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Silver linings in swimsuit industry

Economic clouds may hang over the swim market, but a handful of factors have industry insiders hopeful.

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Special Issue
WWD Swim issue 07/07/2008

Brightly colored swimsuits may be the lipsticks of the swimwear market.

Like with the beauty mainstays, suits splashed with oranges, turquoises and yellows reappear in stores with a vengeance when economic times are tough, 41-year-old Raj Manufacturing LLC detected.

“We have more brights than ever in our [2009] collection,” said Lisa Vogel, co-president of Tustin, Calif.-based Raj, which makes swimwear under the Tommy Hilfiger, Athena, Guess, O’Neill, Luxe and St. John labels. “The last time we saw these bright colors was in the early Nineties, the last time we were in a recession.”

Perhaps swimwear consumers—as well as retailers and vendors—are in need of a little cheering up. While the niche swimwear industry hasn’t fared as poorly as others, sales over the past year have been largely flat and buyers are cautiously approaching the upcoming season.

Research firm The NPD Group reports that total women’s swimwear sales in the U.S. amounted to nearly $2.7 billion from May 2007 to April 2008, climbing roughly 1.2 percent from $2.66 billion in the same period a year before. That increase was substantially off the prior year’s, when sales spiked almost 10 percent from $2.4 billion.

Certainly, the swim picture could be a lot gloomier. Ron Russell, president of L.A. swimwear stalwart AVI Design Group, which handles La Blanca, Sessa, 2Bamboo, Citrus, Lauren by Ralph Lauren and Ralph Lauren Blue Label, said that the swim sector’s small size compared with other parts of the fashion industry limits its exposure to economic swings. The majority of women shell out for a swimsuit fewer than once a year, according to a 2007 survey by NPD.

“We continue as an industry to do well in spite of all the things that take place because it is somewhat recession-proof,” said Russell, who reported that AVI experienced a year-over-year revenue jump of 18 percent. “If we were in a business that we had to sell a woman a swimsuit every year, then we would be affected by recessions.”

The weather probably has more to do with swim’s fortunes than gas prices, interest rates or foreclosure statistics —and it is often mentioned first when swimwear retailers and vendors discuss sales. In most parts of the country, retailers noted that warm temperatures have spurred business this summer.

Mark Sidle, president of Swim ’n Sport, a Miami-based chain with 36 stores, puts the climate-business equation simply. “The hotter it is, the more you can sell,” he said.

Even with the mercury rising, swimwear hasn’t escaped the cold economic winds totally unruffled. While the industry as a whole has been relatively nonplussed, there are areas of concern. The junior market is one such area, especially for manufacturers and shops in the upper tier of the swimwear field.

Contrary to conventional wisdom that teens’ and kids’ shopping tabs don’t decline during downturns because parents splurge on their tots no matter what, several vendors and retailers have noticed that junior spending has taken a dive in swim. “For the last five years, juniors has been a very strong summer business for us, but now we have seen that has fallen,” said Renee Buda, buyer for 18-unit chain California Sunshine, based in Ocean Township, N.J.

The NPD figures show that mass merchandisers and off-price retailers, purveyors of low-cost suits, have seen women’s swimwear year-over-year increase 7.2 percent and 24.7 percent, respectively, perhaps partially due to consumers seeking affordable options. However, specialty stores with pricier goods have had their share of success, with annual sales rocketing 19.6 percent.

Specialty stores credit designer and misses’ swimwear with keeping shoppers buying. “People are looking into designer swimwear more than ever before,” said Melanie Michaud, director of marketing for 17-unit chain Diane’s Beachwear.

Howard Greller, president of Blue Water Design Co., a division of Apparel Ventures Inc. that he said has recorded a 25 percent revenue leap over last year, said designer sales have flourished. “We have seen explosive growth at the designer tier level, which indicates that people are willing to spend at the luxury price level if the suit is right.” Blue Water makes Trina Turk, Rampage and Local Motion swimwear, among other brands.

Nichole Carroll, creator of Tyler Rose Swimwear, a high-end brand available in roughly 50 specialty boutiques, concurs that the premium labels continue to perform strongly because their customers are not extremely price-sensitive. “The girls who buy my stuff are willing to pay that price point,” she said.

Swimwear shoppers’ price sensitivity will be put to the test in the upcoming season. Material expenses, transportation costs and the Euro-dollar discrepancy have been blamed for boosting swimsuit prices. Swim ’n Sport’s Sidle has come across increases as high as 10 percent, but he doesn’t seem too worried. “I don’t believe that the majority of the consumers that are shopping in better stores today are going to not buy because of the 10 percent increase,” he said.

Nonetheless, Sidle and other retailers aren’t proceeding into the 2009 buying season depending upon shoppers shelling out for just any suit. The drive to smartly merchandise the stores is even greater given the economic uncertainties.

“We went into the market last year being very selective in the prints and colors that we wanted to offer to our consumer, and we are not going to settle this year either,” said Sidle. Going into next season, Kassidy Babcock, a buyer for online store Shopbop, said, “I am bringing in a couple of new brands, but we are focusing on the ones that have been strong performers.”

And California Sunshine’s Buda said, “We are definitely going to have a more conservative buy than last season.” Still, she offered some hope to standout vendors. “We are always looking for fresh fashion,” she added.

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