Moss the Boss : Red-Hot Designer Mossimo Giannulli Shoots for Fashion’s Big Leagues

Mossimo Giannulli is on the move.

As he circulates through the crowded headquarters of the apparel company he founded just under a decade ago, employees pepper him with make-or-break questions concerning the spring lines that Mossimo Inc. is now designing.

“It’s been a bit chaotic around here,” Giannulli said during a recent tour of the Irvine headquarters building that’s been stretched to the limit by a wave of recent hirings. “But this is a young company with an attitude, and I’m having more fun than I ever had before.”

At 33, he’s now the youngest chairman of a New York Stock Exchange-listed company, darting off to New York to court Wall Street investors, then to Las Vegas for a major apparel industry show and on to Europe to keep tabs on fashion trends.

He recently built a lavish home in Laguna Beach, and he’s overseeing construction of a new headquarters for the company he founded in a Newport Beach garage.

When it’s time for a break, Giannulli occasionally fires up the Moss Lounge, a well-appointed Chevrolet Suburban that serves as a limousine, and heads north to pal around with Hollywood friends, including superstar Janet Jackson.

Now Giannulli is making his boldest move yet as he starts to expand beyond his trademark men’s clothing into the rough-and-tumble world of “better” women’s apparel, a venture that bumps Mossimo up against fashion industry heavyweights such as Donna Karan, Tommy Hilfiger, Nautica and Ralph Lauren.

Any design missteps along the way could dull the company’s polished image in the fashion world. Now that Mossimo is a public company, Giannulli is feeling increased pressure from shareholders to post fatter profits and keep the stock price high.

Observers also caution that Giannulli--a professed micro-manager--can’t expect to keep his finger on all aspects of the fast-growing company.

For now, shoppers still scramble for his autograph, and Macy’s West Chairman Michael Steinberg and Bloomingdale’s Chairman Michael Gould have tabbed Giannulli one of the fashion world’s brightest lights.

Giannulli--his given name is Massimo, but he later adopted Mossimo, an extension of his “Moss” nickname--broke into the apparel business in 1987, financed by a $100,000 loan from his father, an Orange County landscape architect.

Competitors credit him with developing an early recognition of the power of marketing. Lots of guys from the beach were selling casual wear, but Giannulli made his line stand out by slapping on his distinctive “Mossimo” script and a stylized “M.”

But there was more to it than just writing his name on his product. Mossimo has cleverly intertwined his personality with his fashion sense.

The party invitations Giannulli mailed out for his 33rd birthday in June asked guests to provide their shirt size and favorite color. Within days, messengers had delivered 400 ruffled tuxedo shirts featuring a rainbow of colors. On the night of the party, the security staff at his home in a gated community on the Pacific Ocean in Laguna Beach simply looked for the telltale shirts.

That kind of flourish is typical of Giannulli, said Rosemary Brantley, Fashion Design Department chairwoman at the Otis College of Art and Design in Los Angeles.

“He’s got charisma, and he’s just what you think a designer should be,” said Brantley, who lured Giannulli to her campus two years ago to moderate a four-part fashion workshop.

The fashion school has attracted its share of top designers, Brantley said, “but I saw something we hardly ever see when a guest designer comes on campus. Kids were asking for his autograph. They adored Moss.”

“Our chairman thinks that Moss is the next major superstar American designer,” said Larry Hashbarger, director of special productions for Macy’s West, who has worked with Giannulli on fashion fund-raisers. “And I think he’s right. He has the kind of personality that people think a designer should have.”

So do a number of Hollywood stars, including Jackson, who recently invited the designer to appear in one of her music videos.

Hashbarger credits Giannulli with using his Hollywood connections to benefit Passports, a fashion industry fund-raising project that supports AIDS organizations in San Francisco and Los Angeles.

Last October, Giannulli convinced several Hollywood stars to serve as runway models during the Passport show in San Francisco, a move that “really was an exciting addition,” Hashbarger said.

“Moss is like a baseball star or someone from Hollywood,” he said. “He’s a very social person who loves to go out and meet people.”

Giannulli, who counts actors such as John Stamos and Jason Gedrick as friends, downplays his high-profile connections: “It’s just me and some friends I’ve developed. . . . It’s not something I do to sell clothes or anything like that. They’re friends.”

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A typical day for Giannulli, who is divorced and has a young son, starts with an 8:30 a.m. breakfast of fruit and yogurt eaten at his office in Mossimo’s surprisingly nondescript building in an Irvine office park.

A yellow toy dump truck, which has been parked on Giannulli’s desk since the Newport Beach garage days, overflows with messages, and associates constantly barrage him with questions about the design, color and cut of upcoming fashion lines.

One competitor described Giannulli as unable to keep his hands off the design process. He’s known as a demanding taskmaster who expects his well-paid associates to fight hard to get his visions on store shelves.

“Some people have called me a control freak,” Giannulli said. “But I don’t think anyone is as capable of running this company as myself. I think the company is dependent upon me providing the vision so these talented people can carry it out.”

Mossimo is a young company with young leadership. Donald A. Kerkes, the national sales manager who was hired away from Generra Sportswear, is the graybeard--and he’s only 46.

Giannulli hasn’t been afraid to reach outside for executive talent. Pamela A. Sargeant, the national sales manager of Mossimo’s new women’s line, was recruited from Guess, and merchandising vice president Edward J. Whitehead left Calvin Klein to join Mossimo.

And in October, longtime Deloitte & Touche executive Anthony Cherbak will join Mossimo as chief financial officer.

Mossimo’s fast growth in recent years forced Giannulli to scatter 250 employees throughout five buildings, but next summer the company will consolidate its work force at a 200,000-square-foot headquarters building in Irvine.

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Because of the company’s beach heritage, the bulk of revenue is still generated by sales of men’s apparel and accessories.

But men’s active wear--mainly T-shirts and volley shorts that sell for between $17 and $40--accounted for just 60% of Mossimo’s nearly $72 million in 1995 revenue. A third of the company’s revenue now comes from designer sportswear that retails for between $40 and $70--and carries decidedly fatter gross profit margins.

The 9-year-old company’s carefully orchestrated move toward upscale clothing and accessories--including $190 sunglasses and high-end footwear--is reflected in Mossimo’s advertising, which regularly appears in magazines such as GQ, Details and Detour.

Mossimo is also reshaping where its products--increasingly manufactured overseas--are sold and how they’re marketed.

In 1993, just 39% of the company’s sales were in department stores and specialty retail shops.

Sales through those outlets have doubled in recent years, and Mossimo is scrambling to add boutiques in major department stores, including Macy’s and Nordstrom, that are designed to help rev up sales by showcasing the company’s rapidly expanding lines.

The company reported profit of $19.1 million last year on revenue of $71.9 million. The year before, profit was $11 million on $44.3 million in sales.

Mossimo stuck its toe into women’s fashion in the early 1990s with a line of women’s swimwear manufactured by Anaheim-based Lunada Bay Corp. The line, which has been featured in the Sports Illustrated swimsuit issue, kicked in $1.2 million during 1995.

But the company’s biggest move on the women’s side of the department store aisle is in sportswear. During June and July, Mossimo shipped the first edition of a new junior women’s line that’s now in stores. It includes denim tops, pants and jackets, knit tops, dresses, shorts, sweaters and leather jackets that will retail for between $14 and $140. Industry analysts are predicting that the new line could generate $5 million in sales during the last quarter of 1996.

The addition of a women’s line is a key part of the plan to move beyond casual wear toward what Giannulli describes as “an apparel-based collection of lifestyle products.”

In short, Giannulli is carefully repositioning the company to do battle with the short list of celebrity designers who are on a first-name basis with fashion-conscious consumers.

But rather than license his name willy-nilly to gain market share quickly, Mossimo has moved relatively slowly.

“One problem you see as companies get bigger and bigger is that they start losing control over their designs,” said one competitor. “So many hands get involved in it that the line starts to look like too many different things.

Giannulli describes his role as keeping the rapidly growing company on a course that matches his vision. And he provides a relatively simple benchmark for what he wants to see: “When it comes to menswear, my rule has always been ‘Is this something I’d like to see hanging in my closet?’ ”

That careful pace, however, could be threatened by shareholder demands given Mossimo’s initial public stock offering in February. The stock hit a high of $50.125 earlier in the year before falling slightly, to about $42, prompting some grumbling from disgruntled shareholders. The stock closed Friday at $44.125, up $1.50, on the New York Stock Exchange, giving the company a market capitalization of well over $600 million.

Analysts have marked the stock a “buy,” given the potential revenue growth in women’s wear and the fact that Mossimo has yet to seriously explore international sales.

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The next time CaliforniaMart President Maurice “Corky” Newman sees Giannulli, he’ll be presenting him with the prestigious Fashion Performance Award that the Los Angeles-based fashion industry center gives each year to a high-flying designer.

That’s a far cry from 15 years ago, when Giannulli showed up on Newman’s doorstep for a date with his daughter.

Although Orange County is filled with successful beach apparel companies, “very few have made the move over,” Newman said. “It’s not easy. It’s sort of like an actor on a TV sitcom trying to make it big-time in the movies.”

Newman links Giannulli’s continued success as his company grows to his ability to remain focused on his visions--and his willingness to assemble a strong team of executives.

Newman views Mossimo as a company “that’s got lots of options. . . . Mossimo is like a pool player with lots of shots lined up on the table. It’s not a company that’s so mature it has no growth options left.”

During the next two years, Giannulli plans to bolster his lines of designer sportswear for men and women. The upscale side will be increasingly important as Mossimo makes its bid to join the likes of Calvin, Oscar, Ralph and Donna.

But industry observers caution that Giannulli has a long way to go before he joins that select circle.

“There are lots of sharks out there when it comes to designer fashions,” said Alan Millstein, editor of the New York-based Fashion Network newsletter. “And there’s no tougher group out there than the Murphy Browns of the world . . . the fast-fashion customers who love to drop names--and are willing to pay for the privilege.”

Mossimo is already bumping up against some of the nation’s leading men’s sportswear names, and the pressure will continue to mount as he battles for space on the women’s floors of the department store.

Initial responses from customers suggest that the new women’s line will be a hit. One major department store buyer described the Mossimo name as a “magnet . . . that will draw people into the store.”

Another buyer said the Mossimo name and image are so easily recognizable that the chain didn’t bother testing the new line.

“He’s going to start right up there at the top. We just took it out of the boxes and stocked it in all of our stores.”

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Up and Coming

Mossimo Inc. has been on the move ever since it was founded in a Newport beach garage in 1987. The sportswear-oriented company went public early this year, and expansion plans include a line of dressier women’s clothing.

Mossimo Inc.

Headquarters: Irvine

Chairman / CEO: Mossimo Giannulli

Business: Clothing and accessories

Went public: Feb 23 1996

Employees: 250

Initial public offering: Four million shares at $18

52-week higb: $50.125

1995 sales: $72 million

1995 net income 19 million

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Stock success

Mossimo debuted Feb. 23 and closed at $25 share. By June 5th, it had doubled but lately it has been training in the $35-445 range. Weekly closing stock prices

Note: Market was closed April 5

Source: Bloomberg Business News; Researched by Janice L. Jones / Los Angeles Times