead but really being the best at what I’m doing – and to be extremely competitive. My family came [to the US] in the late 1960s with nothing but the great American dream that if you work hard and you are passionate and open to learning, then you can make it. And things don’t always work out that way but in my case, it really did. I never really groomed myself to become a CEO so I feel very fortunate. As a matter of fact, I just went back to Queens College recently to talk about this because half of the students there are immigrants or first generation Americans and the [American] dream really works.

JS: The first bra was invented by Maidenform’s founders Ida and William Rosenthal in 1922. Since then, the company has been the premiere intimate apparel company for over 85 years. What do you think has contributed to Maidenform’s long history of success?

MR: There has always been a lot of innovation [within the company] even back in the 1920s with the creation of the first modern day bra to Maidenform advertisements posted on subways and outdoor billboards–it was unheard of [at the time]. So there has always been a culture of innovation and I think that’s helped the company to survive. The company has been through some real turmoil [in the past]. It filed for Chapter 11 [bankruptcy] in the 1990s but the brand had such strength that it was able to survive. And somehow, some way, the company has been able to maintain a connection and a relevance to consumers. It sounds funny coming from a guy but the positioning of Maidenform has always been by women for women and that connection and relevance to consumers has allowed Maidenform to survive for almost 90 years.

JS: What sets Maidenform apart from all of the other intimate apparel companies out there?

MR: Innovation is such a big deal. We call it commercial innovation–it’s got to be something that people want. They want innovation that really makes their life better and more comfortable. I think the fact that we are such an important resource in the fastest growing segment [in intimate wear], which is shape wear, also sets us apart. We have a culture of shape wear and we are really focused on it. The fact that we are also a small-big company for our category [sets us apart]. People who work here will often say that it’s a flat organization where things happen quickly, that there’s a bias toward action, and a collective passion that the company has to win every day. That is our culture and the people who work here can really connect the dots. Even our finance department [for example] knows how our bras are made.

JS: What do consumers look for in the perfect bra?

MR: Well, it’s a never ending search. Nobody’s done it yet and every year we try to get closer and closer to it but on the top of consumers’ agendas are comfort and support/performance. No two women are alike and even on the same woman, no two breasts are alike so it’s a challenge. What is it going to take for a person like you to reach for the same bra every day? Some of it is really about making you look the best you possibly can. Bras can really enhance your shape and minimize any real or perceived imperfections that [you] have. But it is really about comfort, fit, etc. Aesthetics are obviously important as well. For some people it means modesty but whatever the formula is comfort is a common trait. And ultimately, it’s about price and value [too].

JS: What influences your consumer’s buying behavior? Do shopping patterns differ between channels (i.e. department stores versus discount retailers versus online)?

MR: It depends on the demographics and age [of our customer]. If you are a full figured consumer, there is not as wide of a range of products [available] and certain products work better for you than others so you tend to be more loyal to brands. Often the decision of which bra to buy is made at the point of sale. So while there is certainly brand loyalty to Maidenform, there is also a lot of brand switching. The younger the consumer, the less loyalty there is [to a brand].

JS: What do consumers love most about Maidenform?

MR: I really believe that consumers who buy our product really do love it 100% unconditionally. There is nothing to hate. We really offer a great value regardless of the channel we are in and our bras always feel the best–the quality is great, and like I said, they are everyday sensual. So the customers that knows us, reaches for us.

JS: What do they hate most about Maidenform?

MR: I may be oversimplifying it but there is really nothing to hate. The only things there is to potentially reject us for is what I mentioned earlier, which is that they don’t know our brand so they think that Maidenform is old. The common perception is that my grandmother wore [a Maidenform] bra and the perceived negative [trait] is not real. Nevertheless, we have to work on that.

JS: How easy or complicated is it to make a bra. Can you share the production process of one of your bras?

MR: It usually takes us about a year [from start to finish]. It’s really complicated and that’s why private label bras have not been as supported as other categories [like underwear]. There really are [many] barriers to entry. We come up with a concept by looking at external influences like fashions and trends. We then design into the pricing with what we call a line item cost sheet–we have to make sure that the pricing works. We negotiate [pricing on] every component of a bra–a bra can have over 36 parts. The thread, the hook, the eye, etc.–we negotiate that with every one of our suppliers and then negotiate it with one of our contractors in Asia or Bangladesh. Then we work with the technical designers to make sure that the bras actually work well. The turnaround time from the moment when the product is priced to when it goes [into production] is usually six months.

JS: Although Maidenform started its business in bras, shapewear has been a very fast growing segment of your business and now makes up more than one-third of your sales. Still, only two out of every ten women have tried or worn shapewear. How big is the market opportunity for shapewear?

MR: If you look at the market aggregate for the US only, you are talking about a $9-10 billion market for intimate apparel across bras, panties, and shapewear. Shapewear is less than $1 billion dollars today and our share of that market is close to 40%, so we believe that even though only two out of ten women wear shapewear on a daily basis, ten out of ten women can wear shapewear. Even though it’s not about demographics–people are getting older. Even though it’s not about size–people are getting bigger. So these [trends] help the category too. If we just capture one more [shapewear customer] to make it three out of ten, then that would grow the category by another $4-5 million dollars. So the way we view it is that it’s not just about market share but it’s about increasing market awareness and growing the category [further]. Internationally, the category is even more underdeveloped with the exception of Asia, so there are big opportunities.

JS: You launched Donna Karan and DKNY intimate apparel in March 2009.  Can you explain your rationale behind purchasing the license to create product for a designer intimate apparel brand?

MR: At the better fashion retailers like Nordstrom, Neiman Marcus and Saks Fifth Avenue, DKNY is incremental business for us. Internationally, it’s a real door opener. The brand equity of Donna Karen is huge and we see the brand as an opportunity to increase our international penetration because we are still underdeveloped internationally. Less than 10% of our business is international and if you look at other companies like Warnaco, for example, their international business is 50% [of their net sales]. Donna Karan is one of those great American iconic brands that has international equity. We are [already seeing] a lot of doors open up [to us] in markets like Spain and France where we do more business than ever before.

JS: This year, you are investing in a number of other business initiatives including a new juniors’ line (Charmed), Maidenform at Home (a direct-to-consumer business model), shapewear kiosks and a newly revamped website.  What is your overall strategy with these initiatives?

MR: Well the overall strategy is to surprise the consumer with where they can find our brand, but ultimately it’s about leveraging Maidenform. We probably have the biggest share of the girl’s business–the girl being defined as 8 to 12 year olds–but then there is a void in between where even though some younger consumers do wear Maidenform, we don’t really have a way to really reach the juniors customer and make the brand more relevant. That is what really drove Charmed. Obviously we want to do more business but we really want to capture consumers, particularly younger customers and build more brand loyalty. The age group we are targeting is 17 to 25 year olds but the aesthetics of [Charmed] can appeal to mothers and daughters because the bras are not built that differently from our Maidenform bras (as far as the fit). College students today are built very similar to the population at large. So Charmed will be launching as a major initiative in several hundred doors during the third quarter.

The shapewear kiosks are another initiative where we are leveraging the Bod Squad, our shapewear brand, and Flexees by Maidenform. It offers an opportunity for us to extend and associate ourselves with a category that is really adolescent in its development so hopefully it will surprise and really delight our consumer in a setting that they wouldn’t expect to see us in.

The Maidenform at Home initiative also leverages our brand and our expertise in shapewear. It’s basically throwing intimate apparel parties in the comfort of your home. Ultimately all three of these initiatives are [intended] to make money so [the fact that] they can leverage our brand and act as great marketing vehicles is great.

JS: What are the biggest near term challenges for Maidenform?

MR: It’s always competition that we are concerned about. Whenever you are doing something well, people take notice so we are perpetually paranoid–it’s what keeps us on 24 hour alert. We are always concerned about potential pricing issues, devaluation in China, etc. We try to mitigate these risks by sourcing lower cost items from places like Bangladesh. Ultimately, it’s really about making sure we are relevant and on top of our game.

JS: Having been through many downward economic cycles in the past, what do you think will set apart brands that prosper in these turbulent economic times?

MR: The brand has to resonate with consumers but it’s really the product you have to focus on. Consumers will always find great product and they will reject product that isn’t competitive.  So product is number one, two, three, four and five.

JS: What will Maidenform look like 5 to 10 years from now?

MR: Much, much bigger for sure. Hopefully [Maidenform will be] in a position where we have advocates talking about how cool the brand is across all demographics and it will be much bigger internationally. We hope to have meaningful distribution in the BRIC countries where we don’t today (with the exception of Russia). We will probably have a bigger retail presence, a bigger direct to consumer presence through initiatives like Maidenform at Home and kiosks. We just finished a big web redesign as well. So everything that we are doing is about adding growth. We really believe that there is still so much opportunity and that’s part of our 5-10-15 initiative: 5 key initiatives, 10% top line growth, and 15% bottom line growth and we’ve given guidance to do much better than that this year.

JS: What do you think has been the brand’s biggest success since becoming CEO of Maidenform? What has been your biggest regret or mistake?

MR: The company’s biggest success has really been the company’s ability to grow across channels and categories even against [industry] trends. For example, we grew last year when nobody else did so I think the most rewarding aspect has been the [ability] to collectively unleash our passion for our product with laser-like focus. Shapewear and our Fat Free Dressing (meant to be seen shapewear) category has been huge and incremental. [I’m proud of] our ability to significantly grow our business at Wal-Mart and Target and Kmart to become the largest intimate apparel growth story in the mass channel.

I don’t know if this is a regret but the biggest challenge that I have now is recruiting better and better people. How are we sure that the people we bring in are the right fit? That’s a never-ending challenge. [We look for] people that have the same DNA and frankly, it’s been harder than anticipated. And it’s a learning process to continue the kind of growth we have been fortunate and good enough to achieve.

JS: How is leading a public company different from leading a privately held company?

MR: Well, in some respects it is similar because you have stakeholders in both situations. I think it really depends on who your private equity partner is [in a privately held company]. As a public company, there is clearly a lot more visibility with everything that you do. Everything is under a magnifying glass but we as a management team have focused on what’s right for the business–that’s our motto and we really do live by that. We do focus on being very transparent and don’t do things because [it will contribute] to the aesthetics of a quarter.

JS: What do you do in your role as CEO?

MR: That’s what my kids ask me. They always say, “You don’t make the bra. So what do you do?” I think my charge is to set the strategy with the management team and to lead that charge. I also help the organization from a structural and people development perspective. That’s why I think it’s important to be perceived as a company that everyone wants to work at. There are a lot of great things that are going towards that effort. We have a great intern program that we just started in the last year and a half.  Hopefully, I can be inspirational and motivational and create a culture that people love and want to work in.

JS: What have you learned about yourself in your role as CEO of Maidenform?

MR: [One thing I’ve learned] I would say is that you can’t do everything yourself. Even though Maidenform has a culture of people who are working managers, I think learning to delegate is important. The second is that exposure is critical. It is really important to go out and meet people and not become too inbred as an organization.

JS: What is the best piece of advice you’ve ever given or received?

MR: There’s no substitute for hard work. And believe in yourself.

–Jennifer Sung

Photos courtesy of Maidenform. From top: Maidenform set, CEO Maurice Reznick, Maidenform ad, Fat Free Dressing collection, Maidenform shapewear, Flexees collection

Disclosure: Jennifer Sung is an equity research analyst Brean Murray, Carret & Co. where she performs fundamental equity analysis of listed companies in the retail sector, including Maidenform (MFB). The views expressed in the article are those of Maidenform CEO Maurice Reznik and do not necessarily reflect the views of the analyst or the firm.