Top Executive Pumps Up Her Sport Apparel Manufacturer : Clothing: After leading Warnaco back to fighting trim, Linda Wachner’s now spearheading an aggressive expansion of Van Nuys-based Authentic Fitness.

Linda Wachner, the only chief executive of a Fortune 500 company who asks visitors if her lipstick is on straight, was recently dubbed by Fortune magazine “America’s most successful businesswoman.”

Wachner, 47, is credited with whipping into shape the big New York apparel company she heads, Warnaco Group Inc., best known for its Christian Dior men’s shirts and Warner’s and Olga bras and panties. Warnaco was fat and sleepy when Wachner assumed control in a hostile takeover in 1986. Wachner cut debt, jettisoned unprofitable product lines and took the company public. Now profitable, Warnaco’s stock has gained 65% in value since the October, 1991, initial public offering.

Now Wachner is turning her attention to her other company: Authentic Fitness, the Van Nuys maker of Speedo swimsuits--worn by most Olympic swimmers--and White Stag, Edelweiss, Mountain Goat and Skiing Passport ski wear.

Authentic Fitness was formerly a division of Warnaco, and in 1990 was spun off to Wachner and other investors for $85 million--prompting critics to accuse her of self-dealing. Taking a page out of the Warnaco blueprint, in June Authentic Fitness went public at $14 a share, netting $39 million to help repay debt.

So far, Authentic Fitness looks like another Wachner success.

In its second quarter that ended Jan. 3, Authentic Fitness’ earnings more than doubled from a year earlier, to $2.75 million, while its revenue rose 26% to $29 million. The gain was attributed to a rebound in ski wear sales, and increased sales of swim trunks and other apparel. Its stock closed Monday at $20 a share, and Wachner’s 10% stake is worth about $18 million.

But Wachner is playing a risky game with Authentic Fitness--namely, that her aggressive expansion strategy won’t backfire.

Authentic Fitness’ traditional business was limited to selling its famous Speedo swimsuits and White Stag ski wear to athletes and hard-core sports enthusiasts.

Now Wachner is aiming for a broader audience by propelling Authentic Fitness into a wider array of fitness apparel, including aerobic and volleyball outfits, T-shirts, non-competition swimwear and lower-priced ski jackets. She has added accessories, from swim goggles to workout bags, and is riding the latest pool exercise fad with a new aquatic aerobic step. Most of these new products are marketed under the Speedo-Authentic Fitness brand name.

Wachner said her plan is aimed at “the lady who started to wear aerobic sneakers and who changed them into a way of life. That’s the woman who wants to wear fitness wear. And the man too.”

The company is also moving beyond selling its clothing only to sporting goods stores and swim team dealers. About 1,000 Wal-Mart stores will carry Authentic Fitness lines this year, after being introduced in about 250 stores last year. Speedo suits are now available through the Lands’ End catalogue and the new fitness wear is being sold by Ladies’ Footlocker.

Authentic Fitness also opened its first retail outlet in the Beverly Center, which carries most of the new fitness clothes, including men’s swim trunks, warm-up outfits and leotards. The brightly colored shop features a ceiling designed like a swimming pool with mannequin “divers” suspended in the air. The company plans four more stores in the next few months, which Wachner says will be laboratories for testing new products.

But Wachner’s gambit runs the danger of straying too far afield from Authentic Fitness’ core business. “It’s a classic business question,” said Steve Furniss, president of Tyr Sports Inc., a distant No. 2 iS. competitive swimwear sales behind Authentic Fitness.

“They could become a major player in fitness and it could become a brilliant business decision. Or they could throw in the towel in a few years and retrench.”

To be sure, Authentic Fitness has plenty of strengths--not the least of which is Wachner.

“Linda Wachner wins almost every battle she fights,” said analyst Laurence Leeds Jr. at Buckingham Research. “I think she’ll win this one.”

Wachner, whose credo is “Do it now,” calls her approach “very hands-on, very focused and in the style of a turnaround. We do everything on a weekly basis because if you wait for monthly reviews you have to wait three months on the back end to fix it.”

Another plus for Authentic Fitness is the publicity generated every four years by the summer Olympics. Diving champion Greg Louganis is a company spokesman, as are swimmers Janet Evans and Summer Sanders and volleyball star Karch Kiraly. Even former presidential candidate Paul Tsongas unintentionally plugged the company when he posed for a political ad in a Speedo swimsuit.

As for the expansion, Wachner contends that she is treading cautiously and adding products that make sense--like a goggle with a built-in strobe to help swimmers pace their strokes.

The Authentic Fitness apparel lines are in hip shades of black, gray, aqua and fuchsia, and matching pieces fit into outfits. Prices for cotton and Lycra fitness pieces range from $20 to $40--in contrast with up to about $225 for the company’s most expensive ski jackets.

Before Wachner shook things up, said Christopher Staff, Authentic Fitness president and chief operating officer, the company’s image was “Greg Louganis in a bikini.” Now, “new products and line extensions are really behind the success of this company.”

Joan Charles, women’s sportswear buyer at Oshman’s Sporting Goods, said the new fitness lines tested well in an Indianapolis store and the retailer is expanding them to 10 stores. “They have the fit down from the swimwear line and customers recognize it’s good quality.”

Analyst Alice B. Longley at Donaldson, Lufkin & Jenrette predicts that Authentic Fitness’ fiscal 1993 profit will total $9.6 million, and revenues will be up 23% to $125 million. A year before, the company lost $4.4 million on $101.5 million in revenue, due largely to a slumping ski wear market and the costs of the initial public offering.

If Wachner’s Authentic Fitness bet proves right, it would be another feather in the cap of one of America’s wealthiest working women.

Wachner was a buyer at Macy’s in New York before moving to marketing at Warnaco in the 1970s. She left to run Max Factor’s U. S. cosmetic business.

After a failed attempt to buy Max Factor, Wachner met Andrew Galef, a Los Angeles investor whose other interests include MagneTek Inc. After a fierce bidding war, the pair acquired Warnaco for $550 million, mostly financed with junk bonds.

Though Wachner raised eyebrows with the Authentic Fitness spinoff, she insists that there was no conflict of interest. When a deal to sell the business to a Canadian investment group fell through, she said, Warnaco’s banker, GE Capital, offered to finance a Wachner-led buyout to help pay down Warnaco debt.

Wachner teamed with Pentland Group, the British concern that backed Reebok in its early days, and the deal was approved by Warnaco bondholders.

Pentland also owns the Speedo trademark and licenses it to Authentic Fitness in North America. Pentland now owns 26% of Authentic Fitness, and Stephen Rubin, the Pentland chairman whose acquaintance with Wachner dates to her days on Reebok’s board, calls Wachner “the best businessman I know.”

Wachner has also been criticized for paying herself well. In addition to salary and bonus of $3 million a year at Warnaco, Wachner has pulled in nearly $5 million in compensation so far from Authentic Fitness. Wachner says only: “I’m worth it. Full stop.”

But the criticism doesn’t end there. Wachner is reputed to be a demanding and sometimes abrasive boss.

“It used to bother me that people said ‘She’s tough,’ ” Wachner said. “Then I decided that as I grew older it’s not right to apologize for being effective.”

Kathy Van Ness, general manager of Jantzen Inc. and a former White Stag president, said getting along with Wachner “was very simple. If you did your job and got your numbers in, you were fine.”

But with only 10% of Wachner’s time given to Authentic Fitness, can she keep up her hands-on, full-throttle style of management?

Wachner contends that she can, and Beth Ravit, who left Herman’s Sporting Goods--Authentic Fitness’ biggest customer--to become president of Authentic Fitness’ retail division, agrees.

Ravit recalled working late one recent Friday night with Wachner in Los Angeles. On Saturday they drove to South Coast Plaza to scope out a site for the next Authentic Fitness store. Back in Los Angeles, they reviewed fall clothes. Wachner went to a dinner meeting, then sat with Ravit on a flight to New York.

“That’s normal,” Ravit said.

Wachner focuses on strategy and leaves day-to-day decisions to Staff and Ravit. But it was Wachner who decided to relocate Authentic Fitness from Portland, Ore., in 1987 to attract top-notch designers.

And she keeps an eye on details too--during a recent interview, she flipped through a sales brochure and pointed to various outfits, saying, “I wear this, I don’t wear that . . . .”

The company now has 100 employees in Van Nuys who design, make samples and market products. Another 300 are at distribution facilities in Nevada and Canada.

Most manufacturing is shopped out in the United States, except for ski wear, which is made in the Far East.

Wachner said her confidence in the new lines stems from extensive market research and feedback from the Authentic Fitness store.

But she reveals another reason for believing: “Since we came out with Authentic Fitness as a line, I’ve lost 14 pounds.”