Before converting a set of handkerchiefs into a bra and panties that began a 40-year career for her and her best friend, Gale Epstein dabbled in many varieties of D.I.Y.
“I had a lot of stuff from her,” said Lida Orzeck, 70, Ms. Epstein’s business partner and longtime friend. It was a cold afternoon in March, and she was seated next to Ms. Epstein, 71, at a long white table at the Park Avenue headquarters of Hanky Panky, the underwear company the two women founded in 1977. “You were getting jeans from vintage shops, then you sewed up the bottoms or something and made them into pocketbooks.”
“That was my denim period, yes,” said Ms. Epstein, a Parsons School of Design graduate. “I had a suede period too. That was your first wedding dress. That was pre-Hanky Panky, so that was suede and appliqué. The second was during Hanky Panky, so it was hand-embroidered silk scarves that we were using in our line.”
“My wedding dresses are only two out of, what, 10?” Ms. Orzeck said. “Gale also has a lot of sisters and other friends.”
“They’re not conventional dresses,” Ms. Epstein said. “But anyway, I don’t design conventionally.”
Conventional or not, Ms. Epstein’s designs have certainly proven popular. The thong she created for Hanky Panky in 1986, known simply as 4811 and priced at about $20, is still a top-selling item for the company, which counts Rihanna, Beyoncé, Angelina Jolie, Cameron Diaz, Emma Watson, Eva Longoria, Kim Kardashian West and many others as customers.
Thongs, which Hanky Panky produces in a rainbow of hues and several styles, make up more than half of the company’s $50-million business. The other half is made up of different types of stretchy, form-fitting bottoms and lacy, colorful bras.
The company’s products have all been made in the United States — primarily in the New York area — since its founding, a considerable feat given that the number of manufacturing jobs in the city has been declining since the 1950s and significantly dropped after 9/11 as one apparel company after another has moved production overseas.
In October, Hanky Panky’s employees — a significant portion of whom work at a 90,000-square-foot multiuse warehouse in Queens — discovered that they would soon be part owners of the company. At a party celebrating Hanky Panky’s 40th birthday, Ms. Epstein and Ms. Orzeck announced that the company had established an employee stock ownership plan, which transfers the ownership of the company over to a trust for the benefit of its workers.
An ESOP is similar to a 401(k) but does not require employee contributions. The right to shares will be earned after six years of working continuously full-time. When employees leave the company, they retain their vested ownership until attaining full retirement age, and upon retirement they can redeem their shares. “Gale and I are still in charge,” Ms. Orzeck said. “But we no longer wholly own the company.”
One need not fear that the next Tanga panty’s design will be crowdsourced. “I’m still the last word on fit,” Ms. Epstein said. “Of course, we make all sizes and we have our in-house focus group, but I’m still involved in the look and feel of everything that comes through the design room. I don’t even trust models to give me exact feedback.”
Ms. Orzeck said, “Gale is supersensitive.”
‘Counting From the Crotch Area’
At the company’s warehouse last month, Rodney Yetter, Hanky Panky’s quality-control manager, explained how his team contributes to a customer return rate that is one-tenth of 1 percent.
“Any type of thing that goes wrong with these is the same type of thing,” Mr. Yetter said. “Human error is easy to find if you know where to look for it. A lace with runoffs, a skipped stitch on a machine. If you’re counting from the crotch area, it’s easy to spot.” He added: “Ninety percent of the returns are because of fit.”
Many of the thongs are “one size fits most” and fit sizes 2 to 14. In a world that requires endless size calibration, this is surely a relief to customers (petite and plus sizes are also available). “We offer an assortment of brands, but Hanky Panky continues to be a category leader,” David Law, the chief merchant at Lord & Taylor, wrote in an email.
Lord & Taylor was the first store to receive an order from Hanky Panky, in 1977, when Ms. Epstein and Ms. Orzeck personally delivered 144 tops and bottoms that Ms. Epstein had spent an entire weekend sewing.
The design that had lured the store’s buyer was a bra-and-bikini set that Ms. Epstein created from Victorian-era handkerchiefs she found in a bridal shop and gave to Ms. Orzeck as a birthday gift. An original version of the set is in the Metropolitan Museum of Art’s permanent collection.
Ms. Orzeck took the lead on sales, despite having little experience in the area. She had a doctorate from Columbia University in social psychology and her first job out of graduate school was assessing how the New York Police Department interacted with victims of sex crimes.
“Boldly, as if I knew what I was doing, I called up stores, asked for buyers, made appointments,” Ms. Orzeck said. “They all saw me. Because that’s the way business was done then.”
The department stores were quick to place orders, but soon bigger companies began copying Ms. Epstein’s designs. “We lost the department-store business because they were looking for low price and high volume,” Ms. Orzeck said.
The Thong That Changed Everything
In 1986, Ms. Epstein developed her version of the thong, a slightly more modest version of the “G-string” that had long been worn only by strippers and prostitutes.
“One of the reasons the thong became important in the 1970s and ’80s is that more women were wearing pants, so the visible panty line became an issue,” said Colleen Hill, the curator of costume and accessories at the Museum at the Fashion Institute of Technology. “There was also more acceptance of the body. The fitness crazy in the ’80s encouraged women to feel better about their bodies and show them off more.”
Many department stores balked at the idea of selling backless underwear, so Hanky Panky turned to boutiques. Over the next two decades or so, it steadily built a following but remained mostly under the radar. “They started out small and were always very focused on quality, which they still are,” Ms. Hill said.
“We never scaled up to a certain volume because we were having too much fun,” Ms. Epstein said. “We didn’t want to create this massive organization that would have gotten out of hand and would have forced us at that time, in order to compete, to go offshore.”
But in 2004 The Wall Street Journal published a front-page story about the company (the show “Sex and the City,” among other cultural factors, had popularized Brazilian bikini waxes), and business exploded.
“That was the most difficult day of our business life,” Ms. Epstein said. “We had no sales department. We had no P.R. agency.”
“You didn’t have a cellphone,” Ms. Orzeck said. “We didn’t even have an e-commerce website. We had 55 employees. This was a time when I would maybe get five emails in a day, and there were hundreds.”
The department stores returned, no longer scandalized by the idea of a thong or the company’s name. The company began to slowly and carefully increase production, meting out limited inventory to stores. “It was a balancing act,” Ms. Epstein said. “We had to satisfy everybody in some way.”
Ms. Orzeck said, “It was much harder than starting the company. Demand, a reputation to uphold, expectations. It was a gorgeous nightmare.”
Eventually, the company expanded to an additional floor of the building, hiring more than 100 new employees. “We have always grown, and we have lived through five recessions,” Ms. Orzeck said. In fact, the economic downturn in 2008 is what allowed them the breathing room to enter e-commerce, late in the game.
“By 2009 every brand had a website, except for us,” Ms. Orzeck said. “So the time was right. We had to convince the boutiques that they wouldn’t lose business.”
In recent years, Ms. Epstein and Ms. Orzeck have scaled back their involvement in the company. “I’m not in the weeds the way I was the first 25 years,” Ms. Orzeck said. Why shouldn’t they take it a little bit easier after turning the thong into a classic cut, one that remains a staple in many drawers (despite what the millennials may have you believe)?
But despite handing over some of their ownership, they have no plans to leave. “Why would I retire?” Ms. Orzeck said. “This is still our baby.”