Inside the world of Bra Wars

It seemed like the most genteel of businesses - the lacy world of women's lingerie. In fact, as proved this week with a vicious row between Rod Stewart and lingerie boss Michelle Mone, it is as cutthroat as any other. Rod was furious when Michelle replaced his girlfriend Penny Lancaster with his estranged wife Rachel Hunter as the face and body of her Ultimo brand. Rod called Michelle a 'manipulative cow' but she was unperturbed. Here she tells her side of the story . . .

Had I known the truth about the lingerie industry when I started out seven years ago, I would certainly have thought twice about what I was letting myself in for. The word 'lingerie' conjures up images of beautifully buxom young women, their curves clad in lace, but the reality is that this is a male-dominated industry where dirty tricks, backstabbing and industrial espionage are rife.

Earlier in my career I might have had qualms about ousting Penny, but I've learnt the hard way that business is business. I'm no longer the naive 26-year-old girl who first conceived the idea of a comfortable bra to create natural looking cleavage, and the decision to drop Penny and appoint Rachel - harsh as it may seem - is a sound business move.

Penny was fantastic for us, but we had to move on to someone with international appeal and, like it or not, Rachel is a supermodel with a face recognised worldwide, Penny, on the other hand is barely known outside the UK and then only through her association with Rod.

I wanted Rachel before Penny but I couldn't afford her. Now I can, so we've contracted her to promote Ultimo for two years for a six-figure sum. She's right for Ultimo as we're all about lingerie for 'real' women and Rachel is a real woman (albeit an unfeasibly beautiful one).

She's a single mother of two who works very hard juggling her career with family commitments. When we met I related to her immediately, as I'm a working mum, too.

I can also put paid to rumours about the promotional photos taken of Rachel. It's true they've been airbrushed to even out skin tone. But her proportions are the same and she has definitely not been 'stretched'. I've seen her up close and she really is that leggy and gorgeous.

I was under no illusions about the furore this appointment would cause. I've never had the money to invest in ad campaigns so I've had to learn other ways to promote the business. I thought about it for a long time and backed down on a couple of occasions, but in the end I was under no obligation to Penny - or Rod.

His hypocrisy has been astounding. As far as I'm concerned I've gone out of my way to protect them, yet here he is resorting to personal namecalling. Well, let's not forget Ultimo made Penny a star - so she has nothing to gripe about.

Besides, people change, especially as they get a bigger and bigger name, if you know what I mean. Penny just wasn't right for us anymore. Nothing Rod can say will make me change my mind or back down on this.

Brokering high-profile and lucrative campaigns with supermodels is a world away from where I started out. Back in 1996, I was an unworldly young girl with a dream. One evening I was at a dinner dance and was wearing a well-known make of cleavage-enhancing bra.

It worked, but was so uncomfortable I took it off. That night I told my husband Michael - then a stockbroker but now my business partner - I wanted to design a bra that would fit properly.

I used £15,000 redundancy pay from my previous job heading the Scottish arm of Labatts brewery to fund the research and I worked with a team of scientists to find a substance which would mimic breast tissue.

After three years of trials with water, air and even the stuff that fills bean bags, and rigorous testing involving dropping the bras off buildings and flying them around the world to check they wouldn't burst under pressure, we settled on a silicon gel and the Ultimo gel-filled bra was born.

It was an instant and enormous success. Julia Roberts wore one in the Oscar-winning film Erin Brockovich and it worked so well it sparked rumours that she'd had a breast enlargement. It quickly became one of Britain's biggest selling cleavage-enhancing bras.

I love my work and I've achieved things I'd never dreamt possible. But there is a definite downside.

Throughout the past few years I've worked myself into the ground and my commitment to the business has put a strain on my marriage, caused my health to suffer - I have a suspected ulcer - and my life was put in danger during a car-jacking which I'm convinced was motivated by industrial espionage.

I'm originally from the East End of Glasgow where people are inherently honest and loyal, so you grow up with a propensity to love everyone. However, my time in the business has taught me some harsh lessons and, although I would call myself determined rather than ruthless, I've really had to toughen up and realise that I can't trust people so readily.

I've got to remain strong as I've got three young children to care for and I've staked everything I have on the business. I'm not prepared to just roll over and let my rivals win.

In the early days the hardest thing to cope with was the workload and the hours involved in establishing the business. Michael and I lived and breathed it to such an extent that romance and a home life went out of the window.

We'd go to bed at 12.30am and would still be arguing about work at 3am. I even went into labour with my third child Bethany in a board meeting and was back in the office 48 hours after giving birth. For the first five years before we launched and became successful putting work first nearly destroyed us, but now we've managed to find a balance.

Then came the problems with fierce competition. We launched the Ultimo gel bra in 1999 and it quickly became a favourite with everyone from Julia Roberts to Victoria Beckham. Suddenly other firms saw us as a threat, and things got really nasty.

The first problem came in 2002 when a big name UK brand took umbrage at our success. Annoyed by the design awards we were winning and the publicity we enjoyed, they decided to try to sink us.

They began legal proceedings against us on the grounds that our name was similar to theirs - in fact the two names are nothing like each other - and took out an injunction forcing us to remove our products from stores nationwide.

It was a clever move. Industry giants can afford to be locked into costly legal wranglings for months and at that stage we couldn't. They thought the costly legal battle would send us under.

They thought we'd be off the shop floor for at least three months while we created new packaging, but to their surprise within a week we had our new packaging delivered to every store in the UK. I even delivered some to stores myself.

When you stand up to bullies they invariably back off and it's the same in business. When the company involved saw the lengths we were prepared to go to to protect our brand, they dropped proceedings. We were safe for the moment, but we'd had a serious wake-up call.

Later that year came the event which nearly sank us completely. After careful research we were due to break into the American market. It was an exciting time - I'd been courted by all the major department stores and the president of Saks had even phoned me to ask for our product.

It seemed we were on the brink of major Stateside success. I was determined to get things right and took pains to choose a good distributor, finally settling on a firm who came highly recommended by the top industry trade magazine.

My trust proved horribly misplaced. The company went bust and the owners ran off with almost £250,000 of our money, leaving us with a warehouse of stock we couldn't shift because it was the previous season's design.

My American dreams were dashed and because of our losses we were forced to refinance the company, using our house as security.

I have since discovered that the distributor had gone bust more than eight times before and that the editor of the magazine was a personal friend of the distributors.

At the time, I thought my world had collapsed. If I hadn't had my family I'd have gone insane.

Even once we'd recouped our losses after a year, the troubles were not over.

Our sales were dropping alarmingly. Research showed this was because people were ripping off our one product - the gel bra - producing cheaper, inferior products using water or baby oil which they were trying to pass off as the same as ours. We didn't have the money to fight back with injunctions, so it took its toll.

We decided to put America on hold, to come out of all the department stores in the UK and instead to concentrate on expanding our portfolio of designs. I turned my attentions to inventing the backless body, an idea which came from having discussions with celebrities including Carol Smillie and Melanie Sykes, who wanted supportive underwear to wear under skimpy dresses. The design was patented worldwide in 2002 at a cost of £100,000 and became a massive best-seller.

Then, shortly after we launched, I had a call from a colleague telling me Marks & Spencer had an identical body in their stores. It was identical in every way: cut, material, everything.

Once again, an industry giant didn't think I had the money, time or energy to fight them off, but this time I decided to begin legal proceedings. When they saw I meant business they settled out of court and removed their copy from the shelves.

If it happens with my latest invention, the miracle body, I'll be doing the same thing. I'll do whatever it takes to keep my company afloat.

As if these dirty tricks weren't bad enough, in February last year I was loading my car outside my office with £30,000 of samples of new designs when a hooded man grabbed me and threatened me with a knife before driving off in my car.

I struggled for as long as I could - the loss of those prototypes could have meant the end of our business - and received bruising and a cracked rib in the process.

The car was found by the police, but the underwear had gone. The police never got to the bottom of it, but industrial espionage was the first thing which crossed my mind. After all, the thief had left a £54,000 BMW but had taken samples of underwear. It was all very suspicious.

Every one of those designs was a one-off so we had to work 24 hours a day for a week to remake the samples. Again we were lucky to survive.

To add insult to injury, it was even reported that I may have staged the hit for publicity sakes to halt falling sales. This was entirely false: my PA witnessed the incident and anyone who'd seen my bruises would have known they were for real.

My experiences have made me very wary. For example, I'm now ridiculously careful about the staff I employ, subjecting job applicants to thorough police checks, but then I can't afford not to be.

It may sound farfetched, but industrial espionage goes on all the time - while I was negotiating with Rachel Hunter I'm sure my phones were being tapped and my email monitored.

Despite everything, I don't regret my decision to start the business. I may have faced obstacles along the way, but overall it has been the most fantastic and rewarding experience. After all, there is never a dull moment in the soap opera world of bra wars.