California Apparel News

Speedo swimwear, headquartered in Los Angeles, was a rising star in the secondquarter earnings report that parent company Warnaco Group Inc. posted on Aug. 6.

Speedo, as well as sister swimwear labels Calvin Klein and Lifeguard, saw net sales rise 10.3 percent during the second quarter, ending June 30, to $86.7 million, compared with $78.6 million the same period last year.

The swimwear group’s operating income also increased from $10.7 million in the prior second quarter to $13.7 million this year.

The swim labels made up 15.7 percent of Warnaco’s second-quarter revenues.

Warnaco President and Chief Executive Helen McCluskey tied Speedo’s revenue rise to the Summer Olympics in London, where the swimwear brand was on many athletes’ bodies as they competed.

However, for the six-month period ending June 30, the swimwear group’s performance was more muted. Net revenues were off 1 percent from $178.6 million this year compared with $180.3 million during the same period last year. However, operating income was $28.4 million during the current sixmonth period, compared with $24.7 million last year.

Overall, the New York–based Warnaco Group—which includes intimate apparel and sportswear sold under the Calvin Klein, Olga, Chaps and Warner’s labels—had a less-than stellar second-quarter showing. Revenues fell 4.6 percent to $563.9 million, and profit dropped 79 percent to $9.62 million, or 23 cents a share. Part of that is due to a $12 million impairment charge related to the 2008 sale of Lejaby, an intimateapparel line, to Palmers Textil. Warnaco said a portion of the note issued in the 2008 sale might not be collectible.

For the second quarter, the sportswear group saw a 7.4 percent year-overyear decline in revenues to $265 million. The intimate- apparel group also had slipping revenues that were down 6.3 percent to $212 million.

For all the labels, sales were positive in some areas of the world and challenging in others. “As expected, a positive performance in Asia and Latin America during the quarter offset softness in Europe and the United States. Despite a decline in comparablestore sales, reflecting challenging macroeconomic conditions, our Calvin Klein direct-toconsumer business was up 6 percent in constant currency,” McCluskey said in a statement.

As of June 30, Warnaco’s inventories were down 7 percent to $330.6 million, compared with $355 million on July 2, 2011.

For the rest of the year, Warnaco expects revenue growth to be flat or grow no more than 2 percent over last year. —Deborah Belgum