Speedo Writes Off Millions on Racing Suit
A ruling this summer that banned Speedo’s high-tech LZR Racer suit from swimming competitions has forced the company to write off $3.6 million in inventory.
The loss was revealed Nov. 4 when The Warnaco Group Inc., the New York company that owns the North American and Caribbean license for Speedo, announced the write-off when it filed its report for the third quarter ending Oct. 3.
Warnaco noted the write-off occurred after the Feacute;deacute;ration Internationale de Natation, the international governing body of swimming competitions, banned the use of all types of high-tech suits for competition swim events starting Jan. 1, 2010. Other manufacturers of high-tech performance suits include Tyr Sport Inc. of Huntington Beach, Calif.
The Los Angeles–based swimwear group’s third-quarter net loss was $7.4 million, a 27 percent improvement over the same period last year.
A controversy over the suits started after the 2008 Summer Olympics in Beijing when many world records were broken by swimmers wearing the suits. U.S. swimmer Michael Phelps, who was sponsored by Speedo, was wearing a LZR Racer when he won eight gold medals. Despite the brouhaha over the suit, Phelps in September re-signed a multi-million-dollar contract with Speedo that goes through 2013.
These performance-enhancing suits are made of fabric that can improve speed, buoyancy and endurance, while others also created “air-trapping” effects to artificially enhance speed. The high-tech suits were seeing performance advantages of up to six seconds per 100 meters.
In the new ruling, swimsuit material must be 100 percent permeable by water and air. Suits cannot extend below the knees. For women, suits cannot extend past the shoulders, and for men, suits cannot go above the navel. Suits cannot be any thicker than .08 millimeters.—Deborah Belgum
