Hanna Andersson Reaps What It Sews -- Benefits Give Retailer A Boost

PORTLAND - Gun Denhart founded Hanna Andersson Corp. to make children her customers and ended up making them part of her corporate family.

The clothing company she started 11 years ago when she couldn't find the simple cotton clothing she wanted for her 3-year-old son has grown into one of the most successful mail-order retailers in the nation.

The soft Scandinavian bent of her kids' clothes are also a symbol of the generous employee benefits Denhart imported from her native Sweden, including 50 percent reimbursement for child-care costs, flexible scheduling, profit sharing and days off to take care of sick children.

"I'm a mother myself and I know that when you are worried about child care you can't concentrate on what you're doing," Denhart said, adding that it was years before she realized few other U.S. companies offered this benefit.

"I'm from Sweden where the government mandates this type of thing," she said.

The Hanna Andersson mail-order catalog now circulates to 15 million people and the company, which had $44 million in sales last year, employs 260 workers at its Portland headquarters. A distribution center is located in Louisville, Ky.

Denhart, tall and precise, yet quick to laugh and with only a trace of a Scandinavian accent, says she started the company when she couldn't find decent cotton outfits for her son, Christian, then barely past the toddler stage.

"Everything was polyester," she said. "The clothes were not soft to the hand and only lasted a few washings. I thought, `Why can't I find the clothing children wear in Sweden?' "

Denhart, a financial manager, and her husband, Tom, guessed, correctly, that the public wanted simple, well-designed children's clothing that could be purchased without entering a store.

They went to Sweden and found a manufacturer to supply the clothes. The couple moved from New York to Portland and named their clothing company Hanna Andersson, after Denhart's grandmother.

Her company and her son have grown like weeds.

But after making a profit every year since she started Hanna Andersson, Denhart finally has been forced to re-examine company operations.

Twenty employees were laid off when sales fell 20 percent in spring 1993 as competition increased and the economic climate worsened.

"It was very hard to lay off people, but it's the first time it happened and 90 percent of them were rehired," Denhart said.

She said a new management team has helped turn around the privately held company and the Japanese market has proved lucrative, but she stressed that the mail-order children's clothing industry is more competitive than ever.

While acknowledging that the company is faced with major challenges, she said there has never been any thought to doing away with generous employee benefits, such as the child-care reimbursement.

"I really think those benefits are why we are where we are today," she said, explaining that the company has had great success in retaining employees. "You have to recognize people have a life outside of their job."

Working Mother magazine included Hanna Andersson on its "100 Best Companies for Working Mothers" list last year.

David Wolf, a trend forecaster for the Donnegur Group in New York, says that despite the increased competition, Hanna Andersson, is still the industry leader.