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Sea of Opportunity

Swim makers rely on good weather, strong design and name recognition to boost sales.

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Swimsuit makers expect healthy sales this year, despite a range of potential pitfalls. Retail consolidation, unrelenting seasonality, exacting fashion trends, tough competition and licensing moves all pose potential hazards to swim companies, while quality, trend-driven merchandise and smart business plans serve as the remedies.

Many vendors exhibiting at the ISAM swimwear show at WWDMAGIC have experienced recent growth and are confident it will continue in the near term. They emphasized that business remains largely dependent on one crucial factor: the sun. With the summer sun shining, one-pieces, bikinis and cover-ups have been flying off the shelves at department stores and specialty outlets alike. Reorders are piling up.

“The fact that we are having such a hot summer has really helped my sales a lot,” said Amber DeLecce, vice president at Vix Swimwear, based in San Diego. “I can’t keep in stock what

everybody wants.” She forecasts that Vix’s business will climb 15 percent over last year.

The solid summer was a welcome turnaround from a slow spring, when rain and general gloominess in many parts of the country dampened sales. Customers who held off from spring break purchases have returned to stores in force. Across the U.S., swimwear sales reached nearly $2.9 billion for the year ended in May, according to the latest data available from NPD Group, an

industry research firm. That’s up 16 percent from $2.5 billion the prior year, a marked improvement from nearly flat sales the preceding period.

But even steamy weather cannot sell ugly swimsuits. Swimwear companies have been keeping a closer watch on fashion, a necessity as consumers pony up for suits that are stylish as well as functional. Fashionable swimwear for women in their 20s, 30s and older, which had lagged behind its junior counterpart, is on the upswing.

“Three or four years ago, juniors was hot as a pistol and missy-modern was not doing as well. Today, it is flipped,” said Howard Greller, president of the Blue Water Design Group, a

division of Gardena, Calif.-based Apparel Ventures Inc. At the July SwimShow in Miami, the company’s new Trina Turk Swim & Spa suits received an enthusiastic reception, and Greller estimates he will sell twice as many as originally planned.

This story first appeared in the August 28, 2006 issue of WWD.  Subscribe Today.

The relative strength of contemporary and misses’ swimwear could be a

byproduct of the premium denim wave. Greller theorizes that cash-strapped teens, now shelling out $100-plus for jeans, have to choose inexpensive swimsuits or skip them all together to keep within their budgets. On the other hand, contemporary customers can stretch their wallets to cover both pricy jeans and fashionable suits.

“I had never had jeans competing with swimwear. Never,” said Greller. “That makes it a creative challenge. We have to upgrade our designing for girls to say, ‘I could buy a cheaper one, but I have got to have that one.’”

Fashion has also come around to contemporary swimwear’s direction, according to Lisa Rovan, executive vice president of 25-year-old Karla Colletto Swimwear Inc. in Vienna, Va. Unlike when European brands were the rage a few years back, she said customers are currently shying away from the skimpiest suits.

“For someone that doesn’t have a perfect figure, they are not as forgiving. They like the idea of something that fits well and has some support and coverage,” Rovan said, estimating that interest in comparatively conservative one-pieces pushed Karla Colletto’s sales up 30 percent last year over the year before.

Emerging brands have rushed to fill the demand for swimsuits that take their cues from sportswear. It’s the reason Red Carter, head designer and owner of Miami-based swimwear company Red Carter LLC, decided to start his business. Carter, who honed his swimwear skills at Warnaco Group Inc., is now in his fourth solo season.

“[The big companies] weren’t fast enough. In swimwear, everyone goes for one shot. People do not pay attention to current market trends very well,” he said. “I was trying to be as savvy as possible.”

Several upstart companies, including Laguna Beach, Calif.-based Pearl Swimwear and Vancouver, Canada-based CeaSwim Swimwear Inc., are producing suits inspired by classic, vintage styles. Heather Fish, an intellectual

property lawyer who started Pearl Swimwear seven months ago, said one of her muses is Fifties swimwear designer Rosemarie Reid. “There has been a buzz going around about glamour coming back in swimwear. My whole

collection is that,” she said.

New brands can capitalize on the latest trends — vintage or otherwise — and create stylistic niches for themselves. Specialty stores often give them a chance, with department stores following up if a company demonstrates a steady track record of sales and deliveries.

Melisa Belinger, assistant merchandise director at Everything But Water Inc., an Orlando-based 34-store swimwear chain, said in the past few years, the company has tested Brazilian brands to positive results. “There has been a large increase in Brazilian designers and, definitely, we have increased our business in that area,” she said.

Specialty chains and department stores have seen a desire for versatile pieces, such as cover-ups that can be worn both to beaches and to restaurants. Perhaps influenced by premium denim’s day and night uses, companies have been

churning out ancillary items with a fashionable edge.

Jyoti Butani, owner of beach wrap vendor Store Style Inc. in Matawan, N.J., said she has added asymmetric sarong looks and augmented her repertoire of skirts and tops. “Definitely more and more people are becoming aware of getting into this market,” Butani said. She said her Indian-made goods stand out because “there is a market for uniqueness.”

Specialty chains like Everything But Water and department stores have had to sift through a flood of new offerings from companies big and small. The July SwimShow, for example, featured more than 350 exhibitors with nearly 2,000 lines. Despite the proliferation of small swimwear companies, veterans of the industry insist new entrants do not threaten them.

Greller said small companies simply do not have the cash for the overhead that is required to become a big swimwear player.

Vix Swimwear might be an exception. DeLecce said the eight-year-old company has taken risks to expand, including stocking tens of thousands of units. Other small swimwear companies are comfortable staying small.

Cea Adams, president of CeaSwim, said her company will notch $300,000 in

revenues this year, and she hopes to double that amount next year. “We would like to grow quickly, but not insanely,” she said. “We don’t want to ever become a mass producer available in every store, because we are designer swimwear.”

The retail sector squeeze, at times hyperbolically called the death knell of the swimwear industry, makes it all the more difficult for new brands to succeed. Even established companies are forced to perform better at their existing doors. To do so, they have trimmed the fat and stuck with proven sellers.

Strong licenses appeal to retailers for their critical name recognition. There was a feeding frenzy over Beach Patrol Inc.’s licenses when the Carson, Calif., company went under this year. New York-based A.H. Schreiber Co. grabbed Beach Patrol’s Esprit swimwear license; Cypress, Calif.-based Manhattan Beachwear LLC picked up Split, and Jag was secured by Perry Ellis International Inc., which also brought in-house its namesake swimwear, formerly produced by Beach Patrol.

Avram Schreiber, a principal at A.H. Schreiber, which he estimated is three times as large as it was eight years ago, believes other companies could succumb to the pressures in the swimwear industry. “Ultimately, if you are not in the big eight or nine accounts, you won’t be around,” he said.

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