NEW YORK — It is tempting to imagine the purveyors of the laid-back Caribbean Joe brand as lounging around on an island somewhere drinking from coconuts.

Well, Ken Sitomer, a principal at Apparel Holding Group, which owns the brand, and his team, are based on an island — Manhattan — but they haven’t spent much of the past year kicking back.

The casual sportswear line grew quickly in 2003 and is set to do the same this year as a few hard shops within department stores in key markets are added and even some resort-area stores are tested. AHG also has readied the way for acquisitions, as it makes its bid to grow annual sales to the billion-dollar mark.

The firm still has a way to go, though, even at its current growth rate.

Caribbean Joe’s women’s offering nearly doubled its wholesale sales to $110 million last year, from $60 million in 2002, its first year out. This year, the firm is looking for the business to race ahead to a volume of up to $180 million. The men’s side of the Caribbean business is set to grow, as well, producing sales of about $50 million this year. AHG also markets the Periscope junior brand and has a private label business.

In all, AHG is looking for 2004 sales to grow to a range of $325 million to $360 million from $215 million last year.

“Even though we are a moderate company, we don’t want to do just basics,” said Sitomer, who is always pushing to differentiate the line by being ahead of the fashion curve, but not too far forward.

Caribbean Joe features classic looks with island themes and has evolved into a year-round sportswear line. The emphasis right now, as with much of the industry, is on vivid colors.

The line is sold in 2,200 to 2,300 department store soft shops across the country, and is expanding its model to include a few hard shops at stores in key markets this spring, such as the Macy’s Herald Square flagship.

Still, Sitomer maintained, “Our soft shops are as effective as any hard shop I’ve ever seen.”Executive vice president W. Ross McConnell Jr. said the hard shops would have “a British West Indies look with palm trees, darker woods, our own racks, signs that are made of quality materials,” as well as matching walls and floors and novelty touches like antique suitcases.

While plans are still to be ironed out, the firm hopes to display at least representatives from each of the Caribbean Joe licensed lines.

There are currently nine licenses, including women’s and men’s shoes and swimwear; women’s accessories and children’s, and four more, including home goods, in the works. AHG also is considering taking on a license for a major junior brand.

Additionally, the firm is flirting with a limited rollout of its own stores, just three for now, in casino and resort areas.

“We don’t want to be competitors with our customers,” cautioned Sitomer.

AHG is in talks to form a joint venture with a group that has rolled out stores for other brands.

Much of Caribbean Joe’s growth in 2003 came from the launch of special sizes and dresses last spring.

“It’s been, quite frankly, a whirlwind experience for us,” said McConnell. “The plus sizes have done extremely well across the country and the petites have been monumental.”

Plus sizes are growing to represent 30 percent of the business, while the dress business racked in $5 million to $7 million in sales last year and is expected to grow to $10 million in 2004.

Organic growth has been the order of the day of late at AHG, but it is not the only consideration. The company also is looking to expand via acquisition.

Jonathan Spier, chief executive officer and a principal of the firm, said the acquisitions could help the company register sales volume of $800 million to $1 billion in the next five years.

“We’ve developed a very strong infrastructure here,” said Spier, noting the company could digest acquisitions in the $20 million to $50 million range.

The emphasis would be on deals in the moderate sportswear field that have the potential to grow to $50 million to $100 million.

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