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- [00:00]
Narrator
Wondery plus subscribers can binge all episodes of Business Wars TikTok versus the USA early and ad free right now. Join Wondery plus in the Wondery app or on Apple Podcasts. It's May 2016 in Cannes, France. Kim Kardashian scowls at her reflection in the mirror. She's dressed in a floor length sparkling silver dress with a long train that seems custom made for her. The dress is gorgeous, but Kardashian hates the way it looks. In just a few hours, Kardashian set to make her red carpet debut at the prestigious Cannes Film Festival. And she needs to look perfect. She's known for accentuating her hourglass figure. It's helped her build a business empire and a net worth of over $50 million. Every outfit has to be a hit, and this doesn't look like a hit. Kardashian's team gathers around her. They agree something's off. Her stylist has Kardashian to a360. The stylist gestures at the skin tight slip that's visible through the dress's side slits. It's too pale. Kardashian nods. He's right. The contrast between her skin color and the slip makes it look like underwear. It needs to be darker, closer to her own skin tone. Her stylist says. They can dye it. Kardashian's not convinced. They don't have any dye and there's not enough time. They need to leave for the red carpet in less than 90 minutes. The stylist thinks for a minute, then snaps his fingers. They can use tea bags. They only need the slip to be a smidge darker. They can do this. Kardashian agrees, and the team springs into action. Her assistant fills the bathtub. The stylist grabs a box of tea bags from the kitchen. Kardashian strips and throws on a bathrobe. They dump the entire box of tea into the tub. When the water's a deep brown, they submerge the slip. They leave it as long as they can. When they hold it up, it's definitely darker, but now they need it to dry and fast. They all take out hair dryers and blow hot air on the slip, but pretty soon they're out of time. The slip isn't completely dry, but it's dry enough. Kardashian shimmies back into it. The damp material feels clammy on her skin. She's willing to endure a lot of discomfort and pain for fashion, but a wet garment may be a bridge too far. And it's not the first time Kardashian and her team have had to DIY her shapewear. She frequently has to cut off the legs of compression tights to accommodate the high slit dresses she loves. Her team has Frankensteined other pieces before sewing various compression garments together to make them work for her outfits. It shouldn't be this hard, she thinks. These undergarments should come in more shapes, more shades. Kardashian eases into the heavy, bejeweled dress, her stylist helps her clasp it, and when she looks in the mirror, she likes what she sees. The moist slip may feel uncomfortable, but it looks pretty good. And as Kardashian does one final spin in the mirror, looking at herself from all angles, an idea hits her. If no one's making the garments she wants, she should make them herself. By the time she's in her car, Kim Kardashian has made a decision. She's going to remake the shapewear market and become its new queen bee. Need care for ed, hair loss, skin care, or other common health concerns? Amazon one Medical Pay per visit lets you quickly connect with a provider right from home. No insurance needed, no scheduling hassles, just straightforward, affordable health care when you want it. Start a virtual visit anytime 24? 7. Their providers will create a personalized treatment plan and if medication is right for you, get fast free delivery through Amazon Pharmacy Prime. Members can even save up to 92% on ED medications compared to competitors. Quality care shouldn't be complicated or expensive. That's why they offer transparent pricing with a simple, flat fee per visit. This is the kind of new thinking many folks have been hoping for. And with health care costs spiraling well, bottom line here you can get care and meds for less with Amazon. Head to Amazon.com bwom to learn more. A provider determines eligibility. Prices may vary.
- [04:32]
Kim Kardashian
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- [05:04]
Narrator
From Wondery I'm David Brown, and this is Business Wars. When Kim Kardashian had her light bulb moment in southern France, the shapewear industry was bringing in about $700 million in annual revenue in the United States. There was one brand that towered above them all. You may have heard of it. Spanx. That company was synonymous with the whole category, the way Kleenex has come to mean facial tissue. About 15 years earlier, in the year 2000, Spanx was credited with reinventing shapewear for the modern era. And while it may have seemed old hat, by the time Kardashian was dyeing her slip with teabags, Spanx used to be viewed as highly innovative. Its founder, Sarah Blakely, created an entirely new clothing category. Kardashian may have had fame and fortune on her side, but her entrance into the shapewear business going up against an established titan like Spanx, that was no safe bet. This is a story about what it takes to launch a product, to convince everyone from prototype manufacturers to buyers to investors to take a chance on something that's untested in the marketplace. It's also a story about how far celebrity backing can take a brand. Is the endorsement of a big name enough to upend the status quo? And how long before the sizzle of that newcomer wears off? Beyond just a battle for dollars, Spanx and Kardashians skims have to contend with a shifting retail landscape, one that's been affected by the body positivity movement. They're wrestling over what the ideal women's body looks like and how much discomfort women should endure to achieve it. Global forces are at play, too, of course. Is the pandemic era athleisure trend here to stay? Is it smart to make a full pivot to sweats and yoga pants? Or will the pendulum suddenly swing back? In order to survive, both companies are going to need to adapt. But first, I told you this was a story about entrepreneurship, about faking it until you make it. And by making it, I'm talking about Spanx founder Sara Blakely becoming a billionaire. But once upon a time, Blakely was just a woman who hated the way she looked in white pants and was determined to change that. This is episode one, not your grandmother's girdle. It's summer 1998 in Atlanta, Georgia. A department store fitting room. 27 year old Sarah Blakely can feel beads of sweat forming on her forehead as she yanks another pair of compression bike shorts up her thighs. It's her third pair and she's ready to give up. The shorts are thick and uncomfortable, and somehow they make her look even more lumpy. Her stomach bulges over the waistband where the shorts squeeze, and the seams around the hips and thighs are visible right through the pants. She looks worse than she did wearing regular underwear. There's no way she's wearing any of these awful garments to a swanky cocktail party. Blakely came to this department store on a quest to find underwear that would help her feel better about how she looks in a pair of white pants. Pants that have hung unworn in her closet for eight months now. She splurged on them after getting a promotion in her sales job, but every time she tried the pants on, she ended up putting them back in the closet and picking something else. She hates the way she looks in them from behind and the underwear lines that they create. A lingerie saleswoman insisted she'd find a solution in the shapewear section. Blakely peels off the shorts and decides she's done here. So it's back to square one. But that doesn't mean she's going to give up. In fact, she's going to find something to wear under these pants. A few days later, Blakely sashays across the rooftop toward the bar. She's wearing her white pants and a pair of snazzy sandals. Feeling good. The night before, she had a breakthrough. She cut off the feet of a pair of pantyhose. The top of the hosiery features a control top, extra layers of nylon that flatten her stomach, thighs and butt. The tights are made of a thin enough material that the fabric of the pants easily slide over them. And without the pantyhose feet, she can wear her open toed sandals. This is the solution she was looking for this whole time. Blakely orders a cosmo and finds her friend. The two start chatting. But as they continue to stand there, Blakely feels the bottom of her pantyhose, the cuff where she cut off the feet, start to roll up her leg. She shifts uncomfortably as the legs continue to creep up. She can feel them bunching up underneath her pants. Blakely tries to stay focused on what her friend is saying, but eventually the distraction is just too much. She excuses herself to the bathroom. Inside the stall, she adjusts the pantyhose and heads back out to the party. But not much later. You know it. The legs roll back up again. Blakely clenches her jaw, frustrated. She thought she'd found the perfect solution. If only somebody made control top pantyhose without the feet that didn't roll up, they'd have a hit business on their hands. Yeah, you might be thinking here, this sounds a lot like Kim Kardashian's aha moment with those teabag dyed tights. And it is Except Blakely isn't a household name, and her bank account is missing a few zeros. Blakely freezes in place, her drink halfway to her mouth, an idea striking her. If no one else is making this product, then she should. She has $5,000 saved up, and now she feels confident enough in this idea she's willing to put it toward getting this new business off the ground. Blakely downs the last of her drink with new determination. She walked into this party as a sales trainer, but she's walking out as an entrepreneur. Some people will see what's coming here, some won't. If there's anything that separates a budding entrepreneur from, say, someone who dreams about success, it might be this. They have an intuitive sense of how to leverage personal experience. And as you're about to hear, Blakely may not have known exactly how to do the leveraging. After all, what did she know about the fashion business? But she did know this much. She identified a problem and a possible solution she could profit from if she could find the right path forward. She might not know how to get there from here, as they say, but with persistence, she'd find a way. Over the next year, Blakely throws herself into her new endeavor. She logs hours in her day job training people on how to sell fax machines and printers, but she spends her nights and weekends developing what she calls her Control top footless pantyhose. She needs a prototype and a patent, and with only $5,000 to spend, she has to do almost everything herself. She buys samples of different kinds of elastic and lace at home. She paper clips the swatches to the bottom of pantyhose to see which works best. She reads up on patents and trademarks, preparing a patent application to make sure her invention will be protected. She holds up in the Georgia Tech library reading through every existing patent registered in the undergarment category. It's an arduous undertaking, but by the end, she believes in her product more than ever. There really isn't anything like it, but she knows she needs professional help with a prototype. Blakely learns that most American hosiery manufacturers are based in North Carolina, so she puts together a list and writes a letter to the manager of each one, pitching her idea and asking them to help her make a prototype. Each and every one turns her down. Some are blunt, telling her her idea is stupid and will never sell. One day on a business trip for her sales training job, she's alone in her hotel room, feeling down. She spent the better part of a year working on this invention, and she doesn't have much to show for it. She still believes in it, but seems like no one else does, and she's just not sure what to do next. She turns on the TV and flips to her favorite comfort watch the Oprah Winfrey Show. A few minutes later, her eyes go wide. She can't believe what she's seeing today in order because I have these shoes and it's hard and I didn't want the toe, so I cut my pantyhose.
- [14:10]
Kim Kardashian
And they're right there.
- [14:13]
Narrator
It feels like a sign from the universe. If Oprah is using the same trick Blakely did, lots of other women must be, too. And if not, they sure will be. Now Blakely decides she's not going to accept defeat. The hosiery manufacturers don't yet understand what she's trying to do, but maybe they will if she can explain her idea in person. When she's back in Atlanta, she takes a week's vacation from her day job and drives up to North Carolina. But even pitching her idea in person and turning up her charm, the managers still don't think her idea's promising. Two weeks later, she gets a phone call. It's one of the managers who turned her down from up in North Carolina. He says he still doesn't think the footless pantyhose thing will take off, but he mentioned the idea to his daughters, and they both thought it sounded great and urged him to work with Blakely. So now he's decided to help Blakely make that prototype. For the next year, she goes back and forth from Atlanta to North Carolina, working with the product development team to create the perfect sample. Finally, in summer 2000, two years after she had that idea for Control Top footless pantyhose, Blakely has her prototype hitting mid calf with a cuff that prevents the leg from rolling up. They're smooth and thin and tighten and flatten the midsection and thighs. She also has a patent for her invention and a name for her company, Spanx. She liked how the cheeky name signals that this is a different approach to shapewear. At the last minute, she changes the spelling to use an X at the end to make it easier to trademark. Now, in the era of department stores, she just needs to find a store to carry her product. In summer 2000, Blakely is in Dallas, Texas, sitting across from the head hosiery buyer for the department store Neiman Marcus. Over the past couple of months, Blakely has persistently called this woman, leaving voicemail after voicemail until finally the buyer granted Blakely a 10 minute meeting. With only 10 minutes to make her case, Blakely does not waste any time. She pulls out the prototype and lays it on the table.
- [16:30]
Kim Kardashian
I introduce you to Spanx.
- [16:33]
Narrator
The buyer's eyebrows shoot up, but Blakely pushes on. She knows the name is a little risque, but she likes it.
- [16:41]
Kim Kardashian
This is a product that's going to change women's lives. Huh? That's a bold claim. It is, but I stand by it. With Spanx on, women can wear anything they want and feel confident and empowered. They won't be worried about their panty lines while giving a presentation to the board. They'll dance away at that wedding without worrying about cellulite. Look, you're clearly very passionate about this, but the truth of the matter is that the hosiery market is facing a downturn. Women just aren't buying pantyhose like they used to. I know. I spent the better part of the past year with a bunch of hosiery designers in North Carolina. I've heard all about the softening sales. But Spanx is different. This is hosiery made from four women. Buy a woman.
- [17:33]
Narrator
Blakely leans across the table like she's sharing a secret.
- [17:37]
Kim Kardashian
Did you know that before working with me, my manufacturer had never tested any other products on an actual woman? They only used a plastic mannequin to assess size. Spanx are comfortable. I can attest to it. I tested them myself. Just don't know. Will you come to the bathroom with me?
- [17:59]
Narrator
The buyer looks at Blakely, horrified.
- [18:02]
Kim Kardashian
Excuse me.
- [18:03]
Narrator
Blakely gulps. She thought showing the buyer the before and after of Spanx using her own body and white pants would be cute and memorable. But looking at this woman's face, she realizes just how weird it is to invite a stranger to the bathroom. She needs to wow this buyer and prove to her that Spanx is the game changing product. Blakely knows it is. If she doesn't figure out a way to fix this, she won't be able to get Spanx into actual stores and it will remain nothing more than a prototype. You know, it's funny. Sometimes self care looks like binge watching cooking shows in your PJs. And other times, it's just making sure you're taking care of the basics. And that's what liquid IV is for. It's a little daily ritual that makes hydration actually exciting. Let me tell you what makes it special. It's powered by Liv Hydra Science, a blend of electrolytes, essential vitamins, and clinically tested nutrients. You just tear open a stick Pour it into water and boom, you've got hydration that has three times the electrolytes of the leading sports drinks. I keep some sugar free Liquid IV packets in my car console. White Peach is my favorite. Just pull into a gas station, grab some bottled water, pour in some Liquid IV and that feeling of constant thirst on the road just disappears. All you need is one stick 16 ounces of and it hydrates so much better than just water alone. So what's your ritual? Well, break the mold and own it. Treat yourself to extraordinary hydration from Liquid IV. Get 20% off your first order of Liquid IV when you go to LiquidIV.com and make sure to use code BW at checkout to get that 20% off discount. That's 20% off your first order with code bwiquidiv.com what makes a leader? It's not just about taking charge. It's about setting the standard. For those who approach life with passionate determination, there's the Range Rover Sport. Redefining sporting luxury, the Range Rover Sport combines dramatic modernity with distinctive character. Its well appointed cabin creates a sanctuary for every journey, featuring active noise cancellation that filters out unwanted sound. Plus optional PM2.5 filtration, reduces allergens and manages CO2 levels for enhanced wellness. Inside, you'll find optional 22 way adjustable heated and ventilated front seats with massage function bringing refined comfort to every drive. And with configurable cabin lighting, you can curate the perfect atmosphere for any moment. The Range Rover Sport where high achievement meets exhilarating performance. Build your Range Rover Sport@range Rover.com USSport it's summer 2000 in Dallas, Texas. Sarah Blakely sits dumbfounded. She can't believe she just asked the head hosiery buyer of Neiman Marcus to go to the bathroom with her. Why did she think this would be a good idea? The buyer shifts in her chair, preparing to stand up. That's it. Blakely blew her chance to pitch the product she spent the past two years and her life savings on. She has to do something.
- [21:30]
Kim Kardashian
Wait, sorry, that. That came out wrong. So you don't want me to go to the bathroom with you? No. Well, yes. I want to show you what Spanx can do. If you see the difference Spanx makes, you'll understand why I say this is a product that will change lives.
- [21:49]
Narrator
The buyer purses her lips.
- [21:51]
Kim Kardashian
All right, fine. Let's go.
- [21:55]
Narrator
The buyer leads Blakely down the hall to the women's restroom. Inside, under the fluorescent lights, Blakely gestures toward her legs.
- [22:03]
Kim Kardashian
These are the same white Pants that I was trying to find the right undergarment for two summers ago. Now I want you to look at my butt.
- [22:12]
Narrator
She spins around, ignoring the buyer's raised eyebrows. This is Blakely's last chance, and she's going to do whatever she needs to do, even if it is a little uncouth.
- [22:24]
Kim Kardashian
This is what I look like with no Spanx. See the panty lines, the cellulite? This is the before picture, if you will. You have that image in your head? I do. Okay, hang on a second.
- [22:38]
Narrator
She steps inside the stall and quickly takes off her pants, pulls on the Spanx, shimmying them over her hips. Once she's redressed, she steps back out and spins around.
- [22:50]
Kim Kardashian
Now look at my butt again. See how much firmer it looks? Plus, the pants drape like a dream with no panty lines.
- [22:59]
Narrator
Lakely looks over her shoulder and the buyer is nodding her head, impressed.
- [23:04]
Kim Kardashian
You're right. I totally get it now. Really? Yes, it's brilliant. We'll do a test order, let's say 5,000 units in seven stores. If it sells well, we'll order more. Does that sound good? Oh my God, yes. That's great.
- [23:22]
Narrator
A woman walks into the bathroom and slinks into a stall.
- [23:25]
Kim Kardashian
How about we go over the details back in my office?
- [23:29]
Narrator
Blakely eagerly agrees, and the two exit the restroom. Hey, remember what I was saying about persistence earlier? There's something that goes hand in hand with that resilience in the face of rejection. You know, when Blakely was shopping her idea around with manufacturers, she got no at every turn until someone said yes. Same thing with this pitch. You may first think you've blown it, but after many years of doing business wars, I've never come across a success story that ends with no can do or you can't get there from here. On the face of it, resilience may sound easy, simple, but it can come with a little pain. It can force you to fit your dreams to match certain realities you may not have seen from the start. And you know, sometimes you just gotta ad lib and show em what you got. When Blakely tells the hosiery manufacturer that made the prototype that she needs 5,000 pairs, he's shocked. He admits he never thought Blakely would actually get the product into stores, but he's thrilled and he starts up that production line. When she gets her first batch, Blakely packages one up and sends it off to Oprah Winfrey's production company in Chicago. She includes a note mentioning that Oprah inspired Blakely to keep going during A moment of self doubt. Blakely knows it's unlikely that her package will make it past Oprah's assistance into Oprah herself. But Blakely thinks there's no harm in trying. And she really does feel like she owes Oprah for giving her the confidence to keep pushing forward. Three weeks later, Spanx are on the shelves at seven Neiman Marcus stores around the country. But just getting them into the store isn't enough. The buyer made it clear that this is a test run. If Spanx doesn't sell quickly, Neiman Marcus won't order more and this will be the end of the line. But Blakely can't go into a bathroom stall with every woman in America to show them the benefits of Spanx. Fortunately, one of the Neiman Marcus stores carrying Spanx happens to be in Atlanta. Blakely convinces the manager to let her set up a table in the hosiery department so she can speak to customers directly. She takes pictures of herself in her trusty white pants with Spanx and without to show women who pass by. She spends every evening in that Atlanta store. And on weekends, she flies to the other Neiman Marcus locations around the country carrying Spanx. And soon she feels like the message is getting out. Women are trying Spanx, and the early feedback is good. But one evening when Blakely walks into Neiman Marcus to set up her table, the manager of the hosiery department is waiting for her. He asks Blakely to come into his office. He plays security camera footage of Blakely using packing tape to secure a cardboard display of Spanx onto a checkout counter in another section of the women's department. He asks Blakely what exactly she was thinking. Blakely blushes. She explains that she thinks Spanx should be carried in other departments besides just hosiery. People don't know about Spanx yet. They need to see it to want it. She wants it to be an impulse purchase, something you buy alongside the cocktail party dress or pantsuit. The manager tells her that even if he agreed this was a good idea, she can't go taping up unauthorized displays around the store. Blakely apologizes and admits she got carried away. She assures him it won't happen again. But the manager tells her that her permission for her table in the hosiery department has been revoked. Blakely protests and promises to stay in line from now on. But the manager refuses to budge. He doesn't trust her anymore. Blakely slinks out of the store, discouraged. This test run with Neiman Marcus is a key moment for Spanx. She's reached out to several other department stores about carrying Spanx, but they've all said they want to wait and see how they sell at Neiman Marcus. If they languish on the shelves, Spanx might never truly make it to market. But later, the manager calls her, chagrined. It turns out Blakely's DIY display did actually increase Spanx sales. The higher ups had told him to let Blakely keep on doing what she's been doing. So Blakely hustles back to the Atlanta location and sets up her table again. And she works with store staff to set up official Spanx displays without duct tape this time. Two weeks later, every test store has sold out of Spanx. Neiman Marcus wants more, a lot more, and so do other department stores. In mid October 2000, Blakely quits her day job. Spanx has officially gotten too big for her to only run it during evenings and weekends. But it's still in a precarious position. She has one product in three department store chains and no money for advertising. To reach the next level, she's going to need another lucky break. In late October, Blakely's phone rings. She answers while unpacking the latest shipment of Spanx.
- [28:48]
Kim Kardashian
North Carolina Spang's headquarters. Sarah Blakely speaking.
- [28:51]
Narrator
Hi, Sarah. I'm a producer with Harpo Studios in Chicago. Blakely lets out a gasp and sets down the packing tape. Harpo Studios is Oprah Winfrey's production company.
- [29:02]
Kim Kardashian
For real?
- [29:03]
Narrator
Yeah, for real. And I was wondering, are you familiar with Oprah's annual Favorite Things episode?
- [29:08]
Kim Kardashian
Of course.
- [29:09]
Narrator
Every year around Thanksgiving, Oprah hosts an episode focused on all her favorite products of the year that she thinks would make good gifts. It's consistently one of the most watched episodes of the show.
- [29:19]
Kim Kardashian
I look forward to it every year.
- [29:21]
Narrator
Well, the show is coming up in just over two weeks, and Oprah's interested in featuring Spanx as one of the products. I just have a few questions I need to ask you before we can confirm that Spanx will be included in the episode. Blakely's heart pounds. This could be the break she's been looking for. Being featured on the episode would be the equivalent of millions of dollars in paid advertising. She has to answer these questions perfectly.
- [29:44]
Kim Kardashian
Okay, shoot.
- [29:46]
Narrator
As I'm sure you can imagine, products featured see a huge surge in sales. Will you have the inventory on hand to handle the new interest? Blakely looks around her apartment. She's already invested the profits from the Neiman Marcus test into fulfilling the next set of orders by Neiman Marcus. And the two other department stores. But if there was a genuine surge of interest, that stock wouldn't last long. She'd need to figure out how to produce more. So she fibs.
- [30:11]
Kim Kardashian
Absolutely. We'll be ready.
- [30:13]
Narrator
Great. And you have the staff to keep up with the increased workload, Blakely's shoulders tense up. There is no staff. There's just her.
- [30:21]
Kim Kardashian
Yep. Everyone will be thrilled.
- [30:24]
Narrator
Ah, that's great. Excellent. One last question. You have a website that can accept direct orders, right? Blakely doesn't have a website for Spanx at all, let alone one that can accept sales. But how hard can it be to set one up?
- [30:37]
Kim Kardashian
Sure do. It's up and running.
- [30:40]
Narrator
That's fantastic. That's all I need to know. We'll be in touch with more details. As Blakely hangs up the phone, she's in a state of shock and panic. To have Spanx featured on Oprah is a dream come true. But it's clear she's not even close to ready. She'll have to hire a staff, build a website, increase her inventory, and two and a half weeks. If she doesn't, the company she built from nothing will collapse under the weight of success. You know, managing your workforce can be exhausting. Are you tired of a costly and lengthy hiring process? Well, you can simplify and speed up your recruitment with one connection. The experts at Express Employment Professionals reduce time to hire, cut down on interviews, and lower your recruitment costs. Just visit expresspros.com today. Express is more efficient than hiring on your own. Check out ExpressPros.com to see how Express Employment professionals can take care of your hiring. This episode is brought to you by State Farm. You've got to be kidding. It's something you might say when your small business has a problem, but that won't get you the help your business needs. What you should really say is something that can help. Like a good neighbor, State Farm is there. Their agents are ready to help you with your claim, to help you get back in business. On the phone or in person, your State Farm agent is there to help. Like a good neighbor, State Farm is there. It's early November 2000. Sara Blakely ushers a film crew from the Oprah Winfrey show into her apartment. She waves her hand around the living room that's stocked high with boxes.
- [32:42]
Kim Kardashian
This is it. This is Spanx headquarters.
- [32:46]
Narrator
The cameraman shoots, and Blakely smiles nervously. Over the past two weeks, she's scrambled to prepare Spanx for its Oprah debut. She put in a new order with a manufacturer housing the stock in her apartment for direct sales, she called dozens of friends until she found one who knew how to build a website. And she has a plan to bribe friends with pizza and wine to help her send out orders after the episode airs. But Oprah's crew is here to shoot a feature about the company, which will air on the show, and Blakely worries. It's apparently obvious that this is a one woman operation. She's anxious that Oprah's producers will conclude she's not ready for the influx of sales and they'll cut Spanx from the episode. Blakely watches as the cameraman frames different shots of her living room.
- [33:30]
Kim Kardashian
So yeah, this is the staff meeting room.
- [33:34]
Narrator
She laughs to herself. Since a staff meeting is just her talking to herself, the producer shoots his head up. Could we shoot one?
- [33:41]
Kim Kardashian
One what?
- [33:42]
Narrator
A meeting. That'd be great footage.
- [33:44]
Kim Kardashian
Oh, I'm sure. No problem. Just give me a minute.
- [33:50]
Narrator
Blake slips into the bedroom and picks up the phone. She dials a friend's number and paces as the phone rings. Hello? Finally, her friend answers.
- [34:00]
Kim Kardashian
Jane, it's Sarah. What are you doing right now? I'm at work. What's up? Can you do me a favor and take an early lunch? Um, it's barely 10:00 in the morning. What's going on? The Oprah people are here and they want to shoot a staff meeting. Could you get over here and pretend to be a staff member? Tell your boss you have a doctor's appointment or something. I don't know. Please? It'll be super quick, I promise. You'll be back at work in less than an hour. Under an hour. You're sure? I promise. Please, I just really need this. Okay, I'm on my way.
- [34:38]
Narrator
Blakely hangs up and calls another friend. And in 20 minutes, she has a quote unquote staff sitting in her living room. Blakely fudges her way through a fake meeting while the Oprah crew shoots. After a few shots, more of Blakely in her Spanx and her trusty white pants walking around a local mall. The crew has what they need. All Blakely can do now is wait for the air date on November 17, 2000. The episode airs now.
- [35:12]
Kim Kardashian
My next favorite thing is a great invention. Here comes the elves with Spanx pantyhose for all.
- [35:18]
Narrator
Ready to go. Right away, orders come pouring in through the website. Blakely and her friends crowd into her apartment and start mailing them out. But the orders keep coming through the rest of November and all through December. Even past the holiday gift buying season, Spanx continues to sell Both directly and in stores, Blakely has to bring more friends on board. Every night. There are people in her house packing and mailing Spanx around the country. By the end of the year, Spanx has brought in $400,000 in revenue. By early 2001, it's clear that Blakeley can't continue to run Spanx as a one woman show. She brings on two staff members to help with marketing and bookkeeping, and they move into an office building. She also hires a fulfillment center to handle packing and shipping direct orders. But Blakely knows that a successful company needs more than just one product. So she starts to work on developing new ideas. In 2001, she releases Spanx's second product, a Smooth Control Top Fishnet stocking. And then Blakely makes a surprising pivot. She starts selling on qvc, a home shopping network. While merchandise sold on home shopping networks is often seen as downscale and hawked by hucksters, at $20 each, Spanx is priced on the high end of the scale for hosiery. And its presence in Neiman Marcus, Bloomingdale's and Saks Fifth Avenue also signals that it's an upmarket product. Friends still worry that by selling on qvc, Blakely might hurt the brand she's been building for Spanx. But Blakely knows from her experience talking to customers in department stores that Spanx needs to be explained. And QVC is a way for her to explain Spanx to millions of women at once. In May 2001, Blakely begins selling on the channel. She's initially given less than 10 minutes to pitch Spanx to viewers at home. But Blakely's gamble pays off. The phone lines immediately light up. In eight minutes, she sells 8,000 pairs. And the product's still selling well in department stores, too. As Blakely reaches the first year anniversary of Neiman Marcus test order, Spanx is on pace to earn $4 million in revenue. But not everything is going quite as smoothly. Blakely spends much of her time away from the office, either on QVC or doing demonstrations in department stores. Some of the logistics are falling through, especially when it comes to keeping Spanx in stock at the stores. Spanx's success was staggering. Most small businesses take an average of two to three years to become profitable. Spanx was profitable within months. Of course, Oprah's intervention helped. That was lightning in a bottle. Anyone who tells you the business is all about the sweat and knowing your turf, they've never launched a successful business. Luck is a very real thing. And even now, even with Oprah and qvc. The story of Spanx is largely one of organic marketing. People are genuinely interested in this product, not the marketing. That may be fine in the early stages of a business, but success can quickly become too big to manage, much less on the fly, even with close friends. If you really want to go big, at some point you may have to do something that can feel so wrong, so counterintuitive, yet so very, very right. What you gotta do is you gotta let in. 2001, Blakely's boyfriend is in the hosiery department at Saks Fifth Avenue in Atlanta. He's been working as the company's chief operations officer and he's just finished a meeting with the manager of the department. As he's leaving, he spots a well dressed woman in her 30s with blonde hair and bright red lipstick. He overhears the woman speaking to the saleswoman.
- [39:20]
Kim Kardashian
Excuse me, do you have any Spanx in stock? I'm sorry, we don't. You should tell your manager to speak to Spanx about their vendor replenishment plan. I've been trying to find a pair for weeks, but everywhere I go is sold out.
- [39:35]
Narrator
She speaks with such authority that Blakely's boyfriend stops in his tracks. She's not wrong. There are logistical issues that Spanx is having as it continues to grow. Blakely's boyfriend approaches the woman. Hi. I couldn't help but overhear you. I wanted to introduce myself. I'm the COO of Spanx. I'm really sorry you've had such a hard time finding a pair.
- [39:56]
Kim Kardashian
Lorianne Goldman. Nice to meet you. Yeah, I'm getting ready to go back to work after maternity leave and I heard about Spanx. I thought they would help me feel more confident post pregnancy.
- [40:08]
Narrator
Well, look, if you give me your address, I'll make sure you get a pair.
- [40:11]
Kim Kardashian
That's a very nice offer. Thank you.
- [40:14]
Narrator
Goleman hands him her card. Blakely's boyfriend sees that she's an executive with the Coca Cola Company. That must be how she knows so much about this.
- [40:23]
Kim Kardashian
But you know that's not a long term solution. I'm sure I'm not the only customer frustrated. And if potential customers can never get their hands on the product, eventually they'll lose interest. You really need systems in place to ensure that stores have a steady supply.
- [40:40]
Narrator
Yes, you're right. It's definitely something we struggle with. The stores don't want to hold much inventory, so. So it's a constant guessing game.
- [40:48]
Kim Kardashian
You're right. There's a balancing act you have to maintain. But Right now, you're erring too far on one side.
- [40:55]
Narrator
I hear you, and we'll definitely try to do better.
- [40:59]
Kim Kardashian
Good luck.
- [41:00]
Narrator
The two part ways. Back at the office, Blakely's boyfriend excitedly tells Blakely all about the encounter and how knowledgeable Goeman seemed. Blakely doesn't hesitate. She takes Goldman's card, calls her office, and invites Goldman to lunch. The two women hit it off, and Goldman agrees to serve as a consultant to Spanx. As a female executive, Goldman believes strongly in supporting and mentoring other women in business. Goldman is able to provide Blakely with helpful advice. But as the months go on, Blakeley realizes that being a CEO involves a lot of skills that she doesn't inherently gravitate toward. She loves marketing Spanx and coming up with new products, but the nuts and bolts of operational logistics are not her forte. She decides she'd rather hire someone else to take on those logistics. In 2002, Blakely asks Golman to come on as CEO. Goleman agrees, excited for the challenge to build a company rather than work at an established juggernaut like Coca Cola. Once installed, she implements systems and structures to keep Spanx running efficiently. She sets clear targets and focuses on ensuring that Spanx are made at the highest quality. With Goldman handling logistics, Blakely concentrates on product development. Together, they make an unstoppable team. In four years, Spanx launches more than 40 new garments, including a variety of slips and camisoles, bras and maternity wear. Spanx continues to grow in popularity. Soon it's cool to be wearing Spanx. They're so ubiquitous that 60 Minutes even makes a montage of stars admitting to wearing a pair on the red carpet. I wear Spanx.
- [42:45]
Kim Kardashian
Everything looks better in a Spanx. Wearing many accoutrements.
- [42:50]
Narrator
Accoutrements? Is that French for Spanx? Spanx. French for Spanx. Yes, yes. Blakely graces the COVID of Forbes magazine as the youngest self made female billionaire in history. But while Spanx is still selling well, generating revenues at an estimated 250 million in 2011, the truth is sales have started to flatline. Part of the reason is the long tail of the Great Recession, where many Americans have had to cut extras like Spanx from their budgets. But there are more existential problems with the brand as well. By mid-2014, Lorianne Goldman has left Spanx ready for a new challenge, and Nike executive Jan Singer is preparing to interview for the top spot. As she waits for her interview at company headquarters, she shuffles through her notes. She's taking a risky approach with this interview. She's going to tell Spanx founder Sarah Blakely some things she may not want to hear. But if Singer is going to be CEO of the company, then they both need to be on the same page. An assistant approaches and ushers Singer into Blakely's office. Singer shakes Blakely's hand and takes a seat. Then she launches right in. She tells Blakely she admires how Blakely built this company from the ground up, starting with just $5,000 and creating a whole new category. It shows innovative thinking and a true ability to read the market. Blakely thanks her but says she can tell from Singer's voice that a but is coming. Singer nods. It's time to read the market again. It's been 15 years since Blakely invented Spanx. The brand is starting to look dated. Body positivity is on the rise, and some of Spanx packaging and marketing can come across as fat shaming. And fashion trends are changing too. Comfort is the priority for many consumers. She points out that Athleisure, which includes yoga pants and tracksuits, has taken off. Singer leans forward. Spanx grew successful very quickly, but if it doesn't adjust itself to new market realities, a new approach to shapewear could come along and make Spanx look as old fashioned as the girdles Blakely tried on in that department store all those years ago. Singer leans back. She's made her point. Spanx is at a precipice. What happens next is up to Blakely. If you like Business wars, you can binge all episodes early and ad free right now by joining Wondery plus in the Wondery app or on Apple Podcasts. Prime members can listen ad free on Amazon Music. Before you go, tell us about yourself by filling out a short survey@wondery.com survey from Wondering. This is episode one of Spanx versus Skims for Business Wars. A quick note now about recreations you've been hearing. In most cases, we can't know exactly what was said. Those scenes are dramatizations, but they're based on historical research. If you'd like to read more, we recommend the Spanx story by Charlie Wetzel and Stephanie Wetzel. I'm your host David Brown. Austin Rachlis wrote this story. Our producers are Tristan Donovan of Yellow and and Grant Rudder. Sound design by Josh Morales. Voice acting by Chloe L. Moore Fact checking by Gabrielle Drollet. Our managing producer is Desi Blalot. Our senior managing producers Callum Plews. Our senior producers are Emily Frost and Dave Schilling. Karen Lowe is our producer emeritus. Our executive producers are Jenny Lauer Beckman and Marshall Louie for Wondery. And now a next level moment from @t business. Say you've sent out a gigantic shipment of pillows and they need to be there in time for International Sleep day. You've got AT and T5G so you're fully confident, but the vendor isn't responding and International Sleep Day is tomorrow. Luckily, AT&T5G lets you deal with any issues with ease, so the pillows will get delivered and everyone can sleep soundly, especially you. ATT 5G requires a compatible plan and device coverage not available everywhere. Learn more@att.com 5G Network.