When Corinne Callinan sized up the local hosiery market, she found size mattered in more ways than one.

Supermarket managers told her that the introduction of alcohol and ready-made meals had put the squeeze on existing products and companies were enlarging their packaging to stand out.

So Callinan did the opposite, shrinking the packaging on her hosiery range, Step Out, by one-third to a purse-sized square box. The square stood out from the traditional envelope-shaped hosiery packages and meant retailers had 33 per cent more space for her product.

Her idea worked: all of the country's 340 Foodstuffs and Progressive Enterprises supermarkets now stock Callinan's range.

She also discovered through trials that many Kiwi women measured slightly larger than traditional sizes, so made her hosiery to slightly bigger specifications. Now, most customer feedback gratefully mentions this.

Entering the hosiery market meant going head-to-head with Australian giant Pacific Brands, which owns most of the hosiery brands in New Zealand supermarkets and Farmers.

But with a background in fast-moving consumer goods, Callinan was confident she could compete. Her company, CXC, made $1 million in sales last year and has two manufacturers in China, 35 sales representatives, five management staff and two administration staff.

Callinan has always had an entrepreneurial streak. While other 20-somethings were flipping through fashion magazines, she studied Property Press and spent her weekends shopping for houses. By 31 she had a million-dollar portfolio of seven houses in Auckland.

After 15 years' working in corporate management and marketing roles at Unilever and Watties, she longed to set up her own business, and admiring comments about her Australian-bought tights sparked the idea of a hosiery company. Research showed a gap in the category for high-end contemporary women's hosiery in New Zealand supermarkets. She targeted the supermarkets because they'd give her critical mass, and her previous jobs meant she was familiar with the way they worked.

Patterned tights or "fashion" hosiery is the fastest-moving hosiery type in department stores and Callinan's pitch to supermarkets was that they were missing out. She also reckoned with her offering of premium, mid-range, fashion and fuller figure tights she could introduce new customers who would ordinarily have shopped at department stores.

After a year in a one-bedroom apartment, contracting by day and nutting out her business plan by night, she moved to her parents' garage in Mangawhai to polish her concept and designs and set up CXC (pronounced "sexy") in 2003.

Callinan visited the Korean Trade Commission for help in finding a manufacturer and went to Korea, finally settling on two companies which have since moved their operations to China.

She says her good relationship with the manufacturers is mainly due to having spent a lot of time with them: over the first three years she'd visit for several weeks four times a year.

Callinan is also the only Australasian agent for Italian hosiery brand Sisi, something she negotiated early and vied for with several Australian companies. Although volumes are small compared to supermarket sales, it gave her valuable insights into design and manufacture of high-quality hosiery. Leading edge design generally filters down to mainstream market after four or five years, so she hopes to be ahead on the ideas front.

Callinan did the designs for her range herself, but has since completed a photoshop course in textile design.

Because hosiery is a highly seasonal product, Callinan has introduced a range of children's socks and men's business and sports socks, again up against Pacific Brands. She wanted "more contemporary", less fussy designs for kids, and a higher-quality product for men.

Callinan puts a lot of effort into research - and it counts. The men's business range comes only in black after her surveys showed that while men said they'd like to wear other colours, they only had black in their drawers at home.

The economic gloom has forced Callinan to shelve some product development plans for the year. However, Australia still beckons and she has been "developing relationships" with supermarkets there over the past few years.

This has been a challenge, she admits, because "some are a bit parochial".

"One company representative asked why he should deal with a New Zealand company when it could deal with an Australian one."

Callinan credits the company's success to a "unique culture" that accommodates its staff - all mums who work part-time.

Callinan, who has a 3-year-old daughter, is flexible about school holidays and childcare and it's common for at least one child to be hanging out in her lounge (the office is one of her Auckland homes) watched over by a staff member working remotely.

To Callinan, a flexible attitude pays dividends. "It takes pressure away from women who want to work. If as an employer you are accommodating to people and their family and requirements, you get a lot of loyalty. I have a high calibre of staff who could walk into a management role at a multinational, but they choose the lifestyle. So it works both ways."

And staff are happy with her working ethic. "You often hear about companies that [have the same family-friendly flexibility] but not to quite the same level. If we have sick children we are welcome to take them to the office with us," says manager Annabelle Caesar.

"All staff are encouraged to take school holidays out to spend time with their children. Personally, for me this has been a huge factor keeping me out of the workforce. When you work for a company that genuinely takes interest in your family responsibilities it motivates you to go the extra mile in return."