top shadow
BODY

current news

René Rofé: Strategy For International Intimates


René Rofé, right, with wife Lori.
René Rofé, right, with wife Lori.

(Filed Under wholesale Lingerie News). In a wide ranging discussion René Rofé, owner of International Intimates, presented his view of overall market conditions and shared news and strategy from his own company.

In one of the most important moves in recent years, in the summer of 2012, Rofé “bought back” a majority interest in International Intimates, a company he founded in 1986. A portion of the company had been owned by outside investors for some years.

To put other developments at the firm in perspective, Rofé began with lingerie prices in America. “The U.S. is the toughest market! Underwear is cheaper here” than in most other parts of the developed world. “It is not just underwear. The cost of garments, in general, is among the cheapest in the world if not the cheapest.” This makes it particularly difficult to compete.

“Price became so important here,” in recent years, he continued. “Unless you are talking about the high end.” For the rest of the market, “comfort, style and fit” seem to take second place to price. “Price is where it’s at,” and looking ahead, Rofé can only see an increasing focus. The practice of regular sales and other discounting is “driving down the profit margins” of retailers. “I don’t know how long they can continue to do that.”

When he goes shopping he often sees sales in progress at stores. “They have no choice,” he emphasized, adding that during a recent holiday season, retailers that had “less than 50% off” were not busy. “All the ones that were busy had significantly greater discounts.” 

“Retailers are really trying to figure out what is the best thing for them to do to move goods and make a profit.” Sales and other discounts are only part of it; stores are opening longer. It is a battle of the retailers.” One expected result: “What you are going to have is more requests from retailers to the wholesalers for margin assistance...Price pressure continues on the retailers and it falls back on the wholesaler.”

Meanwhile wholesalers are now (and will be going forward) faced with steadily increasing costs due to a variety of factors including: rising wages, increased transportations costs, higher prices for raw materials and mandated improvements in social and environmental compliance and working conditions in the countries where apparel is produced. So “price pressure continues. How could prices go down when raw materials go up, when transportation goes up, with minimum wages going up?”

“But will the retailer pay more?” he asked. “Do you think the retailer has paid more? Absolutely not. Why? Because there is always someone else willing to take the order and do the business.” The philosophy of these producers: “They’ve got to keep the factory going.”

“Retailers are resistant. So it falls back on the factories and the wholesalers...We are not, all of a sudden, going to change that. It’s very difficult. They [the retailers] are not going to be the ones to lower their gross profit margins.”

Rofé has found several ways to prosper in this market. One element of his philosophy is that “consumers will pay for something special. I think consumers look for value. Where they find they are getting something special, they are willing to pay for it.” On the other hand, it is more difficult when you are selling a “basic commodity. The consumer has X amount of dollars in her pocket” and she wants to “maximize” what she can get. He said that the choice for some would be to buy one bra for $10 or $12 “or two bras for $9.99 at an off-price retailer.”  

An interesting conclusion of this intimate apparel executive is that “Junior customers are not brand loyal. They have to like it first. If it looks pretty, fits the price, she will buy it. She knows H&M, Forever 21, Zara. She knows she can get fast fashion and nice styling and a great price. That’s what she wants.”

The fickle nature of the young consumer contrasts with that of “the more mature woman. She finds a brand that fits and is comfortable and that’s what she likes.”

International Intimates sells in a wide range of price points and in many different retail settings, offering its own brands as well as private label merchandise. One area in which he has built a successful business Rofé calls “fashion basics. Combining fashion with a commodity item, that is where we come up with fashion basics...It is still a basic, yes. You hope they will pay a little bit more because they see value in it.” In the fashion basics arena, International Intimates offers “goods [that] are well made with up to date styling. So perhaps they do see a little more value in it and maybe they are will to pay a bit more.”

Ultimately, as a wholesaler, “we are not in control. The retailer is in control.” And to succeed with retailers today, “You have to give them a reason to buy from you. Price, styling, service. You have to be on trend, deliver on time and your price” has to be good.

Contrary to the prevailing wisdom at companies where inventory is anathema, a key strategy at International Intimates is to “maintain a large inventory” of products — which Rofé indicated is in the millions of dollars at his company. This so that he always has a wide variety of products immediately available for customers. It allows him to nab orders that his competitors (with empty warehouses) would lose. “We don’t really have tons of closeouts,” he continued, emphasizing that the inventory is maintained only as a service for customers. “Today, very few people want to carry inventory. The goal is to carry as little inventory as possible. We are a little bit unique in that we carry substantial inventory. That enables us to sell to opportunistic buyers and handle request for a wide variety of goods.”

Having many different types of customers is not an accident at International Intimates. “Our business is quite diversified with a good balance between our private label business and our own brands,” explained Rofé. His products include “a wide spectrum of price ranges. We can sell to the cheap businesses and we can also sell to the expensive guys. I don’t think that some of these other companies do this. Especially the new guys.”

In an interview with Rofé a decade ago, he explained his pricing philosophy as marking up his products in such a way as to make a reasonable profit, but not to make a killing. And in this most recent interview he seemed to confirm that philosophy. “If I get this price I am happy. I don’t look to gouge the customer. We don’t do things that you find in a lot of wholesalers.” One practice Rofé rejects is shipping goods first to the customer “who paid the most.” At International Intimates, he claimed, the “first guy who ordered gets the goods whether or not it is the highest price. We don’t steal from somebody to give to somebody else.”

The private label business for International Intimates is “very good” right now despite all of the compliance and other issues involved with sourcing overseas in different countries. One reason is that the firm is committed to producing quality goods, no matter what the price. “Even on our cheapest products we go through a rigorous fit” process, he claimed, something he said other suppliers may not do. “Even the cheapest goods, we still want them to fit.” He added, “Today, customer service is as important as the product itself. We go the extra mile to satisfy our customers.”

International Intimates supplies not only some of the biggest names in lingerie retailing but also certain wholesale brands. “We design and make merchandise for some national brands that people do not realize it’s us that makes them. In general,” he continued, “We do not make a lot of noise.” Rofé declined to name for publication the stores and brands for which he produces.

Although International Intimates was originally best known for day wear, and especially panties, now sleepwear is also becoming an increasingly important part of Rofé’s business. “Our traditional sleepwear business has increased substantially ever since Todd Demakos joined our company.” (Several years ago Demakos had been president and co-owner of St. Eve, a sleepwear specialist that was doing approximately $100 million when it was sold to Industrial Renaissance). “Todd has been spearheading that area, and that business is expanding in many different fabrications.”

F.I.T. is a shape wear brand the company launched a number of years ago. The initials stand for “Figure improving technology” said Rofé, and the business “continues to be good” for his company. This despite the fact that “the whole shapewear category got diluted because everybody and his mother went into it.”

Rofé sells only women’s intimates and has no plans to enter the men’s market, he said.

While an increasing number of wholesalers have put a heavy emphasis on selling intimates directly to consumers on their websites, Rofé is not yet convinced. “My feeling now is that for our company we are not looking to sell our products directly on the internet because we do not want to go into competition with our existing retail customers...That is not to say we won’t do it in the future.”

While International Intimates has had a mixed history with licensing, Rofé insisted he is still a believer. In the past decade or so, the company has taken and then dropped such licenses as Baby Phat, Necessary Objects, Anna Sui and Hustler. (The Hustler brand continues as a mainstay for independent companies operated by Rofé’s son, Elan).

International Intimates signed the Isaac Mizrahi license for intimates in mid-2012 and still offers the brand. It is sold in Bloomingdales, among other stores, Rofé said, adding that the company has also developed “a secondary Isaac brand” that is sold in the off-price channels. “Having licenses allows one to sell multiple brands to the same good customers. You can add customers or you can add product categories. That’s essentially how you can grow a business.”

We asked Rofé what consumers think about the recent consolidations in the intimate apparel arena, transactions such as the Warnaco takeover by PVH, the Eveden purchase by Wacoal and the Maidenform purchase by HanesBrands. His opinion is that changes in the ownership of a brand or a license have little or no impact on the consumer in the sense that “the consumer is largely unaware of corporate changes in ownership. The woman who is going to buy a Maidenform bra is either unaware or does not care that the company changed ownership in 2013. The fact that [the underwear portion of] Vanity Fair and Fruit of the Loom are owned by the same [entity-Berkshire Hathaway] does not even enter into the consumer’s mind. As long as they keep the products coming, it does not have any impact on the consumer...When corporate ownership changes, I don’t think most consumers are aware of it. And I don’t think it affects their decision to buy a product. It does not mean she is going to stop buying style 402.”

While International Intimates sells to a host of major department stores, specialty stores and private label customers, Rofé also lists off-price retailers as some of the “best customers in the U.S...You are seeing that those types of stores are getting a lot more attention from vendors than they have in the past. Dealing with the department stores is not so easy. It is much easier to deal with brand-name-for-less” stores.

Rofé does a huge amount of design work for both its own brands and its private label clients, but he does not call it by that name any more. “Today, outside of the top, top designers there is little actual designing going on,” he said. “Product development. That is what designing is today. Designers today do not start with a blank sheet of paper. Designers of yesteryear,” he remembered, could create their own fantasies. But he emphasizes, some of these were “not wearable.”

"I am not interested in being the richest man in the cemetery,” concluded Rofé. Looking back, he said, “the biggest mistake I made is that I was never one to go over the buyers’ heads. As such, my relationships have always been with the people closest to the merchandise as opposed to top management. You think that I can pick up the phone and get whoever it is on line at some major stores?” He asked in a tone that clearly indicated he does not have this ability.


more wholesale Lingerie News >>

Published 06-12-2014 by Nick Monjo

Related Articles

René Rofé: Strategy For International Intimates
Goncalves: René Rofé Dir. Social Compliance
International Intimates: Chris Lee is VP Design
Demakos SVP at René Rofé


Comment on this article, brand or product

Disclaimer: The views expressed in comments published on bodymagazine.us are those of the comment writers alone. They do not represent the views or opinions of Bodymagazine or its staff.















NOTE: Your Email will not be displayed.

Related pictures

Follow BODY on:
twitter FaceBook RSS
Share this article on:
Digg Reddit Stumble

Contact Information: (718)676-4444
Copyright © 2023 Fashion Market Magazine Group, Inc. All rights reserved.
All photos Copyright © 2000-2024 Nick Monjo & Fashion Market Magazine Group. All rights reserved.
Please email any website related issues to bodymagazinefmmg@gmail.com
bottom shadow