Spanx queen firms up the bottom line

Sara Blakely grew up wanting to be a lawyer like her father. Instead, she ended up working at Disney World, near her family’s Florida home, after flunking her Law School Admission Test – twice.

“I would see friends I hadn’t seen for a while and I’d be wearing these big Mickey Mouse ears with my name on,” she recalls. “They’d say, ‘Sara, is that you?’ And I’d reply, ‘yes, now get on the ride’.”

If the joke was on Ms Blakely then, a decade later she is having the last laugh.

The 35-year-old went on to launch a line of womens’ underwear with $5,000 of personal savings. Today, her company, Spanx, has annual retail sales exceeding $100m and a band of superstar customers including Oprah Winfrey and Gwyneth Paltrow.

Spanx specialises in tight-fitting Spandex underwear, dubbed “magic knickers” because of their ability to streamline lumpy flesh and hide panty lines. “They just squeeze you in,” Ms Paltrow once explained. “That’s how all the Hollywood girls do it.”

Ms Blakely’s success did not come immediately. After escaping Disney World, she spent seven years selling copiers and fax machines for Danka, the office equipment supplier. Her first sale – to the owner of an outdoor grocery stall with no electricity connection – provided an early indication of her entrepreneurial potential. “I bought him an extension cord and arranged for him to share a neighbour’s outlet so he could use a fax machine for orders,” she explains.

It was during this time that Ms Blakely chanced upon the idea that would change her life. Anxious to look good at a cocktail party she went shopping for “body-shaping” underwear that would be invisible through figure-hugging trousers. “Everything I found was dreadful,” she says.

For the next year, Ms Blakely spent evenings and weekends designing a range of user-friendly footless tights and girdles and researching how to make them. Unable to find a female patent lawyer and dubious about a man’s ability to grasp the concept, she bought a book about patents and wrote her own. When it came to searching for a manufacturer, men were just as hard to avoid. “I was shocked that only men seemed to make women’s undergarments,” she says, recalling dozens of cold calls to textile mills across the US south. “They all thought I was crazy.”

Disillusioned by the rejections, Ms Blakely considered abandoning the project. Then, one day in 2000 she switched on her hotel room television at a Danka sales convention and saw a discussion on The Oprah Winfrey Show on the inadequacies of traditional hosiery. “I jumped up from the bed and thought, ‘that’s my sign’,” she recalls. “I called the mills and said, ‘I’m coming in person. I believe in this and nothing is going to stop me’.”

Two weeks later, a mill owner in Charlotte, North Carolina, agreed to make the product after being convinced by his two daughters.

Persuading retailers to adopt Spanx was an easier task because most of their buyers were women. Ms Blakely first met with a representative of Neiman Marcus, the upscale department store, at its headquarters in Dallas. “I took her into the bathroom and did my own modelling. She agreed to try it in seven stores.”

Ms Blakely pleaded with friends and relatives near all seven locations to buy the product, promising to reimburse them. But her efforts to inflate sales proved unnecessary when she received a phone call from a producer on The Oprah Winfrey Show.

Ms Blakely had sent a complimentary set of Spanx underwear to Ms Winfrey to acknowledge her role in their creation. Immediately impressed, the chat show host named the product among her “favourite things of 2000” and sent a film crew to profile Ms Blakely. Thousands of orders started rolling in as soon as the segment was aired and Neiman Marcus and its rivals clamoured for stock. “From that second, I never stopped working,” says Ms Blakely.

In the six years since, Spanx has grown from the spare room of Ms Blakely’s Atlanta apartment into a 50-person operation based in the city’s glitzy Buckhead district. International expansion is under way in the UK and Canada and a lower-priced product line, called Assets, has been launched in US retail chain Target.

Ms Blakely decided four years ago to hand day-to-day control to a chief executive, and focus on product development and brand promotion. “I was eager to delegate my weaknesses. I’m a creative person so I wasn’t suited to shipping and fulfilment and inventory management.”

Like most things about Spanx, the search for a chief executive was unconventional. Laurie Ann Goldman, previously a licensing director with Coca-Cola, took the job after meeting Ms Blakely in the hosiery section of a department store. “She was complaining that there wasn’t the right sized fishnets,” recalls Ms Blakely. “I introduced myself and she ended up working for us.”

Blessed with long blonde hair, a giant smile and gregarious personality, Ms Blakely remains the public face of Spanx while Ms Goldman takes care of details behind the scenes.

Her biggest publicity coup came in 2004, when she was selected to take part in The Rebel Billionaire, a US reality TV show hosted by Sir Richard Branson, the founder of Virgin Group.

Ms Blakely finished as runner-up and was awarded $750,000 by Sir Richard to pursue her ambition to set up a charitable foundation. The Virgin founder was at Ms Blakely’s side in Atlanta in October when she launched The Sarah Blakely Foundation, which aims to promote education and entrepreneurship among women, starting with a project in South Africa.

In spite of her venture into philanthropy, Ms Blakely has no plans to disengage from Spanx altogether. She still owns 100 per cent of the company, which has been profitable and self-financing from the outset. “Everything has grown out of that original $5,000,” she says.

“When I started Spanx, my friends asked what my exit strategy was,” she recalls. “I told them my only strategy was to exit a room looking good in cream pants.”

SARA BLAKELY’S ADVICE FOR ENTREPRENEURS

■Start young: “When my Mum told me to tidy my bedroom I would take all my half-used Barbie lipsticks, put price tags on them and go door-to-door in our neighbourhood.”

■Be secretive: “I didn’t tell family or friends my idea for a year. When I revealed it, they came up with all sorts of reasons why it wouldn’t work. If I’d listened to that from day one I’d have given up.”

■Think like a consumer: “Mill owners were fixated on hosiery being seen on the leg. They didn’t understand that girls might want to hide it. I told them: ‘I’m a woman. Trust me’.”

■Use word of mouth: “Once women tried our products they got hooked and told their friends. Spanx makes women look a size smaller, so who wouldn’t want to tell their girlfriends?”

■Know when to let go: “Entrepreneurs are good at starting something from nothing but they’re not always the best person to take the company to the next level.”

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