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LUXURY HOSIERY RETAILER WOLFORD IS TO ROLL OUT MORE BOUTIQUES ACROSS THE U.S.

By Molly Knight

The Mercedes-Benz of women‘s hosiery is revving up for a major U.S. expansion. It‘s about time, some might say. Ten years ago Bregenz, Austria—based Wolford opened a boutique on New York City‘s Madison Avenue. Since then, the luxury tights retailer has set its growth sights largely on the other side of the Atlantic. Of the chain‘s 223 boutiques worldwide, only 23 are in the U.S. These boutiques around the globe account for 45 percent of Wolford‘s total sales. (Multibrand retailers, department stores, factory outlets and private-label business account for the rest.)

The boutiques were very successful last year, so Wolford officials say they hope to boost the worldwide unit count to 300 by 2010. Much of the expansion will involve doubling the U.S. store count. “We‘re hoping to have 45 boutiques [operating] in the States in three years,” said CEO Holger Dahmen. “It‘s a tough target, since we‘re not part of a large luxury conglomerate that can aid with our plans. We‘re small, but we‘re mighty.”

At the end of its fiscal year, ended April 30, Wolford reported that same-store sales had risen 17 percent across the chain from the previous year. Its shares climbed accordingly, the company said, by nearly 81 percent. A sales increase of 28.4 percent in the U.S. fueled Wolford‘s expansion plans stateside.

“Two years ago we didn‘t know if our marketing plans and development strategy were working, but now we know they are,” said Dahmen. “Twenty-three stores is not the end of our imagination. There is vast potential for future growth in the States.”

The Wolford fleet comprises 81 company-owned boutiques and 142 franchised units. The company plans to maintain this ratio going forward and is seeking U.S. franchisees, Dahmen says. “We‘re targeting major cities across the country,” he said. “We‘re looking very closely at Chicago, Los Angeles and San Francisco, for starters.”

At 700 to 1,200 square feet, the boutiques will be larger than Wolford‘s roughly 600-square-foot current units, Dahmen says, because the company has expanded its offerings to include swimsuits, lingerie and ready-to-wear items. One 709-square-foot store is to open this fall in The Shops at Columbus Circle, at the Time Warner Center, New York City.

“We have a high demand for luxury goods, and Wolford meets that,” said R. Webber Hudson, executive vice president of Related Urban Development, a subsidiary of The Related Cos., the New York City firm that operates Shops at Columbus Circle. “A great percentage of my shoppers are affluent, highly educated women. I need to build into that and offer stores relevant to my customer.”

Hudson says Shops at Columbus Circle posts well above $1,500 in yearly sales per square foot and that Wolford should be able to exceed that. “Every new tenant I add has to go way above that number so we can continue to improve our average sales,” said Hudson. The proposed store will be adjacent to high-end women‘s shoe store Stuart Weitzman.

Hudson says he was intrigued by Wolford‘s ad campaign showing a woman in leg wear standing next to a woman in a smart business outfit. “People know Wolford as a hosiery boutique, but the ready-to-wear tops and separates really got our attention,” said Hudson. “The versatility of pieces gives our shopper quite a bit to get excited about.”

Dahmen describes the Wolford customer as a financially independent woman with good taste and sufficient money to spend. “Age isn‘t as important as income, but we know from our numbers that she‘s between 40 and 50 years old in the U.S.,” said Dahmen. “Our customer is slightly younger in the U.S. and the Netherlands than she is in Germany, for some reason.”

Wolford women are fashion-forward and care about pairing the right hosiery with the right skirts and blouses, says Christine Szalay, director of marketing at NorthPark Center, in Dallas, where Wolford has a boutique. “Ladies here in Dallas are so style-conscious, and they pay great attention to detail,” said Szalay. “When you look at what they carry, it‘s really quality leggings, tights and garments that enhance current styles. Their salespeople always put the right item on the right customer.”

For this year‘s autumn and winter collection, Wolford rolled out a line of lounge wear that features leggings, trousers, kimonos, pullovers, dresses and tops. Wolford also offers belts, scarves, handkerchiefs, bathing suits, business wallets and briefcases.

Victoria‘s Secret may have a monopoly on the U.S. ladies undergarment sector, but there is a lot of room for a competitor with a higher-end, toned-down feel, sources say.

“They‘re kind of the thinking sexy woman‘s Victoria‘s Secret,” said Robert K. Passikoff, president of Brand Keys, a New York City—based retail consulting firm. “There‘s nothing wrong with Victoria‘s Secret, but there are a lot of women who might not be entirely comfortable with its obviously sexual image. They‘re not necessarily targeting a different category; it‘s an issue of how people in that category behave differently. Wolford isn‘t as blatant. A more conservative, maybe slightly older woman would probably feel more comfortable with the Wolford image of classy with an overseas flair.”

Wolford is doing the right thing in expanding across the U.S., Passikoff says. “There are a lot of people here who will really like what they have to offer once they get a chance to see it, and expanding your foothold in the marketplace is always good,” he said.

An important part of the U.S. expansion strategy was that broadening of the Wolford offerings, Dahmen says. “The luxury market for tights is really thin, so I‘m hard pressed to really think of any competitors in that sector,” Dahmen said. “We‘re trying to expand our positioning, which is why we added ready-to-wear, lingerie and swimwear. Obviously, there are many competitors there, but I don‘t want to get into naming them.”

Others are less reluctant to name names, however: Ann Taylor, Banana Republic and Sigrid Olsen are but a few of them, says Passikoff.

To compete across the luxury market, Wolford has sought to solidify its international credibility in the design world, sources say. In mid-2006, Wolford tapped A-list designer Zac Posen to do a line of midnight blue, black and blood-red leg wear and body wear made of Lycra. The Zac Posen for Wolford line was such a hit that Wolford announced it would run for four seasons, through next spring and summer. Wolford also plans to offer items from Italian couture designer Valentino this fall. These partnerships with big-name luxury designers is a savvy move, some say.

“A typical American woman who shops in luxury stores might not have heard of Wolford yet, but she‘s probably heard of Zac Posen, and she‘s definitely heard of Valentino,” said Passikoff. “That kind of thing makes it kind of like, ‘OK, they must obviously know what they‘re doing.‘ ”