Bra Company Finds Overseas Markets Uplifting

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Bra Company Finds Overseas Markets Uplifting
Juliana Lutzi

Bra maker Pure Style Girlfriends almost went bust in the recession. But international marketing savvy and careful money management gave the company the lift it needed to survive and thrive.

Juliana Lutzi started the South L.A. company in 2007 to design, manufacture and sell adhesive pads and specialty bras that support and reshape women’s breasts. Lutzi’s strategy was to sell the items in fashion boutiques.

The items were carried by 300 shops in the United States. By late 2008, that number rose to 1,400 stores, including upscale chains Tracy Ross, Intuition, Fred Segal and Cache. Things were going well.

But in December 2008, the economic crisis devastated upscale clothing retailers. By late 2009, nearly 40 percent of Pure Style Girlfriends’ retailers had gone out of business. An additional 30 percent were still open but stopped buying products in order to conserve cash. The remaining 30 percent continued to order products, but at lower numbers or with no growth.

The company was burning through its startup investment money. Lutzi knew the clock was ticking.

“As the numbers got worse every month, we were on a crash course for the rocks,” she recalled. “I couldn’t continue to allow sales to dip much longer.”

Lutzi decided to go international. She began attending trade shows and contacting distributors in other countries. By the third quarter of 2010, revenue at the company had jumped 400 percent from a late-2009 low point. During the quarter, the company sold 15,000 units in the United States and 513,000 in other countries; customers in South Korea and Italy were the largest buyers.

“My real goal wasn’t to be in boutiques – it was profitability,” Lutzi said.

She’s not competing with European lingerie – only the specialized market of padding and padded bras.

“Our products are not sexy to look at, but they make you look sexy in your favorite outfits,” she explained. “This is a different market.”

Foreign policy

Lutzi believes the most important decision when selling overseas is selecting the right distributor. She has lined up different types of strategic partners in each country where she does business. For example, her distributor in South Korea sells the pads and bras direct to consumers through TV ads. In Italy, her products are on the shelves at Coin, a major department store chain.

Once she chooses a distributor, she provides support in the form of marketing materials such as videos or photos of celebrities wearing the products.

She never ships items until she receives a wire transfer or a letter of credit.

“People who legitimately do business overseas are comfortable with this, so small businesses shouldn’t feel intimidated about asking,” she said. “If the client balks, it means there’s a problem.”

Also, she’s careful. For example, the Italian retailer Gruppo Coin wanted to sell Pure Style Girlfriends products in all 85 of its stores. For Lutzi, that posed a huge risk if she manufactured thousands of bras that wouldn’t sell. Instead, she negotiated to sell her products in 14 of the chain’s largest stores.

“We had never sold in department stores in Europe before,” she explained. “We wanted to start in a controlled way. Eventually we want to be in all those stores.”

Bruce Winston, owner of trade consultancy Makor Group International in Culver City, said that once products such as Pure Style Girlfriends’ are established in a foreign market, local companies will try to horn in on the action.

“If a foreign distributor finds he can cut her out by having a local plant make the products, he might try it unless she has solid brand recognition among consumers,” Winston said.

Lutzi said she protects her products from piracy and imitators. Every product has differentiating characteristics such as a special seam inside a bra cup or a stretchy material used for tape that moves with the skin. These details are noticed by consumers and make the product very difficult or expensive for pirates to duplicate.

Also, Pure Style Girlfriends has 15 trademarks, one patent and a patent pending to protect its intellectual property.

Winston added that Lutzi can plan on her costs going up as she enters more countries.

“Each country has its own set of customs laws, labeling requirements and import duties,” he said. “As the company grows, that will become more of an issue. You’ll need customs brokers and lawyers in each country and they aren’t cheap.”

Direct to consumer

Pure Style Girlfriends is Lutzi’s second startup.

Her first company, Fire Solutions, offered online professional courses to Wall Street stock brokers. After she sold the company in 2004 to Palmer Group, a Philadelphia private investment firm, she used part of the proceeds to bankroll Pure Style Girlfriends.

“I understand the complexity of raising money,” she said, “and I’m happy I’ll never have to raise another dollar. Pure Style was self-funded.”

She said the business is profitable with revenue of less than $3 million annually. With her products selling in more than 10 countries, Lutzi is turning her attention to selling directly to consumers in the United States. A marketing campaign that launched in May with online and TV ads will direct consumers to a website or 800 number, respectively, to order products.

Lutzi thinks her company has emerged from the recession stronger than before and she has high goals for growth in the future.

“I wouldn’t do this if I didn’t think it could grow into a $100 million business,” she said. “When we launched we were a one-legged pony by only selling through boutiques. Now we have three channels – boutiques, international and direct to consumer.”

Pure Style Girlfriends

Founded: 2007

Headquarters: South Los Angeles

Core Business: Push-up bras, inserts and adhesive pads for breast support.

Employees: 12

Goal: To grow into $100 million company through retail, international and direct-to-consumer sales.

The Numbers: One-year revenue gain of 400 percent entirely from foreign sales.

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