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Posted Date: 6/1/2003

Nygrd: Growth Poised to Gain Major Momentum

By  Julie McElwain, Contributing Author

In the 35 years since it was founded in the unlikely place of Winnipeg, Manitoba, Nygrd International has become one of Canada's leading women's sportswear manufacturers, offering an extensive range of brands, from the moderately priced alia and TanJay to the higher end Bianca Nygrd, Peter Nygrd Signature and Nygrd Collection, as well as a host of licensed products.

Thanks to the vision of chairman and founder Peter Nygrd, the company has become a force to be reckoned with in the United States as well. Whereas previously, 20 percent of Nygard's business was geared to the United States and 80 percent to Canada, today 65 percent is focused on the U.S. market and 35 percent on Canada. Each year, approximately $400 million of the firm's $500 million in goods are shipped from its state-of-the-art service center in Gardena, CA.

Apparel recently spoke with Peter Nygrd at his stunning, self-designed beachfront house-cum-office in Marina Del Ray, CA, and learned more about the company's phenomenal growth, and his expectations for the future.

APPAREL: Nygrd International is celebrating its 35th anniversary. What milestones have made your company what it is today?

NYGRD: I've always gone to the heart and soul of what a good product is. I did market research. . I spoke to the consumer directly. So when it came down to having a difference of opinion with the [retail] buyer, I came armed with direct consumer information as opposed to surrendering to "buyer knows best." Once, I supplied the longest skirt in the industry, contrary to what the buyer wanted. I fibbed and told the buyer I'd make a skirt at 22 inches. I shipped it at 23.5 inches, and my skirt became a best-seller. That established my credibility, but I really had to depart from the whole industry standard. Secondly, I sold each department store at the same price, which wasn't done. A very critical moment in my career was when I sold [merchandise] to a key customer, Eatons, and 10 weeks later had to knock down the price for another retailer. I went to Mr. Eatons and gave him money back. The industry was in shock, but from that day no one questioned our prices. We became known for our pricing policy. And finally, we went global very early in the game. [When I put part of my production in Asia,] this was radical, very pioneering, because no one did that at the time. Now it's a way of life, but we quickly became an importer rather than a straight manufacturer.

APPAREL: What is the biggest challenge you have overcome?

NYGRD: Becoming a national brand. We spent an enormous amount of our life developing our brands to become national brands. You have to go through all aspects of your business to do this - the manufacturing and the importing part of your business, the infrastructure and DCs [distribution centers] and all the rest. . It's a huge investment. We now are the dominant brand in Canada, and we're well enough recognized in the United States, but that was the biggest single hurdle that we had to overcome.

APPAREL: What is the biggest single challenge you face now?

NYGRD: Actually, it's a very pleasant problem. We're having a hard time keeping up with our growth. We've created a very high-standard company, and it's hard to find people who will rise to the occasion. We have a lot of business coming up, and we're reluctant to take it unless we have the people who can handle it. But we have a tremendous opportunity for the right people in our company. We have the best infrastructure, but a lot of work goes into bringing it to that high standard. We want to put out $100 million gains, but we have to do it carefully, not recklessly.

APPAREL: You recently went from a five-day workweek to a seven-day workweek at your service center in Gardena. Why?

NYGRD: We opened with the intention of being a 24/7 service center. That's what service is all about. Retailers don't recognize a five-day week. . We needed a service center, not a DC. This is a new attitude, and it is fundamental to how successful we are. We can get orders out on Saturday, not Monday. It also gives us a chance to . use another 20 percent of our facility better. When you're down for two days, there is a lot of overhead sitting there. We're also growing faster than we thought we would. We're already filled up, and as a result, I should be looking for more space. We need to work 18-hour days, two shifts.

APPAREL: You've been a great proponent of technology. How important has that been to your success?

NYGRD: It's everything. It's the whole essence of our future. It's what you call a defendable advantage. So many areas of the garment business are undefendable. As soon as you create a product, the other guy can knock you off. It's a vulture business. You have to find yourself a business you can really defend: infrastructure and technology. Everything today is about speed: the speed in which you bring the product to the retailer [and] to the market; the speed in which you design and communicate. Technology is what drives that. It's truly the speed of thought. We excel in that. We're not only leading in that area, but we're gaining on it.

APPAREL: How so?

NYGRD: Technology is like a rocket ship that takes 50 percent of its power and energy just to get off the ground. But once it gets off the ground, it takes on speed and has a life of its own. . We've put a huge amount of investment in technology and are getting off the ground, and every day we're getting ever-increasing paybacks out of it. People are buying [our lines] for our technology. [Retailers] are no longer viewing [apparel] companies because they have a smile and a handshake and a good bluff. They're looking at the infrastructure of the company, why you have a competitive advantage and how many unique things you have over your competition.

APPAREL: Retailers are coming to you specifically for your technology?

NYGRD: Companies come to us for the technology solution. We can tie our computer-generated order books to download automatically with theirs. The old system is so flawed. It doesn't give you size and color per store. Our system is built for size and color. As soon as we have a connection with a company, one of our big assets is that we can tie it with our IT [system]. Thanks to our technology, we measure progress in minutes and seconds, not days and weeks.

APPAREL: What are your expansion plans?

NYGRD: We have an interest in more licensing, including men's wear, but the most interesting one is in home furnishings as well as home building products. . We'll also be redesigning our retail stores. We want to get a handle on the next generation of mall specialty stores. They will look very different, very unique - "Where Technology Meets Fashion and Fashion Meets Technology." We've used that [slogan] for 25 years. . Now it's happening.

APPAREL: Where do you expect Nygrd International to be in five or 10 years?

NYGRD: I think the company is going to double in size in 10 years. Our favorite number now is the one with a "b" behind it. I say that jokingly, because it's just as troublesome to grow from $100 million to $500 million as from $500 million to $1 billion. But it's a very achievable goal. We're going to find ourselves buying some companies, overlaying our infrastructure on them, making them better companies, and the synergy of [our combined] companies is going to bring a lot more to the table. I'd like to create a climate where we work with entrepreneurial apparel companies rather than own them. That's a very specific direction for us. Whatever we do, we're going to be the best at it. With our whole package - the product, the marketing, merchandising, operations, style, etc. - we're one of the top 10 companies in the United States. We'd like to be No. 1 someday. We're very sports-minded, very competitive, and we want to win this game.

JULIE McELWAIN is an Apparel contributing author who has covered the West Coast apparel business for more than 10 years. Based in Long Beach, CA, she may be reached at jmcelwain@aol.com.

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