Suited for Success : Despite aging baby boomers and lackluster market, swimwear maker Authentic Fitness of Van Nuys keeps outlapping rivals.
It’s coming. That dreaded time of year is right around the corner--in April, to be exact.
No, not tax season. Sometime within the next month, this summer’s line of swimsuits will hit the stores. Women of America, prepare for an onslaught of products that promise to lift bust lines, slim hips, flatten tummies and camouflage those not-so-flattering assets--all without having to go under a plastic surgeon’s knife.
That’s not all. Swimsuits are coming in a wider array of colors, fabrics and designs than ever before. Leg holes run from high to low on the hip. Necklines are all over the place. There are metallic prints, netting and sheer, frilly skirts. There are plaid, tie-dyed and even velvet swimsuits.
So how do swimsuit manufacturers figure out what consumers want?
“The first thing is, you don’t guess,” said Linda Wachner, chief executive of Van Nuys-based Authentic Fitness Corp., which counts Speedo, Anne Cole, Oscar de la Renta, Cole of California and Catalina among its brands of swimwear.
“It’s a science,” Wachner declared.
If so, Wachner, 49, is increasingly regarded as a whiz in the swimsuit lab. As swimsuit sales nationally have slipped during the past few years, Wachner has kept Authentic Fitness growing at a fast pace.
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Authentic Fitness is now one of a handful of large swimwear manufacturers clustered behind market leader Jantzen Inc., and is vying to be the Avis Rent A Car of the swimwear business, while the rest of the industry is populated by mostly small companies. But in a few years Authentic Fitness could be “the largest swimwear company in the United States” because of Wachner’s aggressive marketing push, said Laurence C. Leeds Jr., managing director of New York investment firm Buckingham Research Group.
Last year, total U.S. adult swimwear sales were flat at about $1.4 billion, and down 4% from $1.45 billion in 1992, according to NPD Group, a Port Washington, N.Y., market research firm. Alan Millstein, editor and publisher of the Fashion Network Report newsletter in New York, blamed the blase market on aging baby boomers--as people get older they buy fewer swimsuits--as well as skin cancer fears, weather trends, a consolidation among retailers and relentless price discounting starting early in the selling season. “Most women would rather admit their age than admit they bought a swimsuit at full retail price,” Millstein said.
Nonetheless, Authentic Fitness has shown strong growth. Its profit for the six months ended Dec. 31 was $6.52 million, compared with a year-earlier loss of $594,000, while revenues grew 44%, to $93.9 million from $65.4 million.
Wachner expects total company revenues in the fiscal year ending in July to jump to about $250 million from $179 million in revenue a year before. And analyst Catherine DePuy at Smith Barney in New York predicts that Authentic Fitness’ profit this year will hit $19 million, more than double the $8 million in net income in fiscal 1994.
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When Wachner took over Authentic Fitness, she inherited the old Speedo swimwear brand, known for its athletic swimsuits. Since then, she’s been on a buying spree of more classic, fashion-minded swimsuit labels. Authentic Fitness got a big boost from its October, 1993, acquisition of the Cole of California and Catalina swimwear lines. Both well-known and popular brands, they had languished in bankruptcy court, the victim of a leveraged buyout that didn’t work. Wachner snapped them up for $45.7 million--a fire-sale price, industry insiders say. Wachner now estimates the two lines will add about $60 million to Authentic Fitness’ revenues this year.
But observers also credit Wachner’s keen marketing sense for Authentic Fitness’ fast growth. Women’s swimsuits account for more than 80% of total adult swimsuit industry sales--and Wachner said she knows exactly what women are looking for.
“Women are more attentive to themselves and how they look in terms of their underwear and their swimwear than ever before,” she said. “It’s just as important to have the right swimwear as it is to have the right jeans, the right T-shirt, the right pair of cotton khakis. It’s all attitude and the way people feel about themselves.”
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Although swimwear manufacturers are now shipping the bulk of their product to stores for the selling season that lasts through August, production on the year’s line of swimsuits actually began about 18 months ago. That’s when companies began testing fabrics, after which they chose colors and designs.
For this year’s crop--priced from about $28 for Authentic Fitness’ Sunset Beach brand for juniors to about $80 for top-of-the-line Speedo, Oscar de la Renta and Anne Cole suits--Wachner said she is largely mirroring trends in apparel and underwear. And for that, she had to look no further than her other company, Warnaco Group Inc., the New York lingerie and menswear giant.
For example, Warnaco supplies catalogue and shopping mall retailer Victoria’s Secret with one of the padded, push-up bras that became the rage last year. So this year, Authentic Fitness is introducing through Victoria’s Secret the Miracle Bra Swimsuit, with the same gravity-defying qualities as the bra. Many other Authentic Fitness swimsuits this year also incorporate bra pads and underwires.
“The bust is in,” said Kathy Van Ness, president of Authentic Fitness’ swimwear division. “We push it, pull it, lift it, add flowers and embroidery.”
Throughout Authentic Fitness’ fashion brands such as Anne Cole and Oscar de la Renta, figure-enhancing features are a key element. Those labels, found mostly in upscale department stores such as Macy’s and Bloomingdale’s, include suits fitted with girdle-like panels and fat-firming fabrics. Most suits cover a lot more skin than the string bikinis of yesterday, with higher necklines, lower-cut legs and even sheer skirts. There’s not a thong bikini in any of Authentic Fitness’ swimsuit brands. Women want to look fit and sexy in swimwear, Wachner said--but middle-aged baby boomers also don’t want to be embarrassed. “Not everybody is a junior size.”
Wachner admits to keeping two drawers full of swimsuits at her home in New York “so I know what it feels like to wear them.” The only female head of a Fortune 500 company, Wachner assumed control of Warnaco in a hostile takeover in 1986. After turning the debt-burdened maker of Warner, Olga and Calvin Klein underwear around, she spun off Warnaco’s Authentic Fitness division to herself and other investors in 1990 for $85 million. In June, 1992, Authentic Fitness went public. At the current $14 a share stock price, Wachner’s 10% Authentic Fitness stake is now worth about $30 million.
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Authentic Fitness also makes fitness wear and ski clothes, but swimsuits are the company’s mainstay. And the big worry in the swimwear industry is that sales will float along at a slow pace for the next several years, said Bill Foster, swimwear strategist for Du Pont, the major supplier of fiber to U.S. swimwear manufacturers. Manufacturers are now in a mad race to find fabric innovations, new styles and designs to help resuscitate sales.
Jantzen is also trying to capitalize on the so-called body enhancement craze, and last year it introduced a swimsuit with a built-in push-up bra. It was so successful, said Roger Yost, Jantzen’s vice president of advertising and event marketing, that this year the feature has been added to 30 styles of suits.
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Other swimwear makers are coming out with suits that make the wearer appear slimmer. One by Carol Wior promises to take an inch off the waist and comes with a tape measure. Another swimsuit line, Body ID, has coded tags that tell customers which styles complement certain body types. “Swimwear tends to follow the same trends that street clothing does,” said Richard Martin, curator of the Metropolitan Museum of Art’s Costume Institute in New York. “In the past year or so, we’ve been looking at a return to shape.”
That trend is apparent in Authentic Fitness’ biggest swimwear line, Speedo. Long the leader in competitive swimwear--aquatic athletes from 53 nations will wear Speedos at the 1996 Olympics in Atlanta--Speedo has been aggressively peddled in recent years to fashion and amateur fitness markets. One Speedo swimsuit, called the hologram tanksuit, comes in patterned metallic shades--and retails for $89.
Also under Wachner, Authentic Fitness has opened 49 Speedo Authentic Fitness retail shops in the past couple of years. The stores carry colorful, body-hugging Speedo suits for men and women, as well as exercise outfits, T-shirts and swimming accessories. Analyst DePuy said the stores have been the biggest reason for the company’s recent growth.
Du Pont’s Foster also believes that Authentic Fitness’ increasing size gives its more leverage as it tries to capitalize on the trend away from swimwear sales at upscale department stores to discounters and mail-order firms. When Wachner acquired Catalina, a well-known department store brand, she switched to selling the line to the giant discount chain WalMart. Cole of California, meanwhile, is sold through more moderate-priced department store chains run by J.C. Penney and Federated.
Analysts say that big swimwear companies also should get stronger because the consolidation among retailers in recent years has led department stores to cut back on their newspaper and magazine ads. Now only a few large manufacturers such as Jantzen and Authentic Fitness have aggressive ad campaigns of their own. This year, Authentic Fitness bought ads for the first time in national magazines including Vogue, Harper’s and People.
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Authentic Fitness also maintains a stable of celebrity spokespersons, including Olympic swimmers Janet Evans and Pablo Morales and beach volleyball star Karch Kiraly. Wachner said she is also sticking by her longtime spokesman Greg Louganis, the Olympic diving champion who recently disclosed that he has AIDS.
And this month, Authentic Fitness will complete the designs for the swimsuits it will ship a year from now. What will be hot in ‘96? Lots of bright colors and prints, Wachner said. And the trend toward covering up and shaping up will only get bigger. After all, she said, “People are getting older.”
