The Montreal Gazette, December 10, 2003
Dynamic lingerie excites customers and stock brokers
By Warren Perley
As the catwalk descended mechanically from the cavernous ballroom ceiling, we were enveloped in the sights and sounds of the La Senza "experience." Models trolled the runway in strings, thongs, babydolls, bras, bustiers, merry widows, panties and sleepwear.
Nine elegant women, most of them sales managers from La Senza stores in Vancouver, bantered about the latest fashions as they sat with me around our linen-clad table, sampling gourmet food and sipping wine. Ours was one of about 60 round tables at the Sheraton Laval Hotel filled to capacity by La Senza managers flown in from around the world to preview the Christmas season of lingerie heading for La Senza stores.
For those whose ocular senses couldn't register the fashion panorama in one visual sweep, there were eight huge video screens at the front of the hall conveying runway scenes from different angles, flashing hot colours and sculpted muscle amid eclectic strobes.
The rush of hot air and sweet scents washed over me as the video screens flashed visuals of the models intermixed with the La Senza party lexicon - "Sexy Glam."
Nothing in the company's annual report had prepared me for the heart-pounding La Senza "experience." The statistics tell of the La Senza success, but its staff speaks of its passion. Since its founding in 1990, this passion has helped to propel La Senza into the position of dominant lingerie retailer in Canada with in excess of $340 million in annual sales. Including the 20 countries outside Canada where it has retail outlets, annual sales jump to about $650 million.
In Canada, there are 209 La Senza stores - 19 of them in Quebec - with exclusively-designed fashion products ranging from bras, sleepwear, panties and accessories to luxury lingerie collections. Its 77 La Senza Girl stores - 10 in Quebec - are intended as a shopping destination for tweens aged 7 through 14. For those seeking fashionable apparel for women, 34 anne.x stores - seven of them in Quebec - cater to a core market aged 25 to 40. In addition to its stores in Europe, Asia and the Middle East, La Senza took the plunge this year into the U.S. market, where stock analysts are keeping a close eye on sales at the five outlets it opened in the northeast.
Lingerie is a multi-billion-dollar business worldwide and a growing market segment of apparel manufacturing. You know you've made it as an industry when Super Bowl XXXVIII will broadcast a live pay-per-view tackle football contest between two teams of lingerie-clad models during halftime of the big game next Feb. 1.
Another indication that lingerie has gone mainstream was a story in the Nov. 6, 2003 edition of the New York Times which described courses offered to women in France by professional striptease artists demonstrating how to reveal their new lingerie to their significant others. The New York Times concluded that "women's underwear has evolved into a full-fledged fashion statement, items to be shown off, not hidden under something else." From its humble beginnings 13 years ago, La Senza has evolved into a successful organization with a brand name recognized worldwide and 5,700 "associates," such as the 600 store managers at the fashion show, who brim with a sense of panache, passion and fun.Genesis of a CEO
A large part of the success of the organization is due to Irv Teitelbaum, CEO and co-founder. To understand the deep, local roots of La Senza's CEO and the stamp he has put on the international corporation he leads, you must travel back 4 1/2 decades to the late 1950s.
The Teitelbaum's two-storey brick corner home, with its huge backyard and rows of apple trees, was the headquarters of most play activities on Clinton Ave., a sleepy street in the Côte des Neiges district bordering Outremont.
Irv was different than the other kids - cerebral, meticulous and focused. While other children played "keepers" with their marbles, he collected stamps and studied chess moves. While they read comic books, he perused the classics and history textbooks.
Even before he had outgrown his short pants, Irv had the mind of an adult. His parents were astounded when neighbours would ring the front doorbell looking for their young son to discuss the political and social issues of the day.
His dad, Nathan, a voracious reader who followed politics, and his mother, Esther, had immigrated from Warsaw just after the First World War. The Teitelbaums lost many family members in the Holocaust, and it's with this environment as a background that Irv forged a keen sense of politics and a social conscience. Even today, as CEO of a major corporation, he is prone to digress during a casual business conversation to expound on the benefits of socialized medicine for those in financial need. His company supports numerous charities, including cancer research, women's shelters and children's causes.
He has maintained his sense of family and loyalty to colleagues as the principal gauges in a moral compass that never strays from the straight and narrow - albeit the more difficult - business path. This rectitude has served him well in attracting top talent such as Laurence Lewin, who continues to play a pivotal role as co-founder and president of La Senza.
With his rogue's sense of humour and his peripatetic sense of adventure, Lewin is like a British version of Holden Caulfield, the protagonist in J. D. Salinger's The Catcher in the Rye. Like Caulfield, he is sophisticated, articulate and ever so slightly off key - quite delightful, in fact. He can crack one-liners or turn an amusing anecdote in the midst of quoting price/earnings ratios and culling statistics from the Canadian Soft Goods Index which show that La Senza has 31 per cent of the Canadian lingerie market in the 15-to-29 age group.
He delights in regaling visitors with anecdotes about his grown son, Michael, whose company, Wood Floats Multimedia, produces videos. Ask him the secret of La Senza's success and he'll tell you: "a flat management organization, empowerment of executives and short lines of communication."President loves his Harley
He owns a London cab and an antique fire truck with a functioning water pump, which he takes to parades and children's events. Weather permitting, he drives to work on a 1,350-cc Harley Davidson '94 Road King.
Is it any wonder that the La Senza ladies love working with him? To them, he is not the president or Mr. Lewin or, for that matter, even Laurence. He is Laurie.
Colour him high-profile, gregarious, self-effacing and wickedly funny. Turn on the television and you might catch him bumbling on one of Venture's Back to the Floor segments, featuring executives going back to the basics in their companies while camera crews follow them around, recording their follies and jollies.
He was sighted recently at the V.I.P. opening of Cinémania, a virtuoso annual French-language cultural film festival with English subtitles, founded by Maidy Teitelbaum, Irv's wife.
But behind the high profile and charming façade is a keen business mind, a man who traded in his accounting degree and a career in computer industry management for a chance to help build a neophyte lingerie line into a prominent international brand.
Lewin started with the organization in 1987 as vice-president in charge of merchandising at Suzy Shier, a clothing chain co-founded 21 years earlier by Teitelbaum and his brother-in-law, Stephen Gross, with the first store opening in Sherbrooke. Teitelbaum had bigger plans for Lewin, however, and, in 1990, put him in charge of the newly founded La Senza lingerie division of Suzy Shier, which had its head office in Montreal.
For his part, Lewin describes Teitelbaum and Gross as businessmen with "tremendous reputations for integrity and correctness." It is this sense of respect, integrity and family values which permeate the entire organization.All in the family
The fact that La Senza has a family-like environment should come as no surprise. Teitelbaum's son, Joel, is in charge of La Senza's international division with over 175 stores under license in 20 countries and is responsible for the company's e-commerce through lasenza.com. His daughter, Carole, has been a senior merchandiser at the company for over 15 years and is executive vice-president of the anne.x division.
Teitelbaum started his own retail career in a family business when he married his sweetheart, Maidy Shier, in 1960 and went to work in her dad's department store in the Quebec town of Lac Mégantic near the Maine border. Six years later, Teitelbaum and Gross, who is married to Maidy's sister, started their own successful chain of young women's apparel under the trade name of Suzy Shier. By the mid-'90s, it had grown to 258 stores, located mostly in malls, in every province across Canada.
In 1984, Suzy Shier bought into Wet Seal Inc., a California-based retail chain of contemporary fashion apparel and accessory items for juniors. Under Teitelbaum's direction, Wet Seal went public in 1990 to fund an expansion. It now has 623 stores in 47 states.
In 1990, Teitelbaum, Lewin and their "design launch" team started a lingerie division within Suzy Shier. They chose as its name "Senza," one of the monikers they had registered as a protected trademark. Senza in Italian means "without," which seems an entirely appropriate name for a scanty fashion item such as lingerie. To feminize the name, they added the article "la" as in La Senza.
By 2000, the La Senza lingerie division, which had gone public in 1993, had become the core business at Suzy Shier Ltd., and Teitelbaum made the decision to change the name of the company to La Senza Corp., with Suzy Shier becoming a division.
Last July, La Senza severed its relationship with the Suzy Shier division, selling it to private interests with an eye to concentrating on its core business of fashion lingerie. La Senza, Teitelbaum and Gross still hold substantial interests in the U.S.-based Wet Seal, with Teitelbaum retaining the title of chairman of the board.
Gross's close working relationships with Canadian and international suppliers have been a critical springboard in La Senza's growth and provide continuity in the all-important supply chain.
It's little wonder that investment dealer Jennings Capital has a "buy" recommendation on La Senza Corp. stock which trades on the Toronto Stock Exchange under the ticker symbol of LSZ. Like a grand chess master, Teitelbaum and his brain trust have deftly transformed and then unloaded a declining apparel company known as Suzy Shier in exchange for La Senza, a dynamic lingerie company with an international cachet and huge growth potential in the U.S.
Cynthia Rose-Martel, a broker with Jennings Capital, sees the biggest challenge and opportunity for La Senza in the U.S. market, where they have five stores in New Jersey, New York and Boston.
"The reason they got rid of Suzy Shier was part of the strategy to turn the company into an international brand," Rose-Martel said in a recent telephone interview from Toronto. "They are doing it successfully, but they have to be in the U.S. to continue on that track."
The stock is trading at about $13 a share based on earnings of $1.02 per share, she said. Increased earnings could bring the projected trading price up to $18.40 a share in 12 months, she added.
Rose-Martel said she expects the company's share price, which has hovered between $9.50 and $14 for the last year, to "move up quickly" when investors recognize their presence in the U.S. market in 2004.Broker gives her vote
"I am confident that they can pull it off," she said. "This is a debt-free company which is sitting on cash investments. They have 20 years of retail experience in the U.S. market through Wet Seal, and the retail dynamics in the U.S. are similar to Canada's." Lewin would like to see the stock trading at a P/E ratio of 20/1 once the U.S. expansion is in full gear.
La Senza's rollout in the U.S. will be faster than it was in Canada, he said, where of the 209 company stores, only nine, including Marché Centrale, are big-box outlets in excess of 15,000 square feet. There are 15 new big-box stores planned for Canada.
Teitelbaum is a master tactician in terms of scouting retail locations, negotiating leases and setting up financing - vital skills which will be needed for a successful foray into the U.S. Lewin compares Teitelbaum, who attended McGill University before transferring to Sir George Williams College (the forerunner of Concordia University) to graduate with a bachelor of commerce degree in 1960, to "a racehorse quivering to take a run at expansion financing - the faster the rollout, the more capital is required."
Lewin notes that there are 2,400 regional malls, of which probably 1,200 are eminently suitable for sites of future La Senza stores. Ultimately, the chain is seeking to set up 500 outlets south of the border, which would bring them into direct competition with others in the field, such as Victoria's Secret, the doyenne of lingerie retailers in the U.S. with about 1,000 outlets and annual revenues in excess of $3 billion.Lingerie with a difference
As in Canada and elsewhere in the world, Americans are in for a pleasant shopping experience at La Senza. The company places a heavy emphasis on producing exclusive styles and designs using superior fabrics manufactured under exacting standards. The end result is a high-quality product brought to market at a surprisingly affordable price.
Aside from modest price points, U.S. clients will note a heavy emphasis on co-ordinated daywear and sleepwear - garments that are comfortable and still very sexy.
La Senza invests a lot into making its stores trendy, yet cozy - large, private fitting rooms with mirrors, and bathrobes made available for clients to wear between fittings. Surprisingly, statistics show that up to half of all women wear the wrong bra size, so trained personnel are always on hand to measure and help customers find the optimum bra style and size for their body types.
"We want to create a superior shopping experience so that people come back," Lewin said. "Our job is to make shopping in our store a fun experience and to support our customers totally."
There is a no-questions-asked, money-back guarantee on any merchandise returned within 21 days of purchase. "We always do right by the customer," Lewin said. "We totally support our managers in any decisions which they feel are necessary to make our clients happy."
For many clients, such as Montreal model Sofia de Medeiros, the La Senza brand has become a family affair with Sofia, her mom and her sister, all loyal customers.
"I love the quality and uniqueness of La Senza's merchandise," De Medeiros said in a recent interview. "The way they use styles, colours and laces is very trendy. And they always have undergarments which match the outerwear trends of the season. That's what fashionable women are looking for." Even men, such as Liam de Silva, a professional soccer player, can be found shopping for gifts at La Senza where he can rely on expert advice from staff.Lewin has the team
Lewin has a closely-knit management team which he relies on heavily - Caroline Sacchetti, executive vice-president in charge of buying, design and merchandising; Karine Wascher, senior vice-president of marketing; and Anne Pitts, senior vice-president of operations.
Pitts, who started with the Suzy Shier division, oversees the entire network of dedicated sales staff across the country. She relies on regional directors, such as Gloria Reda in Quebec, to keep the La Senza passion and drive for customer service at the forefront.
Pitts and Reda are examples of the upper management team who have all been promoted from within the ranks. For example, Reda started as a sales manager 10 years ago at La Senza's Montreal Trust outlet.
"We pride ourselves on the passion we have for our careers," Reda said in an interview. When hiring management personnel, La Senza looks for people with a good sense of business, fashion knowledge, and retail experience. "We also look for people who are great motivators and who can help staff develop."
Another aspect of the La Senza management style is the empowerment that each vice-president enjoys while, at the same time, working closely with colleagues. Sacchetti, Wascher and Pitts appear to be a seamless fit in Lewin's grand strategic mosaic for La Senza's expansion.
Sacchetti was the first person hired by Lewin to start work at La Senza on May 1, 1990, after having helped launch another lingerie company previously. Anything to do with design, buying and merchandising passes through her, including product and technical development.
She is heavily involved in store design and visual merchandising, travelling to Europe at least six times a year to research fashion trends, as well as fabrics and prints. "Our challenge is to bring the fabrics and designs to market at an affordable price," she said in an interview. "La Senza is a shopaholic's heaven without the guilt - our lingerie lines are very affordable."
Sacchetti works closely with La Senza's design team, which she describes as "extremely talented."
Once Sacchetti and the buying team have come up with the new product lines, it is up to Wascher and her marketeers to devise strategies to inform the public of La Senza's new offerings.
Most of her marketing budget is used on in-store signage and promotions, which include visually stimulating window displays and new promotions every two weeks. They produce an in-house publication which is a cross between a magazine and a catalogue. Called a "magalogue," it is available to customers in each La Senza store.
Statistics bear out the efficiency of Wascher's campaign - La Senza is the No. 1 retailer of bras in Canada in the 15-to-29 age group, with 30 per cent of the market.
Lewin refers to his results-oriented management as his "team of enthusiasts" who have put together a massive cache of intellectual property touching on concept designs, production, distribution, merchandising and marketing.
"It's only natural that we should want to share the La Senza experience with our U.S. neighbours," Lewin concludes with a smile.
Warren Perley, a former career journalist, is president of Ponctuation Grafix, a marketing and graphic design studio (www.ponctuation.com).