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Business Observer Friday, May 18, 2012 6 years ago

Sex Apparel

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Former TV star and comedian Rhonda Shear has broken a lot of molds. But creating a global company growing at a torrid pace may be her most shocking.
by: Rod Thomson Staff Writer

Face it. Rhonda Shear is about as atypical an entrepreneur as you will find.

Shear was a TV cult goddess of the 1980s, the sex kitten of “USA: Up All Night,” where she augmented B movies every Friday night with her ample talents.

She had roles in dozens of movies and TV shows in the '80s and '90s, and she appeared on magazine covers from ShowBiz to Outlaw Biker to Comedy. She even made the cover of National Enquirer with the blaring headline that she was going to have alien twins! When her past-peak body was not quite what Hollywood was demanding, she became a standup comic, working L.A. nightclubs and still adding in plenty of edgy, curvy glitz.

That was then. This is now. It turns out Rhonda Shear was never the ditzy, bubble-headed blonde as she was often cast. Shear is the founder and CEO of St. Petersburg-based Shear Enterprises, the third-fastest growing woman-owned company in the nation, with a global distribution and manufacturing network.

Now 57, Shear is being written about in the Wall Street Journal, Tampa Tribune and other business and news publications.

Her company is an intimate apparel firm aimed at women of all shapes, not just the young and thin. Her most successful item is the Ahh Bra, priced at $19.95 on her website, which she has sold 25 million of in the company's history. And the company has about 2,400 products total in its stable -- nearly all designed by Shear.

But she is still who she was in many ways. The front of the rapidly crowding Shear Enterprises headquarters, in an office-industrial area just south of St. Pete-Clearwater International Airport, is festooned with mannequins in ladies' undergarments. The scrunched foyer has a dark pink and purple, frilly couch and a chair adorned with zebra-striped pillows. Framed magazine covers and stories line the walls while boisterous laughing bounces through the open office area as the female-dominated staff create new products and ways to market them.

The employees will often test out the undies, prancing through the office to see what works and what doesn't. They cut time lags by market testing while they create. When the product is right, Shear takes to the airwaves, appearing on the Home Shopping Network, the Shopping Channel, QVC in foreign countries and innovative infomercials.

In myriad different ways, Shear Enterprises is not your normal business.

“I'm having a blast. I'm a very happy senior,” Shear says from a cramped office undergoing change typical for a rapidly expanding company. “I'm loving it, loving it, loving it. Just a little sleep-deprived.”

And yet, Shear faces many of the same challenges that every entrepreneur does in trying to build and expand a business. The two biggies for her: Finding the right people and keeping manufacturing quality high and deliveries on time.

Along with her husband and business partner, Van Fagan, Shear is leading her company to explosive revenue growth — 1,485% in the past two years.

That stunning growth has led to Shear being named the Gulf Coast Business Review's Entrepreneur of the Year.

Cajun roots
Shear has been breaking molds for a long time.

The youngest of four children growing up in New Orleans, Shear won the first of 40 beauty pageants when she was 16. Titles include Miss Louisiana and competing in the Miss USA pageant.

She earned a communications degree from Loyola University and was accepted into Loyola Law School. But the law route was interrupted by perhaps the most important, but little known, beauty pageant title she held: Miss Floral Trails Society.

While holding the crown, she did a spread in Playboy, fully clothed in an ante-bellum hoop skirt. But the president of the society did not appreciate the association with Playboy and had her dethroned. That president was also the New Orleans Register of Conveyances, an elected office. In a brash attempt at retribution suggested by her sister, Shear ran against him to become the youngest woman to run for office in New Orleans at 21 years old. Shockingly, she nearly won, losing by only 134 votes.

The controversy over losing the beauty pageant title and the close election gained her national, if temporary, notoriety and she immediately packed her bags and headed to Hollywood.

“That forever changed my life,” she says of the lost election.

Her Hollywood break came in the form of comedic icon Bob Hope, who saw her and immediately put her in one of his specials, which led to a role in TV's “Happy Days.” From there, her career would include roles in the movies “Galaxina,” “Basic Training,” “Spaceballs,” “Assault of the Party Nerds” and “Prison-A-Go-Go!" and the TV programs “Happy Days,” “Dallas,” “Chips,” “Hart to Hart,” “The A-Team,” “Three's Company,” “Duke's of Hazzard,” “Cheers,” “Married With Children” and “Silk Stalkings.”

But she is best known for her role in “USA: Up All Night,” a long-running Friday night marathon of mostly B movies she hosted, doing live skits with humor and a generous dose of sex appeal. Playboy named her “One of Television's Sexiest Stars.” But while she traded on her female allures, her mind was what set her apart. For the second time, she was blazing a new trail. The Los Angeles Times wrote at the time, “She may not look the part, but Rhonda Shear is a comedy pioneer.”

So when her physical attributes were no longer enough to meet Hollywood's insatiable appetite for youthful perfection, she shifted into comedy, where her sharp mind took center stage. She opened for Smokey Robinson, Al Jarreau and The Temptations, and appeared on several cable comedy shows.

Shear had never married in 26 years, but in 2001, she reconnected on classmates.com with the childhood sweetheart who had jilted her. Fifteen days later they eloped. And her life was about to change again.

Birth pangs
Shear never had children, but she birthed a company from a vague notion while doing comedy. She loved designing women's intimate apparel and asked Fagan if he would build her a website to sell some. He was a successful businessman in his own right, having started and sold oil-industry software businesses in Louisiana.

Early in the process, she reached out to St. Pete-based HSN, leveraging her name.

“They were looking for celebrity types, and they were kind of in dire need and our timing was right,” she says. “They purchased 6,400 pieces from us and we went on air, self-financed.”

That first gig on HSN was in 2003 while the couple was living in Beverly Hills. It was an instant if modest success as Shear pitched the seamless bra that she really liked because it was forgiving and worked on larger women. “It was new at the time,” she says.

Shear wanted to go back on HSN quickly, but Fagan knew they needed to ramp up production — the regular tension the two have keeps the business in balance. Three months later, they were back on HSN and Shear Enterprises began to grow with products under the Rhonda Shear Intimates label.

The couple was commuting from Beverly Hills to St. Pete when they teamed up with a Montreal equity firm to sell their best product, the Ahh Bra. A name derived when Shear let out a long, “ahhhhh” before “bra” while on air.

As the business grew, the commuting was getting too much. So they moved to St. Pete. “We immediately fell in love with the area,” she says. They developed an entire line for HSN but made the mistake of bowing to HSN executives' advice for tailoring it. The line tanked and they returned to what they knew -- Shear's gut-level tastes on what women want.

They were growing exponentially the first few years, doubling and tripling revenues each year. But like many, the business took a hit in 2007 as the recession began. Plus, they opened a retail boutique in 2007 that only broke even after a few years. Realizing their bad timing, they closed it. Furniture from the boutique now garnishes their new, crammed offices.

The real breakthrough for Shear Enterprises came when they took a risk and invested heavily with a Canadian partner in an infomercial.

“We came up with a whole new model for infomercials,” she says. Most infomercials are set to get eyes so they can make real money when they retail their products. “We rolled it out at the price we did on HSN,” she says, and the infomercial itself made money.

That success led to rapid expansion with other television outlets.

Shear Enterprises now has its products on HSN regularly, the Shopping Channel, the infomercial and QVC networks in the United Kingdom, Italy, Japan and Germany. Plus, the Ahh Bra and other Rhonda Shear Intimates products are on shelves in 66 boutiques, plus Wal-Mart, Walgreens and Big W in Australia.

Business building
Shear says it has taken a long time to build the leadership in the company with the people she wants.

Two of her top people came from the failed boutique retail store. They had proven their grit and resolve in the boutique and now have executive positions with the company. The former store manager is head of retail sales of Shear.

“It takes time to get the right people. They need to have the passion for it,” she says. “We have this fun group here. We're surrounded by a great team, and that has taken time.”

Designing her products is one of the easiest and most fun parts of the business for Shear, but they are always pushing forward.

“We stay ahead technologically with products and fabrics that cool you down, warm you up,” she says. “I don't watch to see what my competitors are doing...I just do my own thing.”

Building the manufacturing network has been a challenge, and one that most Gulf Coast product companies can appreciate. Shear needed a combination of price and quality, but she tilts toward the quality and paying more.

So they have manufacturing contracts with companies in Taiwan, Toronto and the United States. But their primary knitting mill is in Israel because “they're consistent with quality,” she says.

Shear and Fagan have had to travel globally more often to create relationships and iron out contracts, and that eats into design and promotion time. So she is back to staying on the lookout for more key employees to whom she can entrust components of the growing company.

Key to their survival in the downturn was not having any debt. Without that overhead, they were able to keep operating until the infomercial success struck.

They bought an 18,000-square-foot office and warehouse last year and completely renovated it — all with cash. Shear emphasizes they do not want debt and intend to grow organically with the exception of the one Canadian equity investor.

But the warehouse is bursting with product and the offices are packed. The planned showroom has all but vanished and they are probably going to have to look for something bigger again.

Shear's life as an entrepreneur is a whirl of meetings, designing, marketing, hiring and firing, strategic planning and live TV shows — all but the last one common to all business owners.

Shear says she has loved every stage of her life. The beauty pageants, sexy Hollywood starlet, comedian and entrepreneur. She is certainly a bubbly in person as she was on TV 25 years ago. It was not an act. It was her.

She and her husband recently bought their first “big” house -- a 10,000-square-foot mansion on Snell Island that used to be owned by Steve Raymund, chairman and former CEO of Tech Data.

“I'm surprised. I never expected to be doing this,” she says.

But then, her entire life has been marked by the unexpected. Will Shear Enterprises be the last surprise?

That would be unexpected.

Not flattered by imitation
An ugly downside of the apparel industry is that there is almost no way to patent a popular product. It is too easy to change just enough to bypass a patent, which is therefore rarely attempted.

And so the company has had to deal with about a dozen companies who essentially copy what Shear and others do and churn out knock-offs with just small changes in them.

“Copycats started popping up like rabbits,” she says of the point when sales really took off.

The owner of one particular company ran into Fagan at a trade show and bluntly told him that his company copies everything Shear Enterprises does. The only thing he said he didn't have was Rhonda.

Because of name infringement and other problems, Shear spends time and money to legally stop cheating competitors. As Shear says, “We're ceasing and desisting all the time.”

Understandably, this sort of imitation doesn't thrill her. But she rolls with it, recognizing there is nothing to be done but keep innovating and pitching product. “It's kind of frustrating, but it is what it is.”

Part of that innovation is adding a swimsuit line, which is under development, and creating new TV projects.

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