DESIGNER SPLASH AT AUTHENTIC
NEW YORK — The designer swimwear operation of Authentic Fitness Inc. notched a significant profit in its first year, according to the company’s recently released 10-K.
The swimwear group’s earnings before interest, depreciation, taxes and amortization (EBIDTA) amounted to $6.1 million on sales of $28.7 million in the year ended July 2.
The group consists mainly of the Cole of California, Anne Cole, Sandcastle and Catalina brands picked up in the October 1993 acquisition of substantially all the assets of Taren Holdings Inc.
It also includes women’s and girls’ swimwear under the Oscar de la Renta label through a license entered into in September 1993.
Linda J. Wachner, chairman and chief executive officer, told WWD that the profit stemmed from massive streamlining efforts undertaken since acquiring Taren.
“We reduced overhead, took 65 people into the business instead of 2,000, focused the lines and cut the number of styles by 60 percent,” she said. Taren, which filed a Chapter 11 bankruptcy petition in August 1993, had shown a “substantial loss” in its year ended July 1993 on sales of $145 million.
Authentic Fitness paid $42.6 million for Taren’s assets. Proceeds from the sale of surplus fixed assets and inventories, cash collected from accounts receivables and proceeds from the sale of Colonia Sportswear came to about $20 million, reducing the cash required for the acquisition to $22 million.
“There will be a return on investment in 18 months of the acquisition, which is sensational,” Wachner said.
Designer swimwear sales should exceed $50 million in the year ended June 1995, she added.
This year will benefit from full participation in the 1995 booking season versus its late start last year, Authentic Fitness said.
At the Speedo division, EBIDTA rose 11.6 percent to $23.3 million, while sales climbed 10 percent to $113.1 million.
By category, sales of Speedo competitive swimwear gained 6.6 percent to $29.1 million; accessories, mainly goggles, climbed 8.6 percent to $28.9 million; men’s swimwear, primarily water shorts and T-shirts, gained 9.7 percent to $24.8 million, and active fitness women’s swimwear gained 9.5 percent to $4.6 million.
Sales in the Speedo Authentic Fitness line, introduced in 1991, jumped 53.4 percent to $8.9 million. This line consists primarily of cotton and Lycra spandex products for women such as leotards, unitards and tights, as well as coordinated sportswear such as fleece and nylon warmups, jackets, shorts and pants under the Speedo Authentic Fitness label.
At the White Stag/Skiwear division, EBITDA rose 13.8 percent to $3.4 million because of higher volume and lower selling, general and administrative expenses. Overall, sales gained 8.3 percent to $32.1 million.
White Stag sales of women’s and men’s outerwear, activewear, swimwear and accessories rose 21 percent to $11.1 million. Speedo Authentic Fitness stores did $4.6 million in sales in the year.
— Financial News Service