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Hot Chillys: Cool Skivvies for Ski Bums

San Diego County Business Editor

The past few years have been unkind to many ski-clothing and equipment retailers as the steeply rising cost of a ski holiday has deflated the enthusiasm of consumers, particularly families, for the once-voguish sport.

Sales of ski clothing and equipment nationwide have leveled out at the $1.3-billion level in recent years while annual ski resort visits, a widely followed industry barometer, have stalled at between the 50 million and 54 million range, according to industry sources and published reports.

But you would never guess the industry is having problems from the activity at Hot Chillys Inc., a Del Mar-based sportswear company that makes and merchandises one of the country’s hottest-selling lines of thermal underwear and pants for skiers.

Bucking Storm Warnings

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Founded by sportswear executives who opted out of big corporate jobs, Hot Chillys is sailing against industry storm warnings. The company’s sales will total $6 million for the 12 months ending in February, its third full year of business, President Chet Thompson said Monday. That’s up from $2 million last year and $500,000 in the inaugural year.

The success of Hot Chillys is based on the company’s tapping into American consumers’ increasing demand for “body wear"--the tight-fitting but comfortable sports clothing made of largely synthetic fabrics that allow body contours to stand out in bold relief.

Made of a fabric that includes polypropylene, lycra and wool, Hot Chillys underwear is warm yet flexible and allows body perspiration to escape through perforations in the fabric, keeping skiers dry. In the past, thermal underwear “always fit miserably,” Thompson said. “Either the crotch was halfway down to your knees or the pant legs weren’t long enough,” Thompson said.

Hot Chillys underwear, which retails for about $33 a pair, has also benefited from innovative merchandising. The product comes packaged in ring-top containers much like the cans used to package peanuts and cashews. The cans come packed in wood boxes resembling vegetable crates that can be used for display.

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Before Hot Chillys, thermal underwear was pretty much a price-sensitive commodity difficult to merchandise imaginatively, Thompson said. By giving the underwear and ski pants such names as Cayenne and Jalapeno and putting them in cans, Hot Chillys changed all that.

The merchandising approach is apparently a winner. Hot Chillys products are being sold at the tony New York department store Bloomingdale’s and appear in the Nordstrom Christmas catalogue. Ski shops in the Los Angeles area and at Mammoth Mountain say they can’t keep enough Hot Chillys in stock to meet demand. One of the shop windows at Mammoth now displays Hot Chillys underwear arrayed among fresh green and red peppers, said Cathleen Erickson, a buyer for the Mammoth Mountain Ski Area, which operates six ski merchandise shops.

“We do unbelievably with Hot Chillys,” Erickson said. “Not only is the product great, but the packaging and literature on the can is a wonderful concept.”

Not So Hot in San Diego

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Patricia Bergstrom, co-owner of Sport Ltd., a Woodland Hills store that is one of the Los Angeles area’s largest ski retailers, said Hot Chillys underwear and ski pants are among the “hottest products” in the store.

The Sport Chalet outlet on Midway Drive in San Diego, however, said sales are “not that spectacular. They’re selling out better in our Los Angeles stores than here,” department manager Wendy Penesk said Monday. “They’re not as known in San Diego yet.”

Thompson, before founding Hot Chillys with Ray Bolton and Guy Wells, was national sales manager of Seattle-based Roffe Ski Wear, a leading ski pant manufacturer. Before then, he was vice president for retailing at Stanley Andrews Sporting Goods, a San Diego-based chain that has since been sold to La Canada-based Sports Chalet.

At Roffe, Thompson watched as the ski equipment and clothing industry experienced a downturn after the go-go period of the 1960s and early ‘70s. “Skiing was the happening sport of the time. In James Bond movies, in Pepsi commercials, everyone seemed to be into the ski thing. It gave a chic image,” said Thompson, 42.

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During that time, salespeople “didn’t have to beat down doors to make a sale,” he said. The sales staff at Roffe would send potential clients post cards with information about where and when they could be reached if customers “wanted to call for an appointment.”

Flooded the Market

But that changed by the late 1970s as a glut of merchandise flooded the market. At the same time, dramatic growth in the skiing population leveled off as resorts priced themselves out of many families’ budgets. “Lift tickets are $35 a day now, compared with $12 10 years ago,” Thompson said.

To succeed in the new market, ski apparel and equipment companies had to respond quickly to changing demands. Frustrated by Roffe’s slow response, Thompson quit the “corporate box” and spent most of the summer of 1985 on the beach at Del Mar pondering his future.

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His and Bolton’s idea was to sell underwear--but only stylish and form-fitting underwear.

“I knew from my days at Stanley Andrews that there was good volume in underwear. Sales were always pretty stable, and all you needed was cold weather, not necessarily snow,” Thompson said. “The field was open because it wasn’t fashionable. All the big egos wanted to be in ski clothing design.”

Thompson and Bolton joined forces with Guy Wells, a clothing “engineer” who operated a San Luis Obispo-based contract clothing manufacturer. Together they came up with an innovative fabric, a “techy” weave of polypropylene, lycra and wool that “wicked” moisture off the body, or drew it through perforations to keep the wearer dry.

Despite Hot Chillys’ fast growth and multimillion-dollar revenues, the company has only eight direct employees. All sales are done by field representatives who are independent contractors. All manufacturing is done under contract to Wells’ plant in San Luis Obispo, which employs 135.

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