Speedo Dives Into an Ocean of Athletic Wear : Retailing: Apparel whiz Linda Wachner aims for the loyalty and money of women whose aerobic shoes changed their lives.

Having whipped fat and sleepy Warnaco Group Inc. into shape, Linda Wachner is now turning her attention to her other company: Authentic Fitness, the Van Nuys maker of Speedo swimsuits and other athletic wear.

Authentic Fitness was formerly a division of Warnaco, the big New York apparel company Wachner heads. But it was spun off to Wachner and other investors for $85 million in 1990. Taking a page out of the Warnaco blueprint, Authentic Fitness went public last June at $14 a share, netting $39 million to help repay debt.

Warnaco, best known for its Christian Dior men’s shirts and Warner’s and Olga women’s lingerie, was in sad shape when Wachner assumed control in a hostile takeover in 1986. She 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 offering.

So far, Authentic Fitness also looks like a success for Wachner, Warnaco’s president and chief executive,whom Fortune magazine recently dubbed “America’s most successful businesswoman.”

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. Its stock closed Friday at $18.875, down 50 cents, and Wachner’s 10% stake is worth about $16.6 million.

But Wachner is playing a risky game with Authentic Fitness--namely that her aggressive expansion strategy could 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 and lower-priced ski jackets. She has also added accessories, from swim goggles to workout bags.

Wachner said her plan is aimed at “the lady who started to wear aerobic sneakers and who changed them into a way of life.”

Authentic Fitness lines are currently in Wal-Mart, Lands’ End catalogues and Lady Foot Locker, and the firm has also opened its first retail outlet in the Beverly Center. Planning is underway for 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 in U.S. 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 is swimmer Janet Evans and volleyball star Karch Kiraly.

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.”

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. After a fierce bidding war, the pair acquired Warnaco for $550 million, mostly financed with junk bonds.

Though Wachner was accused of self-dealing with the Authentic Fitness spinoff, she insists 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.”