California Apparel News

Over the years, Lunada Bay has grown from a one-brand house to a company juggling eight labels.

Inside Susan Crank’s office, giant bushy bamboo plants the size of small trees accent the corners of the boxy space while a low-slung green silk couch opposite her desk projects a rather Zen feeling into the room.

Dashes of green and beige on the walls add to the cool, calm environment.

Outside theoffice, however, it’s a different story. Designers are surveying row upon row of swimsuits dangling on the wall, tweaking a bikini top here, adjusting a swimsuit bottom there.

In the next room, sewing machines hum as more than 20 seamstresses whip up sample suits for designers to place on fit models. In the warehouse area, cardboard boxes of swimsuits are stacked to the ceiling. Splashes of color are everywhere.

While many swimsuit companies are treading water in this precarious economic environment, life at the Lunada Bay Corp., a decades-old swimwear company in Anaheim, Calif., is racing ahead.

Within the last year, the company has increased its staff by 12 percent and added two new labels to its stable of brands.

Starting with Cruise ’09, the company is the official design house for Anne Cole and Catalina, two well-known labels with a long California history.

“This is a major undertaking,” said Crank, who has headed Lunada Bay as its president and chief executive since 1987.

The Anne Cole and Catalina labels were owned by the Warnaco Group until last year, when it sold those two brands, as well as its Cole of California label, to the In Mocean Group in New York for $26 million. Warnaco still makes Speedo swimsuits.

In Mocean, which concentrates on manufacturing swimwear labels overseas, turned to Lunada Bay to design two of its three new acquisitions. (Cole of California will sit on the sidelines for a while.)

Pairing the two companies seemed natural. For seven years, In Mocean and Lunada Bay have been working together to produce the Mossimo swimwear line for big-box retailer Target Corp. Lunada Bay comes up with the Mossimo designs, and In Mocean manufactures them. This is exactly how it will work with Anne Cole and Catalina.

“We are creating a hybrid with the Lunada Bay and In Mocean business model that is unique. To be able to take that success and move it forward with well-known names and powerhouse brands is just, aaah,” said Crank, lifting her arms for emphasis.California cool

The names Anne Cole, Cole of California and Catalina are about as old as the California swimwear industry.

Anne Cole’s father, Fred, a former silent-film star, founded Cole of California in 1925, when women were wearing suits practically down to their knees.

Anne, now in her 80s, remembers that even in the 1950s no self-respecting department store would display a swimsuit on a mannequin. She recalls the brouhaha in 1964 when Cole’s Scandal Suit (a bikini joined by mesh material that looks modest by today’s standards) was written about on the front pages of The Wall Street Journal.

Catalina swimwear was also founded in California in the 1920s. Forty years later, it became a sister company of Cole of California.

Catalina’s fame grew in the 1940s after the company sponsored the Miss America beauty pageant. Contestants wore off-the-rack Catalina suits with the brand’s fish logo.

For years, Anne Cole worked for her father’s company. Then, in 1982, the swimwear scion started her own line, called the Anne Cole Collection. But 11 years later, Cole of California and the Anne Cole Collection declared Chapter 11 bankruptcy and were acquired by Warnaco. Anne Cole moved with her label, working with Warnaco until the three swimwear brands were recently sold.

Today Anne Cole is still a part of her namesake brand. While designer Rebecca Virtue is heading up the Anne Cole Collection design team, the octogenarian has been down to Lunada Bay’s headquarters twice to discuss the color schemes and silhouettes for the Cruise ’09 collection, which debuts this July at SwimShow 2009 in Miami.

“Anne loves color, so we are trying to integrate color in the collection, and she likes plunging necklines, so we have a few of those,” said Virtue, who has worked at Lunada Bay for 18 years since graduating from the Otis College of Art + Design in Los Angeles.

A vivid color palette is part of the Anne Cole Collection as well as tribal prints and fabrics with shine. The label—which will be sold to specialty stores, swimwear retailers and better department stores—is geared toward a customer whose median age is 40, but it can be worn by women between the ages of 20 and 60. It’s a misses label with a contemporary eye. Retail price points will range from $44 for separates to $120 for a one-piece. “I’m coming of that age where women have a hard time finding a suit,” said Virtue, who is concentrating on flattering silhouettes and supportive fabrics. “I’ve jumped into designing it wholeheartedly.”

For Catalina, which will be sold exclusively to Wal-Mart Stores Inc., designer Kozue Nohai is heading up the creative team to develop the Cruise ’09 line. Nohai has been meeting with Wal-Mart officials to work on concepts and trends they feel will make the brand a top seller in their stores.Brand building

The recent addition of these two labels is just a fraction of what Lunada Bay is working on these days.

For nearly two decades, the company has designed the Mossimo swimwear line now sold in Target stores throughout the nation.

At one time, the privately owned Mossimo label accounted for the lion’s share—some say as much as 75 percent—of Lunada Bay’s revenues. The private company does not reveal sales figures.

But in 2000, designer Mossimo Giannulli’s clothing company fell on financial hard times. To save the company from bankruptcy, Giannulli licensed his label to Target Corp., leaving Lunada Bay in the lurch.

While Lunada Bay managed to remain the design arm for the Mossimo label, the suits were selling at Target for a much lower price than before. Lunada Bay’s profit margins tumbled.

Crank, a savvy businesswoman who had been the head of sales at Ocean Pacific Beachwear before moving over to Lunada Bay, quickly got busy looking for other revenue streams. She turned to in-house designer Rebecca Virtue to create Lunada’s own brand. They came up with Becca, a contemporary line for the sophisticated woman who wants a well-made suit that is fashionable yet stylish.

For Cruise ’09, Virtue is incorporating bright hues of aqua, fuchsia, kelly green and orange into the Becca line as well as plums and browns. Retail prices range from $48 to $130. Accessories such as matching hats, bags, coverups and tops are part of the collection to draw in customers during cooler weather.

As if overseeing two labels weren’t enough, Virtue, the mother of 7-year-old twins, also designs the Bisou Bisou swimwear label for JCPenney, meeting with Michele Bohbot, one of the label’s principals, to discuss the line’s direction.License to grow

While the Becca and Mossimo labels have given the swimwear company plenty to do, Lunada Bay also holds the license to design and manufacture swimwear for Lucky Brand Jeans, a Liz Claiborne subsidiary based in Los Angeles, and for Betsey Johnson, the well-known designer brand based in New York.

Tu Ngo is the designer behind Lucky Brand swimwear. The line is hip, with tie-dyed designs and paint-splattered fabrics that evoke the 1970s. For Cruise ’09, some hand-painted tattoo art will be added.

The Betsey Johnson line, designed by Julie Ann Silverman, always takes on the vibe of Johnson’s own collection and her signature prints. For Cruise ’09, there are exotic leopard prints with ruffles, bright flowery fabrics and polka dots. Retail prices range from $60 to $200.

Silverman, also a graduate of Otis, meets twice a year with the venerable designer in her New York headquarters.

The first meeting is usually in September during New York Fashion Week, when Silverman and Johnson sit down and talk about Johnson’s collection. Silverman then goes through the flamboyant designer’s archives, which house her collections, for more ideas. “It is like going through the best vintage store ever,” Silverman said.

In June, Silverman returns for Johnson to bless the swimwear line.

Betsey Johnson is quite pleased with the partnership. “They really get me and know how to show that through my swimwear line,” the designer said in an e-mail. Johnson said she loves the energy and enthusiasm the company evokes.

The Mossimo line used to be designed by Rebecca Virtue. But since the end of 2005, Artemis Kefallinos, who has been with Lunada Bay for three years, has taken over the creative task. She aims to appeal to a 25-year-old Target customer on a budget but knows that anyone in their teens to their mid-50s is drawn to the line. Rich colors of rust, red and aqua are the Mossimo line’s hallmarks for Cruise ’09.

One of Kefallinos’ challenges is to keep price points within reason; separates retail for $17.99 to $19.99.

The young designer, who counts Greek as her first language, has been taking jewelry classes lately. So she is experimenting with her own handmade trims to give the line some extra flash.

In addition to all this swimwear activity, Lunada Bay is working with Iconix Brand Group, which bought the Ocean Pacific brand in 2006 from Warnaco for $54 million, on a special project to create an Op Swimwear line exclusively for Wal-Mart. Iconix also bought the Mossimo label in 2006 for $119 million. Forecast for the future

The activity generated by eight labels under one roof is making Crank a happy woman. When she took over as head of the company 21 years ago, there were 32 employees making only Op Beachwear.

Now, the swimwear venture has 92 employees, isn’t dependent on just one label and sells to 1,500 specialty stores as well as to major department stores in the country.

“There is such a synergy within these walls,” said the pint-size woman, who practices what she sells. She has 30 swimsuits in her closet at home.

Crank and her team get high marks for their business acumen. “They are innovative. They take each division that they do and put their heart and soul into it,” said Diane Biggs, owner of Diane’s Beachwear, which has 17 swimwear stores in Southern California. “They are incredible designers. They treat every season like it has to be the best—and it is, always.”

Sheila Arnold, now president of Everything But Water, first met Crank in 1977, when Arnold was working at Macy’s as a merchandise manager. Everything But Water, with 71 stores throughout the country, carries the Becca, Lucky Brand and Betsey Johnson labels. “We are able to get a range of customers to come in because of those brands,” Arnold said.

With so many years of swimwear experience, Crank has seen the swimwear industry change from a place dominated by four or five manufacturers that made one brand each to a scenario of big and small swimwear companies making licensed and designer labels as well as their own lines.

Fashion, weather, the economy and the timing of spring break, however, are still the driving forces behind swimwear. “If it is 58 degrees, you are not going to the beach. You are going to put on a sweat shirt and complain,” said Crank, who spends at least one hour each weekend watching the Weather Channel to predict how sales may go.

Recently, orders have been flooding in from New York and other East Coast cities after temperatures climbed into the 90s. “Hot weather is always good news,” Crank said. “I love watchin’ people sweat.”