Danskin, Inc.
Address:
530 Seventh Avenue
New York, New York 10018
U.S.A.
Telephone: (212) 764-4630
Toll Free: 800-288-6749; (888) DANSKIN
Fax: (212) 764-7265
http://www.danskin.com
Statistics:
Public Company
Incorporated: 1882
Employees: 2,168
Sales: $81.8 million (2001)
Stock Exchanges: Over the Counter (OTC)
Ticker Symbol: DANS
NAIC: 315239 Women's and Girls' Cut and Sew Other Outerwear Manufacturing
Company Perspectives:
A combination of feminine styling and performance fabrics puts Danskin in a completely unique place for active women. From technically advanced fabrics like O2 Performance (a unique blend of CoolMax and cotton) and Supplex with Lycra to added product features for comfort and fit. Danskin is the only premier brand committed exclusively to addressing the multi-faceted needs of today's active women and girls from authentic sports to an active everyday lifestyle.
Key Dates:
1882: The Goodman family opens a store selling European hosiery.
1980: The business is acquired by Esmark/International Playtex.
1984: Beatrice acquires Esmark.
1986: Danskin goes private as a division of Esmark Apparel, Inc.
1992: Danskin, Inc. goes public.
1999: New CEO Carol Hochman begins turnaround measures.
2001: Danskin sponsors the Rockettes tour; Target begins carrying the product.
2002: A line of dance clothes is developed for the New York City Ballet.
2003: The Pennaco Hosiery division is sold off to a management-led group.
Company History:
Danskin, Inc. is a leading maker and marketer of women's athletic and fitness wear. The company sells clothing to be worn during dance and exercise, and also offers hosiery. Founded in the late 19th century, Danskin made its name as a vendor of tights, tutus, and leotards, which became the standard for dancers across the United States. Although Danskin expanded its line of products to meet the needs of a much wider segment of the population, the company failed to capitalize on the women's fitness boom that began in the 1980s to the extent of up-and-coming rivals like Reebok and Nike. As CEO Carol Hochman told Sporting Goods Business, however, Danskin is the only leading women's fitness brand to have its roots in women's products. It has maintained a special place in the hearts of active women and girls by such gestures as sponsoring an educational tour by the Rockettes and by hosting the world's largest triathlon series, a women-only affair held in several cities. Danskin also continues to innovate, developing new fabrics such as Performance O2, which combines a layer of cotton cloth with one of CoolMax.
The Company's Founding in 1882
The company that became Danskin was founded in 1882 in New York City, when brothers Joel and Benson Goodman opened a small dry goods store, which sold tights and hosiery that it imported from Europe. The store soon became popular with dancers, and, sensing a market opportunity, the Goodmans began to manufacture goods specifically for dancers' needs. From this start, Danskin soon came to dominate the market for clothing worn while dancing. The Goodmans introduced the first knit tights and leotards, and also pioneered the production of such dance standards as fishnet stockings. The company also popularized the use of the colors "ballet pink" and "theatrical pink" for dancers' tights.
Throughout the late 19th century and the first half of the 20th century, Danskin dominated the market for dancewear in the United States. Over time, the company's goods and products became synonymous with dance clothing. In addition to its tights and leotards for dancers of all sorts, the company introduced similar products for gymnasts and figure skaters.
Danskin is credited with producing the first nylon bodywear in the 1950s. In the late 1960s, the company broke out of the relatively restricted market consisting of dancers, gymnasts, and skaters when it marketed its first product for wear on the street by the general population. This innovative adaptation of its traditional product line was the bodysuit. The company added snaps for convenience to a conventional leotard, and also updated its styling to make it more fashionable. In this way, Danskin hoped to market its products to a broader range of consumers.
Following this innovation, Danskin entered a new market in the mid-1970s. In 1976, the company began to market swimwear, another extension of its basic leotard line. Using new technology, Danskin invented a shiny, stretchy fabric that was a blend of nylon and spandex. The company used this fabric in a maillot bathing suit, which, like the leotard, fit the wearer's body like a second skin. By the end of the decade, Danskin boasted an 80 percent share of the bodywear market overall.
Acquisition by Playtex/Esmark in 1980
At the start of the 1980s, Danskin ceased to be a privately held firm, when the company was sold to International Playtex, Inc., on April 29, 1980. Danskin's new owner had itself been purchased and become a subsidiary of a conglomerate called Esmark, Inc., in 1975. Esmark was founded in 1972 to take over the assets of the Swift & Company meatpacking business and since the early 1970s had grown by purchasing companies in a wide variety of fields, which were divided into four loose groupings: food divisions, leather and chemicals, insurance and financial services, and petroleum and oil.
With the purchase of Playtex, Esmark moved into the consumer goods area, and this unit's subsequent purchase of Danskin strengthened its holdings in the knit goods and hosiery fields. Playtex had first entered the market for women's hosiery in August 1977, when the company bought Pennaco Hosiery, Inc., which marketed women's stockings under the brand name "Round the Clock." Pennaco's history dated back to 1919. Playtex augmented its holdings in this field five months later, when it also acquired Virginia Maid Hosiery Mills, Inc.
In the early 1980s, Danskin saw the rapid expansion of another potential market for its products, as the popularity of aerobic exercise grew. As women flocked to dance and exercise classes, Danskin began to market a special line of athletic wear for use in fitness classes. The company's entry into the workout apparel market expanded its line of product offerings and its overall sales throughout the 1980s.
Four years after Danskin became a part of Esmark, the company's corporate parent was itself acquired by the Beatrice Companies, Inc., on August 7, 1984. Beatrice had grown through acquisitions into a wide-ranging and far-flung conglomeration of business interests, of which Esmark made up only a small part. As Beatrice moved into the mid-1980s, the company became caught up in the turmoil of the financial industry. By early 1986, efforts were under way to take Beatrice private in a leveraged buyout, as clearly the company's various parts would have to be broken apart and sold off in order to pay off part of the debt taken on when the company went private. As part of this process, Beatrice announced in October 1985 that it would sell its knitwear operations, including Danskin.
Spinoff in 1986
Preparatory to this effort, Beatrice set aside Esmark's apparel units, which consisted of Danskin and the Pennaco Hosiery Company, forming Esmark Apparel, Inc., on February 21, 1986. These operations recorded combined sales in 1985 of $100 million. Then, on April 17, 1986, the leveraged buyout of Beatrice was completed, as the company's outstanding shares were purchased by the BCI Holdings Corporation for $6.2 billion. Two months later, Beatrice announced the successful sale of its knitwear operations to Eaglewood Partners for just $15 million, plus assumed debts of $12 million. Eaglewood Partners was an investor group put together by a private New York investment banking firm, Hero & Company. Eaglewood announced that its managing partner, Byron A. Hero, would be put in charge of Esmark. Danskin's general manager, Barbara Khouri, became the company's president. With this move, Esmark, with two divisions, Danskin and Pennaco Hosiery, once again became a privately held company.
At the time of its purchase by Eaglewood, Esmark Apparel held the largest portion of the fragmented women's exercise clothing market. Hero maintained that the company had missed opportunities to seize an even larger portion of this field, however, because it had not moved aggressively enough into the burgeoning fitness market. (Beatrice had been notorious, though, for distributing a cheap line of tights to discount stores under the "Playskin" brand name.) The company had not introduced enough new products to meet the growing demand in this sector of the market, according to Hero.
In addition, Hero felt that as a company on the auction block for nine months Esmark had been relegated to second-class status within the Beatrice organization, which had hampered Esmark's efforts to expand its product line more effectively. Therefore, Byron Hero planned to capitalize on the brand name recognition of Danskin and Pennaco, and to broaden the company's offerings of legwear and leotards. With Esmark as a privately held firm, Hero planned to reinvest the company's profits in expanding operations and market penetration. "The kinds of businesses that do well in the fashion industry are independently run and more sensitive to the market," Hero told the Wall Street Journal.
At the end of 1986, Esmark took its first steps toward expanding the company's line of goods, when it bought Dance France, Limited, another maker of dance apparel, from that company's French founder, Francois Greis. The operations of this company were merged into Danskin's existing structure. In the following year, Danskin further expanded its product offerings, introducing Danskin-Plus, a line of large-sized bodywear, in the fall of 1987.
Esmark announced that it would promote this new line, as well as its other products, with a $5 million advertising campaign. This campaign was slated to build on the $3 million campaign, which featured the slogan "all the world's a stage," which Danskin had used to promote a line of short, tight-fitting dresses. This effort boosted sales of the company's adult streetwear by more than one-third in 1987. In addition, Danskin saw sales of its dancewear for children grow by 40 percent over the course of 1987. "It seems that every little girl wants to be a ballerina," Rose Peabody ("Podie") Lynch, Danskin's new president, told Forbes.
In September 1987, Esmark made another strategic acquisition that strengthened its presence in the dancewear market. At that time, the company bought Repetto France, a French manufacturer of dancewear, which specialized in ballet shoes and tutus. Esmark also enhanced its standing in the hosiery market when it acquired the right to distribute the Givenchy Hosiery line of products in foreign markets.
By the start of 1988, Esmark's Danskin division boasted a 98 percent consumer recognition rating in its core bodywear market, but its share of the market had shrunk to 35 percent, down from 80 percent at the start of the decade. Outside of its traditional dance product line, the company had become firmly identified in consumer's minds with Lycra-blend workout wear, a perception that held down sales of the company's non-dance-related clothing.
"We want to reposition Danskin products as young, vital and at the forefront of fashion," Lynch explained to Forbes. The company targeted women from the ages of 18 to 44, hoping to encourage customers to wear its clothes not just for workouts, but for everyday purposes as well. Surveys indicated that nearly half of Danskin's apparel buyers already saw the company's products in this versatile light, but Danskin hoped to increase this percentage even more. "Many of [our customers] like to exercise, but they all like to look good," Lynch maintained.
In addition to increasing sales, Danskin set out to hold down costs. The company reduced the work force at its York, Pennsylvania, knitting mill from 2,500 to 600. Eighty-five percent of the products Danskin sold were manufactured in York, and the other 15 percent were made in Taiwan and shipped to the United States. "Because of the weak dollar, we are bringing the concept of quality circles from Taiwan to our York plant to increase productivity," Lynch noted. All in all, as a result of these efforts, Danskin's sales had risen by 45 percent within two years of its sale by Beatrice.
Building on these gains, Danskin introduced a new line of tights made with Supplex nylon and Lycra in August 1989. Three months later, the company also rolled out Danskin Pro, a collection of athletic wear for women. This clothing was made for those participating in gymnastics, figure skating, track, volleyball, running, water sports, and other activities. To promote these products, Danskin recruited a group of female athletes, which it dubbed "Team Danskin," to serve as consultants, testers, and spokespersons. Among the members of "Team Danskin" were skater Katarina Witt, ballet dancer Darci Kistler, and Hero's own wife, water skier Camille Duvall-Hero.
Danskin continued its promotional efforts in 1990, when the company launched the "Danskin Women's Triathlon Series." This event was designed to meet the need for sports and fitness competitions among female non-career athletes. The triathlon started with events held in three cities, and soon spread to six locations, encompassing more than 10,000 first-time participants.
At the end of 1990, Danskin announced that it would introduce a new line of footwear the following spring. Overall, the company planned to diversify its product line and to further enhance its marketing effort. These efforts began to bear fruit in March 1991, when Danskin introduced a line of headbands and ponytail holders that matched its activewear. One month later, the company announced that it had seen a 50 percent rise in sales for items in its Danskin Plus line, an early attempt by the company to reach out to new customers.
1992 IPO
On July 2, 1992, Esmark Apparel changed its name to that of its most important operating unit, Danskin. Six days later, the company offered $3 million of stock to the public, in an effort to raise $36 million to fund further expansion. The company's initial public offering (IPO), however, was so successful that $39 million was raised.
While it sought capital in the market, Danskin outlined four strategies for further growth, which it had first elucidated in 1988. The first of these goals was to focus greater attention on expanding wholesale distribution of Danskin products. The company hoped to tailor its product lines to different segments of the market, defined as department stores, specialty shops, and sporting goods stores. Danskin hoped to hone marketing techniques that would push more Danskin goods onto the shelves of all of these retail outlets. In addition, Danskin planned to increase the number of retail stores selling its goods directly, by opening a chain of factory outlet stores, which would then be followed by more elaborate full-price stores.
To keep these stores supplied with as wide a range of merchandise as possible, Danskin plotted two strategies to broaden its product offerings. The company moved to license its brand names for use on products made by other manufacturers, and also moved to maximize its production capabilities, expanding the Danskin line of goods in every way possible, given the company's factory equipment. Finally, Danskin hoped to expand sales by increasing overseas marketing efforts.
Shortly after its first public stock offering, Danskin augmented its product offerings by adding a line of children's swimwear. At the end of the year, the company announced that it would push further into the activewear market, building on its strength in the workout gear segment of the apparel industry.
In the spring of 1993, Danskin stepped up its licensing activities. The company purchased rights to the "Shape" label from the Imagination Factory, which it used to launch a line of goods for sale in chain stores and mass merchandisers. One month later, Danskin's Pennaco division licensed its Round the Clock hosiery brand name to Paul Lavitt Mills.
Late in April 1993, Danskin introduced a collection of sportswear for the fall, as the company continued its quest to add market share in the women's apparel field. Although Danskin's sales and earnings showed improvement throughout the first nine months of 1993, the company ran into difficulty in the last quarter of the year, its most important segment for sales. Bad weather forced the company's factory in York, Pennsylvania, to close for 22 days of production in the winter of 1993, and the company's southern hosiery mills, located in Memphis, Tennessee, and Grenada, Mississippi, also were affected.
Although sales of Danskin products increased for the seventh year in a row, Danskin's hosiery division lost $6 million over 1993, as the stocking industry suffered from severe overcapacity. In an effort to stem the losses in this area, Danskin sought to expand into other, stocking-related products, such as socks and tights, and also to add new brand names, such as Christian Dior, a license acquired during the year.
In its effort to expand overall distribution channels, Danskin opened 15 new factory stores, bringing the company's total to 32. In addition, Danskin signed leases for full-service retail outlets in Manhattan and in Miami's trendy South Beach neighborhood. In these stores, Danskin planned to stock clothing for dance, exercise, and sports in a fashion environment. The company hoped that these flagship stores would give other Danskin retailers ideas about how best to present the company's merchandise. In addition, Danskin continued its push into international markets, signing an agreement with a retailer in Australia to market its apparel there. Although Danskin's initial year as a publicly held company proved a disappointment, the strength of its brand name and its firm establishment in its niche of the apparel market boded well for the company as it moved into the mid-1990s.
Former Jockey International Inc. president Howard Cooley was named CEO of Danskin in September 1994, succeeding Byron Hero, who retained the position of chairman for another 11 months. Cooley had helped develop Jockey's highly successful line of women's undergarments, Jockey for Her. He was named Danskin's chairman of the board in August 1995.
Mary Ann Domuracki was named the next CEO in April 1996; she had been the company's chief financial officer and president. At the time, sales were about $125 million a year and slipping as the company struggled under a massive $40 million debt. Observers traced the beginning of the company's crisis back to $6 million in loans made to help Esmark finance a fitness start-up company that had failed.
Renewed Focus in 1999
Sales fell 42 percent to $88 million in fiscal 1999. In the summer of 1999, Carol Hochman succeeded CEO Cathy Volker, formerly president and CEO of Hanes Hosiery, who had taken the position in early 1998. Hochman had been the head of Liz Claiborne Accessories. She set out to refocus Danskin on its core strengths in fitness and dancing. She steered the company away from courting department stores, reported Sporting Goods Business, back toward its traditional base of sporting goods and specialty stores. Within a couple of years, sporting goods, specialty, and department stores were each accounting for about a third of sales. In 2001, Danskin began shipping product to the Target chain of discount stores.
Hochman closed 11 of Danskin's own stores and scaled back seven others. The company had begun importing knit items from Turkey; it continued to produce certain lines at its plant in York, Pennsylvania. The product lineup included "Everywear," a hybrid of activewear and casualwear.
The Pennaco hosiery division was winning sales with niche-oriented specialty hosiery. Pennaco's advanced technology made it possible to incorporate new types of satin and lace detailing with these. The number of different hosiery offerings, however, was being reduced.
In the fall of 1999, Danskin brought out a line of yoga clothes in collaboration with distributor Spa Concepts Inc. Called Zen Sport, the clothes were made from earth-friendly materials like organic cotton and fibers from recycled soda bottles. Items included hoodies, Capri pants, drawstring pants, and tank tops with sewn-in bras.
Danskin partnered with two legendary names in the New York dancing world. Danskin helped the Radio City Rockettes celebrate their 75th anniversary in 2001 by sponsoring a multi-city tour offering dance lessons to girls aged 10 to 18. The next year, Danskin became the exclusive licensee for a line of contemporary dance apparel from the New York City Ballet. CEO Carol Hochman told Sporting Goods Business the company had spent a year developing seamless leotards in cotton Lycra for the troupe. Danskin also developed a unique cotton/CoolMax fabric called O2 Performance.
Fitness guru Denise Austin was signed up as a workout clothing endorsee in late 2001. For her, Danskin developed a line of fitness tights, which premiered on QVC, featuring figure-flattering mesh control panels. The company also brought out a zip-front bra. Moreover, Danskin continued to try fitness-related brand extensions, including a $150 weight bench for women in 2003, which retailed on QVC and in The Sports Authority retail stores.
In October 2003, Pennaco Hosiery was sold to a group (JBT Legwear LLC) led by that division's vice-president and general manager, Barry Tartarkin. The purchase included rights to sell hosiery under the Round the Clock, Ellen Tracy, Evan Picone, and Givenchy brands, plus private labels.
Principal Competitors: Adidas-Salomon AG; NIKE Corporation; Reebok, Ltd.; Sara Lee Branded Apparel; Weekend Exercise Company.
Further Reading:
- Botham, Peter, "Danskin Inc. Cuts Work Force," York Daily Record (Pennsylvania), April 13, 2000, p. E1.
- Cuff, Daniel F., and Stephen Phillips, "Suitor of Esmark Plans to Broaden Its Lines," New York Times, June 11, 1986.
- "Danskin Keeps on Dancin' Despite Financial Woes & Media Knocks," Sporting Goods Business, October 1996, p. 8.
- "Danskin Targets Discount Crowd," WWD, March 23, 2001, p. 14.
- Dolbow, Sandra, "Danskin Lassos Tartarkin in Bid to Boost Biz," Brandweek, May 29, 2000, p. 70.
- Feitelberg, Rosemary, "Hochman Aims to Shape Up Pennaco," WWD, August 16, 1999, p. 16.
- ------, "Hochman Joins Danskin as CEO," WWD, June 2, 1999, p. 2.
- ------, "Hochman Takes New Steps at Danskin," WWD, August 3, 2000, p. 10.
- Furman, Phyllis, "Exec's Grand Plan Unravels Danskin," Crain's New York Business, August 15, 1994, p. 1.
- ------, "Troubled Danskin Runs to Jockey for New CEO," Crain's New York Business, September 26, 1994, p. 35.
- Grieves, Robert T., "Stretching the Image," Forbes, April 18, 1988, p. 99.
- Grish, Kristina, "Danskin to a Different Beat," Sporting Goods Business, January 19, 2000, p. 20.
- Hasty, Susan E., "Congrats, Danskin," Apparel Industry Magazine, April 1994.
- Karimzadeh, Marc, "Tartarkin Buys Pennaco," WWD, October 27, 2003, p. 9.
- McLaughlin, Patricia, "Designing Fashions for Tranquility," Plain Dealer (Cleveland), October 14, 1999, p. 5F.
- Sullivan, Mark, "Danskin's New Choreography: Carol Hochman Is Returning Danskin to Its Heritage As a Core Supplier to Sports Stores," Sporting Goods Business, January 2002, pp. 46f.
- Zuckerman, Laurence, "When a Good Name Falls Short; Debt and Executive Turmoil Keep Danskin Hobbling," New York Times, August 16, 1996, p. D1.
Source: International Directory of Company Histories, Vol.62. St. James Press, 2004.
