Kids, Clogs And Cotton -- Hanna Andersson Is One Of The Hottest Children's Wear Companies In The U.S.

Hanna Andersson catalogs are available by calling 1-800-222-0544.

PORTLAND - The woman usually confused with Hanna Andersson laughs when asked if she roams the streets of her native Sweden looking for fashion trends for children.

"No, I don't see clothes," she says. Then she backtracks. "Well, I do see clothes, but from a different point of view. I see the practicality. Does it make sense? Can it take lots of washes? Will it hold up?"

Sitting in her sunny, simply decorated corner office in this city's historic Pearl District, Gun Denhart at first seems a bit too down to earth, a bit too uninterested in fashion to be the chief executive, co-founder and inspiration behind Hanna Andersson, a mail- order business selling children's clothes that, in annual sales growth and marketing cachet, is one of the hottest children's wear companies in the nation. Customers pass catalogs to friends and new mothers in the same way they'd pass on cherished recipes or the names of good pediatricians.

Hanna Andersson is a fashion business. But on this morning, Denhart, 46, is dressed comfortably though hardly fashion forward. She is stockingless, striding briskly around her company's headquarters in a pair of flat, soft-soled shoes that look like the sturdy, buckle-and-strap sandals worn by European children. She is a vision of courteous efficiency and competency - the sort of sensible woman you'd expect to find heading a research laboratory, or running

a private girls' school.

Yet in the eight years since she and her husband and co-founder, Tom Denhart, started the business, Gun Denhart has shown a keen understanding of fashion trends, demographics and consumer culture. Company sales have mushroomed to an expected $40 million this year, up from $34 million in 1991. That's peanuts compared to some of their biggest competitors, such as GapKids, which has estimated sales of about $260 million.

But Hanna Andersson is an inarguable success considering that it's been less than a decade since the couple was operating out of their Portland garage with one employee and sending out catalogs put together in a few weeks by Tom, a former advertising executive. Denhart says the company, which is solely owned by her and her husband, has always been profitable.

Landing on the right fashion trends before most of their competitors accounts for part of Hanna Andersson's success. From the start the company has sold well-made, practical clothes for children that are mostly all cotton and mostly knit. Colorful and cute without being frilly or fussy, the clothes have a simplicity that suggests the clean, economical lines of Scandinavian design. Accessories sold include wooden clogs, ski hats in traditional Scandinavian patterns, and mukluk slippers.

A signature Hanna Andersson outfit for a little girl is a long-sleeved, collarless knit dress gathered into a yoke well above the waist. This season it comes in purple with emerald green horizontal stripes, or red with azure blue stripes. Coordinating leggings are sold with reverse color schemes. A typical little boy's (or girl's) outfit is a bib overall in wide-wale corduroy in bright, primary colors, teamed with a contrasting striped knit T-shirt.

"One thing we will never do is cross that line where children are turned into fashion victims," said Susan Fisher, the company's chief designer and a former designer for GapKids, which is this fall selling a $100 black leather motorcycle jacket sized for the preschool set - exactly the type of clothing that Fisher says Hanna Andersson will never market.

"Hanna has a particular point of view," Fisher said. "The clothes must be tasteful and functional, never gimmicky, but they must also be clothes kids can wear every day."

Pricewise, Hanna Andersson's clothes fall in the moderate to upper range: the corduroy overalls are $38; the striped girl's dress is $34 with coordinating leggings at $18. Still, loyalists such as Ginny Gilder, a Seattle business woman and mother of three children aged 4 months through 3 1/2 years, say the quality is worth the price.

"I just ordered $500 worth," said Gilder. "They have great colors and it really does last longer. The zippers don't break, rarely do the snaps get holes around them. It's expensive, no question about it, but you have to pay for quality."

Gilder says she also appreciates the convenience of catalog shopping, which makes her typical of many working women today, said Rosemary O'Brien, executive vice president of The Muldoon Agency, a New York direct marketing consultancy.

Direct marketing, including catalog sales, is expected to grow 4 to 6 percent this year, O'Brien said, and companies that offer good customer service and a quality product shouldn't be much affected by the discounting that now pervades the retail industry. Said O'Brien: "You're talking about convenience, and people will pay a little more for it."

The formula between high quality and what Gun Denhart agrees are not inexpensive prices is part of Hanna Andersson's credo.

"Swedes are very practical," she said. "My grandmother used to say that buying cheap was too expensive because you soon have to buy again."

Denhart's long-deceased grandmother, whose formal, turn-of-the-century portrait is sometimes shown in the catalog, was the original Hanna Andersson. Denhart chose to name the business after her grandmother since her own name, Gun, (pronounced somewhere between "guhn" and "goon") would hardly conjure up sweet images of children's wear to English-speaking customers.

The seeds of Hanna Andersson started in the early '80s soon after the Denharts' second son was born. Unable to find the soft, cotton infant clothes she remembered from Sweden, she and her husband figured there might be a niche for a natural-fiber children's wear business in the U.S. To test their theory, the couple traveled to Sweden and bought the kind of clothes they couldn't find here, brought them back, and gave them to friends with children. The clothes won raves, and the Denharts' business was born.

So Tom and Gun, who was then the financial manager of an international language school, sold their Connecticut home and moved to Portland, Tom Denhart's hometown. At first they imported Swedish clothes that conformed to their tastes. But the couple was soon placing orders for unusual colorations. Eventually they were designing their own. All of the company's apparel now is designed by their in-house team. About half is manufactured in the U.S. - some of it in a factory a block away from corporate headquarters that is 25 percent owned by Hanna Andersson and 75 percent owned by a Swedish apparel manaufacturer.

Getting in early on America's switch to natural fibers was only one of their smart moves. Gun Denhart notes that the company's entry into mail-order shopping also coincided with a wave of births, especially to affluent baby boomer parents who, now that they were finally having children, could afford to give them the best. Meanwhile, those same dual career couples had less time than ever to shop, sending a growth spurt through the mail-order business.

"There's no question that we had some of the right ideas at the right time," she said.

These days Hanna Andersson has plenty of competition. There are dozens of children's apparel catalogs, and every retailer and manufacturer in America is trumpeting its natural-fiber lines. Meanwhile The Gap - the behemoth retailer that has already munched into the sales of virtually all adult apparel stores - is aggressively opening its BabyGap and GapKid's stores where all-cotton, back-to-the-basics apparel for children is selling just as quickly as the company's adult wear.

Gun Denhart, who holds the Swedish equivalent of an MBA and says she is happiest when dealing with numbers, finance and organizational tasks, worries about competition. After giving a reporter a thorough tour of the company's headquarters, from its offices filled with potted plants and Scandinavian antiques to its state-of-the-art mail order facility, she asks earnestly if the reporter sees anything that could be changed or improved. A self-described worrier, she says she feels "pretty good" about Hanna Andersson's operations and business outlook at the moment. "Though things aren't under total control, they never are. But it's comfortable now."

Current business priorities include a continuing push to offer clothes that appeal to older grade school children and their mothers. Though the company at first sold only infant and toddler clothing, it now sells apparel that fits girls and boys up to 10 or 11 years. The company also sells a few comfortable, at-home knit pieces for women, such as leggings and oversized cotton tunics.

And although Hanna Andersson has one retail store on the ground floor of its corporate headquarters, and one factory outlet in Lake Oswego, Denhart says she doesn't anticipate opening more retail outlets in the near future, despite the company's brief foray into wholesaling to retailers in the mid-'80s.

"We have talked about it many, many times," Denhart said. "But retail is a different kind of business. It doesn't mean we're never going to do it."