Spanx

Last updated
Spanx, Inc.
Company typePrivate
Industry Apparel
Founded Atlanta, Georgia, U.S.
(February 15, 2000 (2000-02-15))
Founder Sara Blakely
Headquarters
Atlanta, Georgia, U.S.
Area served
United States
ProductsPantyhose, hosiery
RevenueIncrease2.svg est. $400 million (as of June 30, 2018) [1]
Number of employees
750
Parent Blackstone Inc.
Website spanx.com

Spanx, Inc. is an American underwear maker focusing on shaping briefs and leggings, founded in Atlanta, Georgia. [2] The company manufactures mainly pantyhose and other underwear for women and, since 2010, produces male underwear as well. [3] Spanx specializes in foundation garments intended to make people appear thinner or more shapely.

Contents

History

Founding

Sara Blakely founded Spanx in 2000. Sara Blakely.jpg
Sara Blakely founded Spanx in 2000.

Following her graduation from Florida State University (FSU) in 1993, Walt Disney World Resort employee Sara Blakely joined local stationery company Danka to sell fax machines door-to-door.[ when? ] [4] [5] In the heat and humidity of Florida, she tried unsuccessfully to find pantyhose that did not have seamed toes and that did not roll up the leg after she cut them. [6]

Investing her life-savings of $5,000, she moved to Atlanta at age 27, where she researched and developed a hosiery concept predominantly on her own. The creation of the initial product prototype was completed over the course of a year and involved Blakely, her mother, and her friends personally testing the garments. Blakely's research revealed that the industry had previously been using the same size waistband for all hosiery products to cut costs, and a rubber cord was inserted into the waistband. For her product development, Blakely created different waistbands to suit different-sized consumers. [7]

When determining the brand name, Blakely knew that Coca-Cola and Kodak were two of the most recognized brand names in the world, and that both contained a strong "k" sound. Blakely read that the founder of Kodak liked the sound so much that he used it as the beginning and end of his brand name and then proceeded to create a functioning word based upon this foundation. The name "Spanks" eventually came to Blakely, and she decided to replace the "ks" with an "x", as her research had shown that constructed names were more successful and were easier to register as a trademark. [7]

Launch

In 2000, Blakely launched the Spanx brand from her apartment, [8] undertaking all initial calls and marketing herself. Her boyfriend at the time, a healthcare consultant, later resigned from his job and joined Blakely in the running of the nascent business. [7]

Blakely previously conducted a meeting with a representative of the Neiman Marcus Group, at which she changed into the product in the ladies restroom in the presence of the Neiman Marcus buyer to prove the benefits of her innovation. [9] Blakely's product was sold in seven Neiman Marcus stores as a result of the meeting; [7] Bloomingdales, Saks, and Bergdorf Goodman soon followed. [10]

2000 onwards

Following the establishment of the company, Blakely's then-boyfriend eventually became Spanx's chief operating officer (COO) and met Laurie Ann Goldman at the Saks Fifth Avenue in Atlanta in 2001, while she was on maternity leave from her employer at the time, Coca-Cola. Goldman was specifically looking for a Spanx product, and the pair exchanged contact details—Goldman became the CEO of Spanx in 2002. [11]

Writing for Fortune magazine in February 2014, Colleen Leahey identified Goldman as a key aspect of the company's successful growth:

Goldman crafted a business model for the company based on lessons she learned during her 10-year stint at Coke: thinking big, starting small, and scaling fast. She advised her team at SPANX to focus on product quality over profit margins. “Every time somebody puts on a SPANX product, one of two things can happen: Our brand can get stronger, or our brand can get weaker. We gain leverage or we lose leverage.” [11]

In the first half of 2014, Blakely worked on building the company's first standalone retail stores in shopping malls along the East Coast of the U.S., and also introduced denim to an expanding Spanx product line for the "Fall" range in March. [12]

Goldman resigned from the company in February 2014, after over 10 years at the head of the Spanx. [11] Gregg Ribatt, who had previously worked as an executive for Bennett Footwear, Stuart Weitzman Holdings and Collective Brands' Performance & Lifestyle Group, was appointed as interim chief executive officer. Ribatt's appointment generated discussions about a potential footwear expansion by Spanx according to a statement Blakely made in October 2013 explaining her ambition to design the world's most comfortable high-heel shoe prior to retirement. [13]

In Blakely's June 2014 Forbes profile, the publication claims that the company generates "over $250 million in annual revenues and net profit margins estimated at 20%", while Blakely is very strongly committed to maintaining the private status of Spanx. [12] However, speculation arose about a possible IPO following Goldman's resignation. [13]

In July 2014, Jan Singer, formerly of Nike, joined Spanx as CEO. [14]

In April 2020, Spanx owner Sara Blakely partnered with longtime friend and restaurant owner Justin Anthony to feed frontline workers to fight the coronavirus. Workers at Atlanta's Children's Healthcare and its associated clinics receive free typical South African meals. [15]

It was announced on October 20, 2021, that Sara Blakely, owner of Spanx, had sold a majority stake in the business to Blackstone. [16] [17] The company was valued at 1.2 billion US dollars. [18] The deal was prepared by an all-female investment team from Blackstone, and it was announced that the Board of Directors would be all-female under Sara Blakely as the Executive Chairwoman.

Products and marketing

Products

Spanx Shaping Pantyhose Super Control Sheers Spanx Shaping Pantyhose Super Control Sheers top front.jpg
Spanx Shaping Pantyhose Super Control Sheers

The brand produces lines with names such as "Bod-a-Bing!" and "Hide & Sleek." In 2009, Spanx launched a deluxe collection called "Haute Contour" that included items such as a lace thong with waist reinforcements and color options like pink. Following the release, Blakely explained, "I said, 'Let's make it beautiful ... like shapewear in disguise.'" [19]

Spanx started manufacturing body-shaping undergarments for men ("Spanx for Men –MANX") in 2010, [20] [21] and then introduced denim to an expanding Spanx product line for the brand's "Fall" range in March 2014. [12]

Marketing

During the inception of Spanx, Blakely was contacting friends and acquaintances, including those from her past, and asking them to seek out her products at select department stores in exchange for a check that she would send to them by mail as a token of appreciation. [7] However, Spanx received a marketing boost shortly afterwards, when Oprah Winfrey endorsed the product as one of her "Favorite Things" on her television show in 2000. [22] Prior to officially establishing the company, Blakely had sent a basket of Spanx products to Winfrey's television program, with a gift card that explained what she was attempting to develop, and this garnered Winfrey's attention. [7]

Winfrey's production team explained to Blakely that, while Winfrey usually only promoted the product itself, they sought to travel to Blakely's apartment in Atlanta and interviewed her in her home, as Winfrey was especially interested by the entrepreneur's story. At the time, Blakely was still a fax machine salesperson and needed to enlist the help of friends to act as employees for the purposes of the filming of the episode. [7]

Other celebrities who wear the brand are Gwyneth Paltrow and Jessica Alba. [19]

Blakely was later caught on CCTV by a department store repositioning her products so they were displayed more prominently. [23]

Corporate affairs

Ownership

Spanx is a private company and has not released financial information. Forbes estimates its value at $540 million in 2021. [24] Blakely owns the entirety of the brand and employed approximately 100 personnel as of 2011. [21] Goldman was the CEO of Spanx from 2002 to February 2014, when she resigned. [25]

Manufacturing

Highland Mills in Charlotte manufactured the prototypes presented to Neiman Marcus. [26]

In 2000, Blakely recruited friends to fill orders out of her Atlanta apartment.[ citation needed ] Because Highland had no interest in distribution, Blakely took Spanx production to a small mill in Siler City, which then went out of business.[ citation needed ] Acme-McCrary Corporation, a hosiery mill founded in Asheboro, North Carolina, in 1908, then took over production and distribution. Sales have grown from about $15 million in 2002, when Acme-McCrary began working with Blakely, to more than $400 million in 2014. The North Carolina firm is no longer the sole manufacturer of Spanx, but remains highly involved with Blakely in new product development, yarn specifications and manufacturing expertise.[ citation needed ]

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References

  1. ↑ Berger, Sarah (June 30, 2018). "Self-made Spanx Billionaire Sara Blakely Has Never Had Coffee—Here's How She Starts Her Day Instead". CNBC . Retrieved 11 June 2021.
  2. ↑ Inc. staff (2012-01-20). "How Sara Blakely Got Spanx Started". Inc. Retrieved 2021-05-14.
  3. ↑ Saint Louis, Catherine (2010-05-28). "Men's 'Shapewear' Is a Retail Hit". The New York Times. ISSN   0362-4331 . Retrieved 2021-05-14.
  4. ↑ "Sara Blakely Dared To Ask, 'Why Not?'". Inc. January 20, 2012. Retrieved March 8, 2012.
  5. ↑ "FSU celebrates women entrepreneurs". Florida State University News. 2015-03-12. Retrieved 2021-05-14.
  6. ↑ David L. Kurtz (January 1, 2010). Contemporary Marketing 2011. Cengage Learning. pp. 423–. ISBN   978-0-538-74689-2 . Retrieved January 29, 2013.
  7. 1 2 3 4 5 6 7 "Spanx Founder Sara Blakely Dared to Ask, 'Why Not?'" (Video upload). Inc. Monsueto Ventures. 1 December 2011. Retrieved 8 June 2014.
  8. ↑ "Spanx company info". Hoovers. D&B.
  9. ↑ ABC News: "Spanx Founder Reveals How to Build a Billion-Dollar Business" By MELIA PATRIA November 29, 2012
  10. ↑ Forbes: "How Sara Blakely of Spanx Turned $5,000 into $1 billion" by Clare O'Connor March 14, 2012
  11. 1 2 3 Colleen Leahey (11 February 2014). "SPANX CEO out after building the mega-brand". Fortune Magazine. Fortune. Retrieved 8 June 2014.
  12. 1 2 3 "Power Women > #93 Sara Blakely". Forbes.com. June 2014. Retrieved 8 June 2014.
  13. 1 2 Carla Caldwell (13 February 2014). "Spanx CEO steps down". Atlanta Business Chronicle. American City Business Journals. Retrieved 8 June 2014.
  14. ↑ Clare O'Connor. "Billionaire Spanx Founder Hires Nike Head Of Apparel As New CEO". Forbes.
  15. ↑ Martinez, Astrid (23 April 2020). "Local restaurant and Spanx owner team up to feed frontline workers". CBS 46. Archived from the original on August 8, 2021. Retrieved 5 May 2020.
  16. ↑ Forbes: October 20th, 2021: Sara Blakely is a billionaire again after selling a majority of Spanx to Blackstone
  17. ↑ Fortune:October 26th, 2021:Sara Blakely celebrates Spanx majority sale to Blackstone giving all employees first class plane tickets and $10,000 bonus checks
  18. ↑ "Blackstone buys majority stake in SPANX, Inc". Blackstone press releases. 20 October 2021. Retrieved 2021-11-14.
  19. 1 2 Dodes, Rachel (November 5, 2009). "Shapeware Has Women Bent Out of Shape". Wall Street Journal. Retrieved July 4, 2011.
  20. ↑ "Spanx brand spanking new line for men". People. February 4, 2010. Retrieved July 5, 2011.
  21. 1 2 Drell, Laura (February 2, 2011). "My First Million: Sara Blakely, Spanx". AOL Small Business. Archived from the original on February 20, 2020. Retrieved March 8, 2012.
  22. ↑ "How'd They Do that?". Oprah. February 1, 2007. Retrieved July 4, 2011.
  23. ↑ "'Why Not?' inc. talk by Sara Blakely, section: 'growing the business' ~4:40sec".
  24. ↑ Wang, Jennifer. "Spanx Is Reportedly Shopping Itself For $1 Billion, But Forbes Estimates The Shapewear Firm Is Worth Far Less". Forbes. Retrieved 2021-10-25.
  25. ↑ Moin, David (February 11, 2014). "Spanx CEO Laurie Ann Goldman Exits". Women's Wear Daily. Retrieved February 11, 2014.
  26. ↑ Clare O'Connor. "Spanx Inventor Sara Blakely On Hustling Her Way To A Billion-Dollar Business". Forbes.
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