By  on December 29, 2004

ANAHEIM, Calif. — Southern California swimwear maker Lunada Bay is approaching its 25th anniversary in June, and for the past 18 years has been headed by president and chief executive officer Susan Crank. Before joining Lunada Bay, Crank, 55, was sales chief for Ocean Pacific, which then licensed OP Beachwear to the company. Lunada Bay’s roster includes the in-house contemporary brand Becca, and licenses for Hurley, Lucky Brand Dungarees, David and Goliath and Mossimo for Target (which, unlike its other brands, is produced and shipped by sub-licensors). Crank is famously tight-lipped about earnings of the privately held, 80-person company, though industry experts estimate its annual volume at $35 million to $50 million. From her Zen-themed pale green office in Anaheim, Crank spoke with WWD on topics ranging from expansion to merger mania and the future of the California swim industry.WWD: What’s new for the New Year?Susan Crank: We are now thinking from a global perspective. We’ve been really careful, especially with the Becca brand, about where to expand business. We have some distribution in France, the U.K., Japan, Canada, Mexico and South America, but these are individual boutiques that have approached us. Now we are ready to make a big splash. I just met with stores in Australia, which is a great market for us. WWD: How does the industry differ from when you became president in 1987?S.C.: In the product category there were very few players in those days. Licensing was a new concept and this company was among the first with OP Beachwear. WWD: What is the key to longevity? S.C.: You’re always stepping out and taking a risk in the design perspective. But today you’ve also got to be a politician and get directly involved in legislation that affects the business, and be a good negotiator. You’ve also got to be an attorney to protect your brand on a worldwide basis, an MBA to make sure you are fiscally sound, a mom to nurture all the people in your company and an entrepreneur. It’s ever-changing and just when you think you’ve got your groove there are new rules. WWD: If the company has been performing well, why don’t you reveal numbers?S.C.: There are some advantages to being a privately held company. It’s not for us, it’s for the big corporations, the people who are doing 10-year plans. We’re not big and we’re not tiny. Yes, we have been able to parlay some volume opportunities but we remain small in the sheer number of people who keep us entrepreneurial. The only number I will give is my age, 55.WWD: How has the consumer changed?S.C.: I think women no longer in their 20s are more fit and interested in fashion than the generation before. They are also buying more swimsuits. In 1990, you shipped in a single group and it ran the whole year. Now the consumer is moving so fast you have to bring in new product each market.WWD: How have retailers changed?S.C.: They need to differentiate themselves with new product. We are going to be offering exclusive groups that are made just for them. It’s an opportunity for us to cater to their consumer with some really unique items. That plays into our strength in executing small but precious little runs. We’re not only about ‘How may thousands can there be?’ It’s also about finding that perfect item, even if there are only 100.WWD: Are you looking to add anything to your portfolio? S.C.: There are new places to explore from a design perspective and our distribution that can still have a tremendous upside for business. The designer area is an opportunity in terms of licensing or creating another in-house brand with the Rebecca V. name. Now we have access to even more fabrics and are ready to venture into that area. WWD: What do you think of all the mega-mergers in the industry?S.C.: That’s part of business today. We are watching those partners join forces from retail, manufacturing and textile perspectives. This company is extremely entrepreneurial, and for that reason we have found it best to be on our own to take the kind of risks we want to take and to make decisions that we know for the swimwear segment are best, but that wouldn’t necessarily be in a business plan of a sportswear-minded management group. WWD: With so many companies taking operations offshore, what do you see as the biggest challenge to doing/keeping businesses in California? S.C.: The apparel business is important in this state and we are watching it dwindle. We are one of the few companies who have production in Los Angeles and Orange County. There’s a lot of flexibility that others may have because they are using an import mentality and paying 20 percent of what we pay here to cut and sew our swimsuits locally. Although we’ve got some high hopes with our governor, it is extremely onerous with [Assembly Bill] AB633, which makes me a wage guarantor with anyone whom I do business with. These are people that the state is unable to monitor, so how they would expect me to do it is ridiculous. When you couple that with the paperwork for individual contracts for each and every cut, with higher minimum wage, with workers comp scenario... There’s been a little relief but as far as I’m concerned it’s a Band-Aid on a gunshot wound. WWD: What do you see as a solution?S.C.: The design industry here has always taken a backseat to the East Coast. If the state could find a way to bring attention to the talent here it could change. They also need to make sure that those contractors who are paying their employees to the letter of the law are nurtured. Dwelling on the sweatshop aspect of the business is just embarrassing, while the wonderful things that most companies are doing are completely ignored.WWD: How does the swim industry differ from sportswear? S.C: It’s a small community and there is a lot of mutual respect and camaraderie. Sportswear is fast. A name is hot today and it may not be tomorrow so everyone is new and nipping at each other’s heels. They rarely have the attitude of, ‘As the tide rises, all boats float.’ Instead they think, ‘As the tide rises, who can I push under?’WWD: What inspires you?S.C.: It’s very fun to take a little piece of fabric and see how far you can take it. I live in Laguna Beach and there is nothing more exhilarating than seeing your suits walking on the beach. On our 30th or 40th anniversary you won’t see a diminished excitement about the product. It will be as passionate as it is today.

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