When Danskin's president and CEO Carol Hochman took the helm of the firm in 1999, the 124-year-old dance, active and yoga wear brand needed a shot in the arm.
"They had a mantra here," says Hochman. "Design what we can make in our factory" instead of "Design what the customer wants to buy."
Hochman, who came to Danskin from Liz Claiborne, knew she had to make some changes quickly. "There were a lot of basic premises that made no sense. We had to redefine and re-orchestrate our thinking," she says.
Putting the margin back into the product
For one thing, while trying to come up with new business ideas, the company was ignoring its customer. "The management team before me -- if you were to draw a diagram -- had themselves in the middle, with the retailer and consumer running around them. ' We had to change a lot of peoples' thinking to become more consumer- and retailer-centric," she says.
The company needed to rework its thinking about the products it made, and also where it made them. When Hochman came on board, the company was not only making just what it could make in its factory, but it was also making things that it could not make competitively.
"Our sales team thought as long as they brought business in, it didn't matter if there was any margin behind it. They said things like: 'Ëå"If we sell a lot of it, we'll make money.' I said: 'Ëå"At this margin, if you sell a lot of it, you'll just lose a lot of money.' "
The Danskin team refocused its efforts on its product mix and manufacturing base. It reduced the number of SKUs from about 15,000 to 4,200. Those items that its factory couldn't make, or couldn't make well or cost effectively, the company took offshore.
Today, the company still manufactures about 35 percent of its product domestically, "but what we make domestically now is what we do best and can make money making," says Hochman. That includes all of its knitted dance tights, performance bottoms such as leggings and capris and most dance products such as leotards and tutus.
Pursuing growth through new distribution channels
Straightening out the product mix and going offshore were crucial to company performance, but the strategy that really "changed the shape of the whole company" and allowed Danskin to grow significantly was its decision to expand into different channels of distribution, such as Wal-Mart and Target, beyond its "upstairs" business with higher-end retailers.
"I think the most unique decision we made here was to take a diffusion brand to Target before anybody else did, in about 2000," says Hochman.
At that time there were no diffusion brands at Wal-Mart in soft lines either. "We were gutsy again," she says. "Target was perceived as trendy and hip, so [when we went into Target], we thought that we'd get a buy-in from the upstairs marketplace, but when we went into Wal-Mart, we didn't know what would happen."
But Danskin moved forward. "We felt as long as we kept the product separate and maintained the integrity of what we were doing upstairs, that we'd be okay."
And it was. Says Hochman: "If I had to identify my most audacious decision as a manager, that was it. Thinking we could maintain our Bloomingdales and Nordstrom business and go to Wal-Mart at the same time and make it work, and we did."It's all about layering our distribution to meet our customer wherever she may want to shop," says Hochman. Danskin has a licensing agreement with Target for a girls' line called Freestyle, and designs a women's and girls' line for Wal-Mart called Danskin Now. This fall, Wal-Mart introduced a Danskin Now yoga line made with organic cotton. Wal-Mart supplies the cotton and the sourcing. Danskin does the design.
Hochman won't talk figures, but says Danskin has experienced "significant growth" in recent years. "Since I've been here, we've about tripled the wholesale equivalent of our numbers. A lot of that, of course, comes from dealing with the mass market," she says.
Staying on the cutting edge
It's not surprising that Danskin would be tapped by Wal-Mart to do an organic cotton line. Product-wise, Danskin is always "on the edge of innovation," says Hochman. Its customers -- from REI to Paragon to the sporting goods and department stores -- demand it.
"For us, innovation is performance fabrics," she says. "If there's a new attribute that we can find a way to put into our product ' then Danskin is doing it. This is part and parcel of what we do every day to be able to say that we are a true performance company. And we are." One of Danskin's most successful fabrics is its O2 performance, a moisture-wicking, quick-drying cotton and nylon plaited-fabric blend that took 18 months to develop.
"Our women love cotton," says Hochman. Since developing O2 several years ago, the company has done a multitude of products with cotton performance blends, both with proprietary fabrics as well as others it has adapted from the market. "There's a lot of good stuff out there," she says.
Danskin also incorporates bamboo into some of its products, a fiber that is naturally antimicrobial, moisture-wicking -- and replenishable.
Giving back to the customer
Hochman knows she is lucky to have inherited such a great brand and heritage. Danskin's research reports that nine of 10 U.S. women know the brand, and this year, Danskin ranked No. 35 in the Women's Wear 100 List of most-recognizable brands.
"It's a terrific brand. People have nothing but good feelings about it. We get our customer at 3 years old in her first pink tutu -- and nobody has a miserable time at their first ballet classes," quips Hochman. The positive associations continue into adulthood. Women buy Danskin product, and also continue the cycle with their own daughters.
One of the ways Danskin gives back to the consumers who have supported it over the years is through the Danskin Women's Triathlon series, the world's oldest and largest multi-sport event. It takes place during the summer in eight cities across the country, drawing about 22,000 women to participate each year.
The firm's triathlon in Seattle last year was the world's largest triathlon, making the Guinness Book of records with 5,454 women. At each race, 19-time Ironwoman and Danskin spokesperson Sally Edwards is the event's sweep athlete, coming in last in every leg of the race, so that none of the contestants ever has to.
"The race is not about winning; it's about finishing and doing something for yourself," she says. Danskin sends training teams across the country to help participants get ready for the event.
The race is also about giving back to women in other ways. Approximately 10 percent of the admissions fees from the event go to breast cancer research, with Danskin donating approximately $150,000 from every race to the cause.
Competing in each race are about 100 team survivors. "After you've come through cancer, everyone else has been in control of your life and your destiny. [Participating in the triathlon] is about taking back control," says Hochman.
The Danskin management style
Taking control is something Hochman can relate to on a professional level. Her previous work environment was very rigid, with a lot of time eaten up with "corporate stuff." She remembers finally getting to her desk at 5:30 or 6 p.m., "and that's when my work for my division would begin."
When Hochman came to Danskin, she decided to eliminate as much busy work as possible, so that everyone could do his or her job within the confines of a normal workday.
The management team also works hard to provide flexibility, taking into account family and personal lives. "We try and set up boundaries that are flexible and adaptable to everybody's lifestyle. Then you hire talented people, and you let them do their job."
Hochman credits Jerry Chazen, her mentor at Liz Claiborne, with teaching her the most important thing about running a business: Know what you don't know, and surround yourself with people who do, and then you're set."And that's what we try to do," Hochman concludes.
Jordan K. Speer, Apparel
If you visit Danskin's headquarters on Seventh Avenue in New York City, you might think you're in the wrong place. The conference room is situated behind the enormous metal door of a vault. The former tenant was a bank.
CEO Reading Material
Danskin president and CEO Carol Hochman recently finished Nora Ephron's "I Feel Bad About My Neck: And Other Thoughts on Being a Woman." "It's a book about getting a little older. If that's not deeply intellectual, it's the facts," she says.
Dressing the Pros
Danskin dresses many professionals, including Broadway actors. It provides dancewear for the New York City Ballet, the Bolshoi, the Kirov, the Miami Ballet, the Boston Ballet and more. It's the official outfitter for the Radio City Music Hall Rockettes. "Andrew Lloyd Webber shows don't leave London without Danskin tights," quips Hochman. And the girls in the Folies Bergere and the Lido in Paris wear Danskin fishnet.
Danskin owns about 20 of its own stores; most outlet, three regular-priced. Before growing its regular-priced retail stores, the company would have to "refine and hone our concept," says Hochman. Danskin also sells through the successful www.danskin.com.