Bendon CEO and co-owner Anna Johnson and former Bendon model Elle Macpherson. Photos / Bendon
One of New Zealand’s most iconic labels says it is on track to return to profitability within the next two years. Bendon co-owner and CEO Anna Johnson sits down with Shayne Currie to explain how she is transforming the business.
Elle Macpherson has gone, Heidi Klum has gone … Eric Watson has long gone.
One of New Zealand’s best-known clothing labels, underwear brand Bendon, has a renewed focus on mission and profitability under a relatively new owner and CEO. It’s a little unbelievable that it took so long, but with a management buyout (MBO) in April 2021, Anna Johnson became the first woman to helm the company in its 76-year history.
“You need to keep me on track,” says Johnson over coffee, “because I can talk for hours!”
Johnson, with a 30-year career in retail and executive management, bought the business with Justin Davis-Rice from Nasdaq-listed company Naked for a nominal $1 in a deal that also forgave a $40 million loan and left the pair with some cash and stock.
She’s upbeat about Bendon’s recovery plan but she’s grappling with myriad challenges in the post-pandemic era – many of them not uncommon to other retailers, some of them unique.
“Lingerie is not an easy industry to shop in. You put your [clothing] outfit together and someone has an opinion.
With every pair of breasts, they’re not twins, they’re sisters, and they’re very much like your feet. You need someone to guide you as to what shape you’ve got and what bra can suit you.”
Bendon – founded by brothers Ray and Des Hurley on Auckland’s North Shore in 1947 – was bought by Naked from controversial businessman Eric Watson in 2017, but had run up losses of $78.9m in the three years before the management buyout and was facing liquidation.
This month it filed its latest accounts with the Companies Office, which shows the company is close to breakeven – a loss of $2.5m for the financial year ended June 30, 2022.
Johnson, who is expecting Bendon to be back in profit within the next two years, has been stripping back the business to focus on key principles, including an important mission; training and developing staff; revamping its stock lines, infrastructure and backroom technology; and, of course, a relentless focus on its balance sheet.
Bendon is no longer spending up large on a marquee marketing name. There were times when Elle Macpherson billboards were being stolen for student flats. Heidi Klum then took over, but her name disappeared at the start of 2021.
“Having licensed product is very expensive and I completely understand, whether it was Elle or it was Heidi, this is their name, it’s their brand, it’s them,” says Johnson.
“They have a certain vision and a certain direction that they want to go in and – not all the time but certainly at times – it’s at odds with where we need to go.
“It just made sense that we have no more licence, no more model as such.
“When we were contracting to rebuild our foundations, it was important that we had the absolute licence to make the right decisions for the business rather than also cater to someone that absolutely should be looking after their own namesake.”
She reiterates that the designs are still owned by Bendon. “I don’t think we did a very good job communicating to our customers. We are the designers of lingerie. We always own every piece. All the styles that were so iconic in EMI [Elle Macpherson Intimates] and that people still talk about today ... we own those.
“They were relabelled as Heidi in the transition, and Heidi of course had a design element and brought her own handwriting. But we still worked to keep the DNA and the design of EMI, but we didn’t communicate it.
“Most of our brands - both Bendon and Fayreform - are renowned for bigger back, bigger cup, comfort, we didn’t need to have a model facing us. But we have taken that brand and we’ve called it Me by Bendon. We’re a house of brands.”
As well as a difficult financial period, Bendon has also been challenged by trends arising from the Covid pandemic and the ever-shifting fashion focus of young women.
With many people now working from home, customers are looking for extra comfort over style.
I ask about these trends and Johnson says: “The trend is actually to bring the bra back because a lot of the younger ones … if you look around, a lot of fashion doesn’t allow a bra to be worn.
“We’re sort of fighting a couple of battles there so, definitely that plays into where we want to go.
“Girls that should be wearing bras are not wearing bras – I love it that beauty has changed; when I grew up there was one view of beauty and rightly or wrongly, we all either openly or secretly strove to look like that.
“But today beauty means anything and different things and we all embrace it and celebrate it and I absolutely love that.”
But, she says, there also has to be education in place. A breast can weigh up to 5kg. “Once you damage those ligaments, there’s nothing you can do. They’re gone forever.”
Bendon, says Johnson, has an important mission – it never wants to compromise a fit; and the company wants to educate women around looking after their breasts and health, starting with young women in school.
“The marketing team don’t like it when I say this, but we’re there from cradle to grave through all the different occasions.
“We can all be retailers, you know. I’ve been doing that for 30 years.
“This actually is why Bendon has probably seen through the good, the bad, and the ugly days – we have been an important part of women in all their stages of life and we’ve been there when they’ve got their first bra or their maternity bra or their first work bra … through menopause or, unfortunately, if they face breast cancer and had a mastectomy.”
The company’s biggest assets, she says, are its staff, and there is a lot of focus on learning, development and training frontline workers.
“They are our ambassadors. We need to attract like-minded people that have that passion for doing the right thing by women, educating them and getting them in the right bra.
“That can take a long, long time. Sometimes the girls are in the fitting room for an hour if you have someone with a slightly difficult fit. But they’ll find it even if they can’t find it in our store.”
Investing in staff – building their expertise, helping them develop connections with customers – is critical. “We have a very rigid sign-off process because if I have someone in the fitting room with a customer and fit them in the wrong bra, that can lead to very uncomfortable fits.”
The name Bendon comes from the principle of having comfortable underwear that “bends on” a woman’s body.
Johnson describes herself as a “Bendon boomerang”, having returned to the business in 2018 after a stint earlier in her career.
“For me it’s a people business … even the people who have left us, they say ‘we will always be part of the Bendon family’ because we give them something. We always make sure that they learn something and we’re a very transparent business.”
Regional managers get access to the business’ full P&Ls; the entire company – around 500 staff – is given a rundown on the financial outlook.
She is picking a “super tough” second half of calendar year 2023, some green shoots in early 2024, and a return to profitability in the 2024-25 financial year.
“We’re match fit,” says Johnson. “We’ve been through difficult times at Bendon, so I’m absolutely not scared about that whatsoever.
“We want to be successful and part of being successful is being profitable. It’s not a dirty word.”
Over the recent King’s Birthday holiday weekend, she observed people were willing to pay for value.
“There’s definitely been a spike as the discounts continue, but a business can’t continue to discount with those types of levers because, you know, our costs as a business are also going up.”
Through all of this, Johnson says she has made “heaps of mistakes” in her career. Previously, she’s talked about having to deal with issues such as the wrong location of a retail store.
“I have made heaps of mistakes and I’ll probably continue to make heaps of mistakes. You fail fast and just try not to do the same thing again.”
Part of Bendon’s strength is its outlet-store channel. The company has 33 stores in New Zealand – 23 outlets and 10 retail shops – and 19 in Australia. It has also just opened 24 concession stands in Myer department stores across Australia. “It was definitely a test of our endurance. I’ve got the cortisone shots in my shoulders and torn biceps to prove it.”
She says the business is making big inroads in its path to profitability.
“It’s definitely turning around, and we’ve made great insteps. We’re still not where we want to be but through the MBO and a number of sound business decisions we’ve got a really healthy balance sheet and that’s amazing.”
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