For years, the lingerie industry has talked about challenger brands disrupting the traditional players in the market with more inclusive sizing, more accurate fit or better culture. Wacoal is kind of tired of hearing about it.
"It irks us all here that we've been doing all these, for lack of a better word, progressive and relevant things, for many, many years," CEO and President of Wacoal America Mitch Kauffman said. "We don't talk about it a lot: Shame on us. Then in the last few years, all these digitally native brands seem to be getting a lot of PR and doing things, frankly, that we've been doing all along."
Kauffman has been at Wacoal for five years (a little under a year as CEO), but he's been in the industry for 34, at brands like Maidenform and HanesBrands. He said he watched Wacoal for "many, many years" as a competitor, admiring the company's work, and tried to move over to Wacoal on many occasions. The timing wasn't right until 2016, when he joined as a vice president of sales, with hopes to eventually grow his role.
To him, this company is different.
"I've worked for public companies in the past where you're accountable to shareholders on a quarterly basis, and there's just tremendous pressure to make decisions that may not be in the best long-term interest of the business," Kauffman said. "At Wacoal, while we are a publicly held company on the Japanese Stock Exchange, we don't have those same kinds of short-term pressures. We develop a strategy, we invest in it, we stick with that strategy and we give it time to nurture and grow — and we just don't abandon things because we're not getting an immediate return."
While Wacoal ranks in the top 10 in terms of market share for women's underwear, according to Euromonitor International data from this summer, it's a quiet company. Wacoal doesn't have its own stores in the U.S., but prior to pandemic-induced bankruptcies, the brand was sold in over 1,200 department stores, as well as a number of specialty boutiques.
What casual retail observers might remember about Wacoal is that the company acquired DTC lingerie brand Lively for $85 million in a buzzy deal last year. It was unexpected, in some ways, for Lively's CEO and founder Michelle Cordeiro Grant, because, "we weren't for sale." When Wacoal came knocking, it was "a wonderful surprise," Grant said, and the two companies sat down to talk through corporate values and get to know each other before truly contemplating an acquisition.
"Personally, was it a hard decision? Yes, because I'm a first-time entrepreneur," Grant said. "I had never sold a company, I've never gone through that process. I didn't have a banker even in the process. I just kind of learned and thankfully had an amazing legal team that I worked with throughout."
Part of what Grant said she learned about was the corporate culture and the values that drive Wacoal, but it's a side of Wacoal that may be less obvious to customers. In part by choice.
"We wanted to take the road of 'the proof is in the pudding,'" Kristin DiCunzolo, vice president of marketing and Direct at Wacoal America said. The idea was that the company was "living, breathing, eating it," so it wasn't necessary to highlight from a marketing perspective, DiCunzolo said. "But perhaps there needs to be more exposure to the end customer, whose truth is based off of their last Instagram reel."
'Forget what the man thinks'
Grant says she remembers the day that she knew, really knew, she was going to make the deal with Wacoal happen. She visited the board in Japan and walked through a museum of company history, working backwards from its latest news to its very beginnings.
"When I got to the first couple of years looking through the initial logo, it was beauty and balance, and the logo looked just like Lively's," Grant said. "I was in the middle of Kyoto and I saw a logo that literally looked like something we created just five years ago that they created decades and decades ago."
The story is a unique one — and many acquisitions wouldn't go through if that was the bar for measuring business alignment — but it also represents broader commonalities between the companies. Both Kauffman and Grant described the culture as one of "mutual respect." It's a tenet that the founder brought with him when he created the business, Kauffman said, and has been ingrained in the culture since.
"When the company talks about mutual respect, it's between management and staff, it's between the staff and the company and suppliers, the staff and the company and customers. Anybody we have an interaction with, we are always looking for that mutual respect and treating people fairly," Kauffman said. "And I think if you went out into the industry, be it to our retail customers or our suppliers, and asked about Wacoal's reputation, they would tell you: We are the best in terms of how we treat our customers and our suppliers. We're fair."
That was important to Grant, as was the long-term view executives took. But she also saw opportunities for Lively's growth: in size expansion, since Wacoal's size range is much larger than Lively's, and in better benefits for employees and faster shipping since the company now shares warehouses with Wacoal. For Wacoal, the draw was interacting with a younger consumer and a more digital world, a must for most retailers.
"That's the shift that the category needed was, 'How do women feel in the products when they look at themselves?'"
Michelle Cordeiro Grant
CEO and founder of Lively
In the world of lingerie, where many companies continue to be run by men and Lively was hailed as a diverse startup changing the space, a suitor that was committed to those values wasn't a nice-to-have: It was a must. As the daughter of Indian immigrants, Grant said diversity and inclusion have always been a part of her life and are in the "DNA" of Lively.
Both Wacoal, which acquired Lively, and Wacoal America, a subsidiary of Wacoal, are committed to that ideal, Kauffman said. Although Kauffman runs Wacoal America at the highest level, 79% of the total employee base is women, 68% of its middle managers are women and 58% of senior executives at the company are women, the company said in October. The company says 53% of employees identify as Black, Hispanic or Asian, including 36% in middle manager roles and 33% in senior executive roles.
Kauffman is aware of his leadership position in an industry geared toward women and defines his role as giving the "broader guidance" for the company and relying on his employees to make other decisions.
"I want people to feel that they can come to me with any type of challenge or issue they might have. If they want advice, ask me for advice: That's what I feel that I'm here for," Kauffman said. "There'll be a time here and there where I say, 'No, we've got to do it this way because we've got whatever fiscal constraints or things like that. But in general, I want my team to make decisions that they're qualified to make."
DiCunzolo said Wacoal America's culture was also one of the main reasons she joined the company, having previously worked in ready-to-wear, and that she was impressed with the number of female executives the company had.
"They're there for a reason," Kauffman said of his top executives. "They've got that expertise and I trust them."
Lively, for its part, is 100% women, though the company has employed men before. Grant thinks that in the lingerie industry more broadly, startups like Lively have helped increase diversity substantially, as women have founded their own companies and shifted the focus away from how men view women and re-centered it around how women see themselves.
"We've been appealing to a wide variety of consumer body types and skin tones for many, many, many years — long before it became chic to do so."
CEO of Wacoal America
"That's the shift that the category needed was, 'How do women feel in the products when they look at themselves?' Forget what the man thinks — because if she feels good in it, he's gonna think she looks great," Grant said. "I think pushing women leaders to be the key stakeholders and decision-makers didn't happen as quickly as it has in the last five to seven years. But you can see there's a lot of change that's happened and a lot more that needs to happen."
One of the needs-to-happen items? Not segregating plus size anymore.
"We offer a busty bralette, and people are like, 'Oh, is that plus-size?' and we're like, 'No, it's actually just a bralette for women that have a D cup and up,'" Grant said. "We want to create more products for women with bigger chest sizes. For us, it's not a different section of the store or a different category. It's just more sizes."
And Wacoal can help with that.
'If I said 'lingerie' they heard 'push up''
Wacoal offers over 70 different, full bra sizes — and they have for years, according to Kauffman.
"I remember when, probably 15 years ago when I was with Maidenform, and Wacoal introduced really the first G cups into department stores. It had never really been done before by a significant brand," Kauffman said. "We've been appealing to a wide variety of consumer body types and skin tones for many, many, many years — long before it became chic to do so."
The company is somewhat neurotic about sizing. "We're about millimeters in terms of fit," DiCunzolo said. Wacoal has a team of about 80 fit consultants that, prior to COVID-19 at least, went out to stores on a rotating basis and talked to customers about products, helped them get fitted and taught associates about Wacoal's products.
Now, that's being done online or over the phone, but the team is what Kauffman calls Wacoal's "secret sauce" and they inform future products as well by relaying feedback.
"We're not a one-size-fits-all shop," DiCunzolo said. "We've worked with real women, and we want to make sure that we're providing the solutions for them. It's why we can never dwindle down our assortment because every woman is different and unique."
Individuality was also key to the creation of Lively. Grant initially was drawn to Victoria's Secret because of its strong brand message, especially for such a large company, but the brand didn't speak to everyone.
"You see that logo, it's: angel, fantasy, push up. It doesn't matter where you go in the world, everyone sees and hears the same thing," Grant said. "But what I started to realize after five years of being there was: I stopped wearing the product. I was really tired of trying to connect with the marketing because I wasn't a supermodel. And I started to not feel great about that disconnect."
Comfort became one of Lively's defining characteristics. Inspired by athleisure, and the movement of women wearing sports bras as their everyday bra, Grant wanted to create bras that women could wear for a 14-hour-day without feeling uncomfortable. She calls it "leisurée."
"Even when I was building Lively and telling people what I had in mind, if I said 'lingerie' they heard 'push up,' 'corset,' 'lace,' 'occasion,'" Grant said. Leisurée better conveys what Lively's about, in Grant's mind. In other ways, though, Lively isn't so different from Victoria's Secret.
Grant sees parallels between the two, including engaging with women in categories that they feel vulnerable in (swimwear and bras, among others) and creating a brand that has a conversation with women. "Our conversation's different," Grant said, but the general plan for Lively's future mirrors Victoria's Secret's own expansion, with loungewear and beauty products in addition to swimwear and undergarments.
"We could actually transition how women feel about those categories from feeling vulnerable to feeling confident," Grant said.
The overlap between comfort, fit and individuality is where Lively and Wacoal meet. Wacoal America runs its own design studio on Madison Avenue in New York "where we can have a concept to a sample within the same day," DiCunzolo said. That, and a company-owned manufacturing plant in the Dominican Republic, mean that Wacoal owns the entire process from concept to production, and can immediately incorporate feedback on fit into products.
Each style is fitted on models early, with professionals there to record feedback. DiCunzolo herself tried on a style to check sizing recently and requested a change to the material. "Because we own the process, the next hour they came back with a different sample and I tried it on again," she said.
Even with the similarities between the two, though, their future paths are different.
'We have a great story to tell'
For Lively, the future is about continuing on its current path and moving into more adjacent categories where women feel vulnerable and the brand message may resonate. Most recently, that meant skincare: a space the brand expanded into in October.
Lively's skincare launch — and before that loungewear, swimwear and active — came faster than Grant initially anticipated, and it was in motion before the Wacoal acquisition. When Lively started a podcast, the name "No Makeup Needed" stuck out to Grant. It represented what Lively was about, even though Lively didn't sell personal care products.
It also got Grant thinking about whether Lively should be.
"I had spent a decade and a half every day waking up and putting on makeup. It was like foundation and lipstick and eyeliner and mascara and blush and all these different layers, just to leave my house," Grant said. "But I started to think: Well, if that's not what we want for women in the category of bras, maybe we don't want that same type of pressure in the space of makeup, too."
With younger consumers also gravitating to more skincare offerings over makeup, it made sense. From a business perspective, beauty is also high margin and the products are relatively small and cheaper to ship. A win-win from Lively's view — and the company's looking for more of those going forward.
Wacoal's future is a mix of sticking to its tried-and-true strategies and trying to shake a few things up. The year has taken a figurative hammer to department stores, with J.C. Penney, Neiman Marcus and Lord & Taylor some of the biggest names topping the 2020 list of retail bankruptcies.
But to Wacoal, the channel — and brick-and-mortar more broadly — is "the foundation for the Wacoal brand," Kauffman said, and it's not going anywhere, though the retailer has put a greater emphasis on digital lately. Its marketing strategy is in flux, however.
"Marketing historically has never been our number one strategy," Kauffman said. The company instead has focused investments on the product and the people. "That's changed somewhat now. We're in a digital world, and we know we've got to be more present in that world."
Wacoal America is making an effort to talk about its sustainability initiatives and company values, DiCunzolo said, and differentiating between its two brands: Wacoal and Be Tempted. Since the latter skews younger, the marketing takes more of an empowerment lens, but for Wacoal, the main focus is attracting new customers and explaining Wacoal's fit-focused value proposition.
And as corporate culture and responsibility become more important to customers, Wacoal is prepared to engage on that too.
"If she wants to know more about our internal workings and our company corporate culture, etc. and that's important for her in terms of her purchase journey, we'll make it available to her," DiCunzolo said. "We have a great story to tell. We've just been sort of quiet and humble, and just doing the work for her — and we want to make sure that if that's the piece of information she needs that we will make that readily available."