Booms and Busts

Standing underneath the so-called Eye Candy Wall in her Manhattan boutique, Susan Nethero—bra mogul, self-esteem guru—is in the middle of yet another exhausting day. Despite flying in from Atlanta to tape a segment for the Today show, her boundless enthusiasm for bosoms remains evident. In five-inch heels and still caked in TV make-up, Nethero surveys an array of undergarments—with brand names such as Panache, PrimaDonna, and Fantasie—before she stops at a purple number with a Barbie-pink trim. "This one goes up to F cup," she says with delight. "Last year we sold 70,000 bras that were G cup and up!" Nethero then moves on to the satin cup of a sky-blue bra, another favorite. "We convinced this manufacturer to put in removable cookies," she says, referring to the bra's oval demipads. "If someone is a different size from one side to the other—which one in four women tell us is the case—we can have them fit perfectly."

This profound concern for servicing women of all shapes and sizes has helped Nethero, 58, amass a veritable undergarment empire. Unlike most bosom emporiums, Nethero's lingerie chain, Intimacy, requires that all its customers be fitted for their bra. This extra layer of service has helped the company expand to 15 stores and a staff of nearly 220. Included among its ranks are nearly 100 professional bra fitters—all of whom must first survive a week-long "bra boot camp," which Nethero describes as "an MBA for bra fitting." Last year, Intimacy fitted almost 200,000 women, says Nethero, and sold more than 290,000 bras. According to Belgian bra manufacturer Van de Velde, which bought a majority stake in the company last year, Intimacy generated $35.5 million in sales for 2010, a 27.5 percent jump from the previous year. Later this month, Nethero will open her 16th boutique, in McLean, Va.

Nethero entered the bosom-fitting trade after working in marketing for companies such as Xerox (XRX) and Time Inc. (TWX). Throughout her career, she had grown frustrated with the fit of her undergarments and sought refuge in European bra offerings that came in a wider range of sizes. While looking for bras one day, she had an epiphany: Perhaps other women were struggling with the same problem. Soon after, she decided to begin a new career dedicated to busts and, she says, "changing women's lives."

In 1992, Nethero opened her first Intimacy store in Atlanta with an extensive selection of European brands. She solicited the help of June Kenton, the recently retired royal bra fitter for the Queen of England. Over dinner, Kenton told Nethero that she could revolutionize her business by focusing on fittings, not sales. As a result, Intimacy offered a half-hour of pampering that showed customers how properly fitted lingerie could transform their figures, style, and, more important, self-image. Nethero's bra fitters were instructed to teach women how to look like they'd lost 10 pounds or regained the lift of 10 years ago—all without a gym membership or plastic surgery. It soon became the store's trademark. "There were never any uncomfortable moments of judgment," says Jessica Ghilani, a customer and professor at the University of Pittsburgh at Greensburg. "They have back pain, their clothes didn't fit, it didn't look good. All of those problems are solved," Nethero says, "just with a bra fitting."

Intimacy's big break occurred in 2005 when word of the bra whisperer reached Oprah Winfrey, who invited Nethero on her show. During a cathartic segment about "bra violations," Winfrey launched into a proclamation that every woman needed to get a bra fitting—and within months, Nethero had opened satellite locations in Chicago and Boston. More than a dozen stores later, Intimacy has become a player in a market dominated by Victoria's Secret, the Goldman Sachs (GS) of ladies' underwear. Though Victoria's Secret can claim haute undergarment domination with more than 1,000 locations and more than $4 billion in 2010 sales, it may not be invincible. Marshal Cohen, chief industry analyst for market research firm The NPD Group, says accessibility is no longer a game-changer in the lingerie trade, especially since Gap (GPS), J. C. Penney (JCP), and Filene's now offer a wide range of styles. These days, he explains, customers are more interested in quality. "There is no way that a brand can easily compete in the high-end market without something uniquely special," Cohen says. "With intimates, comfort and fit are way up high in the chart, and price is a lot less sensitive. In other words, you want to remove price from the equation."

Intimacy aims not only for quality but also for choice: Each store carries approximately 15,000 bra styles in more than 90 sizes, from A to K cups. Bras sell for an average of $90 a piece—they're about $49 at Victoria's Secret—but the company's growth still relies on bra psychology. "Most women associate the fit and the comfort problems with body issues," says Nethero. "We're like, 'No, no, there's nothing wrong with your body!' It's all about getting the right fit." Fitters work with an average of 18,000 women per month, and Intimacy offers online services that advise customers on age-old bra dilemmas, from "lift" to "spillage." "That's a plus," Cohen says of the fitting service. "It's a huge piece that's missing from the rest of the market."

Early on, however, many Intimacy customers were flustered by the idea of having a bra fitter enter their changing room. Some would even lock the fitters out. "So we took the locks off!" recalls Nethero. Her husband, David Nethero, a former Amoco executive who joined Intimacy in 2001, remembers there was, and still can be, "an embarrassment factor. But we want [the customer] to feel as beautiful, if not more beautiful, than when she walked through the door."

This bra psychology continues to work. Bolstered by Nethero's regular appearances on Oprah and Today, Intimacy plans to open four to five stores per year to keep up with the demand. "I hear of women going home and flashing their husbands or best friends to show off their new bra," Nethero says with pleasure. After her first appearance on Oprah, Nethero says, the talk queen called to say she'd just been flashed by a fan after her bra fitting. Oprah did not return the favor.

    Before it's here, it's on the Bloomberg Terminal.