Refashioning Mossimo
At first glance, everything about his appearance says he’s a relaxed California kind of guy: the golden tan from leisurely beach days, the slip-on sandals, the ease of his casual pullover and sleek pants.
But the silver hairs sprouting around the temples of 35-year-old Mossimo Giannulli show the strain of having it all, nearly losing it all and now, trying to get it back.
“To go from a garage to a public company and then to fall flat on your ass--that’s a hard thing for a guy of 33, 34. I was challenged with so many more things than a typical 33-year-old,” says the chairman and creative director of Mossimo Inc., the beleaguered Irvine-based contemporary sportswear company.
His fall came quickly.
Starting with simple volleyball shorts, in a decade he built a $108-million sportswear enterprise. In 1996, Giannulli took his company public. Soon after, Mossimo stock soared to $50 a share and Giannulli, a college dropout, was, at 32, the youngest chief executive on the New York Stock Exchange.
But within two years, sales plummeted, profit disappeared and the stock price dropped to $1 a share as he stumbled launching upscale menswear and women’s-wear. Production and delivery problems hurt sales, credibility and Giannulli’s nearly half-billion-dollar fortune.
By 1998, Giannulli cut his $500,000 salary to $315,000 and took a new title, “visionary.” He hired for a year turnaround specialist John Brinko, who closed some businesses, slashed jobs and moved the company out of its fancy headquarters. The company is still operating in the red.
Now the designer is attempting a big comeback and betting heavily on winning. In December, Giannulli gave more than half of his 10.4 million shares of Mossimo stock to the company’s new chief executive, Edwin Lewis.
The former chairman and chief executive of Tommy Hilfiger and past president of Ralph Lauren Womenswear has brought in a group of retail heavy-hitters who helped build the Lauren and Hilfiger empires.
Their goal: Make Mossimo “the next great American brand,” with the hope that shoppers will soon have the same one-name familiarity with Mossimo that they do with Ralph, Calvin, Tommy and Donna.
Their challenge: to improve production, product and most important, the Mossimo image.
At Thursday’s annual meeting, Giannulli and Lewis made their original handshake agreement official: Neither man would take a salary this year, and their ownership would be split, with Lewis having stock options that equal 36.2% of the company, while Giannulli’s stake is 34.5%.
“He’s worth it. Divide and conquer,” Giannulli says.
The carefree optimism that characterized Giannulli’s early years as a hot-shot beachwear designer has been replaced by a steely intensity earned by hard business lessons.
“It hurt a lot,” says Giannulli, sitting on a low bench inside his Mossimo Supply store at South Coast Plaza. “My whole crew was quitting out from under me. All of a sudden, I was manning the ship by myself--I was a public company! It would have been easy for me to sell out. But I don’t think it would have been fair to my shareholders, to my family or to myself.
“I couldn’t quit,” he says, with a tone of defiance and pride. “And my friggin’ name is on it.”
The tough years coincided with a happier personal life, however, when the divorced Giannulli married actress Lori Loughlin in 1997. The couple, who are expecting their second child, still live well in a million-dollar Bel-Air mansion.
With Lewis, Giannulli says he now understands what went wrong and the value of failing.
“Nothing pained me like that time I went through,” he says. “Had I not reached those depths, I’d have never met Edwin. I’d have been so friggin’ cocky, I’d never have listened. Now I’m a better husband for it. I’m a better businessman for it. I’m a better father for it. You understand how to face challenges.”
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Under the direction of Lewis, he’s discarded some notions and practices that he once held dear. For instance, he once said his collection wouldn’t include anything that wouldn’t hang in his closet.
“That’s something I learned from Edwin. It doesn’t necessarily have to be in my closet. It would be a pretty small closet,” he admits.
The new team also is changing the look of the stores, the depth of selection in them, and helping Giannulli return to his design roots.
“All I worry about is marketing and product,” he says of his new job responsibilities.
The new line of men’s and women’s sportswear that will arrive in stores this fall looks more like the early Mossimo. It’s edgier, trendier, more sophisticated Californian and less skater kid. There’s an innovative brushed nylon that looks and feels like washed cotton; lavender, silver, white and black--colors that parallel current fashion trends. And in the cleanness of the silhouettes, the clever treatment of a collar, a pocket or a seam, there’s that Mossimo passion to be on top of what’s hot.
At their first meetings, 48-year-old Lewis, who came out of a comfortable retirement to take on the resurrection, says he saw the potential in the company and its founder.
“You could tell in talking to him that he had a real sense of style about him, and he knew what he wanted, but he didn’t know how to get there,” Lewis says. “For a guy in his position, he wasn’t desperate. He was very mature about his problems.”
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Giannulli says he eventually realized that the methods that he’d used to build the business were no longer working.
“I’d surround myself with people who were like family,” he says. But they, like himself, “were only capable to a point.
“We were growing like a weed and the product was getting very diverse. Then when the business went sideways, we went into protect mode. We got very conservative.”
The residue of those careful times still hangs on the store racks: simple logo T-shirts, uninspired plaid shirts and khaki pants. Not even Brinko’s hard-hitting measures were enough to turn around the company in the year before Lewis arrived.
“He [Brinko] was good for a time, but he couldn’t grow the business. He didn’t have a real apparel background or relationship with major retailers,” Giannulli says. “He was there to make the bleeding stop.”
The Lewis approach is fairly simple. His changes?
“Discipline and organization,” Lewis says, matter of factly.
“We created a design calendar which drives the company. It makes every department have to be on time,” he says.
“You must live by a calendar. Once you put that into effect, everyone knows they have to live it. This company had tons of people just here and there all over the place. These new people know what they have to do everyday when they come to work.”
And so does Giannulli. He says he is more realistic about the fashion direction his company must take to rival East Coast competitors.
“You need to appeal to the masses,” Giannulli says. “It can’t be so edgy that it sells to three people. There’s a fine line. You want to appeal to everyone, but if you do, you’re not cool.”
In addition, Lewis says every major department store and some surf shops will be carrying the line, which by next season will feature a broader selection of styles and colors.
“We are going back to what has worked and doing it better and building off of that better,” Lewis says.
Retailers have been receptive to the new direction, but the final vote will come this fall when shoppers see the new look.
Mossimo is carefully polishing its image in front of those consumers. There’s the whole California surfwear heritage to manage properly, the confusing change in direction the company took when it tried to go upscale and the history of major fashion companies originating on the East Coast, not the West.
Enter ad man Michael Toth, the executive creative director of Toth Brand Imaging, the same guy who drilled the name Tommy Hilfiger into the American psyche.
His plan? Capitalize on the California heritage and make it represent a sense of freedom that anyone--a cynical New Yorker or a plain-spoken Iowan--will understand.
A shift in the fashion cycle will help, he says.
“There is a trend developing to a much more fashion-driven sensibility. The East Coast and New England have always had preppy kind of roots,” he says. And Toth is among other fashion observers who say Mossimo could capture the 18- to 30-year-olds looking for something edgier.
It’s a look that Giannulli says is a mix of beachwear, active-wear and clubwear. Part of Toth’s plan is to make Giannulli familiar with his audience through personal appearances and instill the image of California freedom in every other area of marketing.
It was Toth who introduced Giannulli to Lewis.
“The two of them combined equal three,” he says. Toth has worked with Lewis for nearly eight years; with Giannulli for about a year, long enough to judge their respective strengths.
“Edwin has a sixth sense, like a radar, for what’s going to take off. From Polo to Tommy to Moss. I don’t think Edwin has ever lost,” he says. “The people who know that most are the retailers, because he’s made them a lot of money.”
Giannulli, he says, “is one of his own demographics that he’s selling to. He’s hip. He’s in all the right places. He’s familiar with the cultural shifts taking place,” Toth says.
If all elements of the plan succeed, Giannulli could fulfill a long-held desire to be the first West Coast designer heading a major company. The California heritage that he once shunned could be the secret to his success, Toth says.
“California--it’s the promised land. It’s where people go to fulfill their dreams.”
Valli Herman-Cohen can be reached by e-mail at socalliving@latimes.com.
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Highs and Lows
After more than a decade of unstoppable success, Mossimo Inc. hit hard times. Now, the Irvine company is embarking on an ambitious plan to become the next big American brand.
1986: Mossimo Giannulli, 24, starts making neon-colored, three-panel volleyball shorts in a Balboa Island garage.
1996: Mossimo Inc. goes public, making Giannulli, 32, the youngest CEO on the New York Stock Exchange; he’s named to the Forbes 400 list of richest Americans.
1997: In a major departure from active-wear roots, Mossimo Inc. launches men’s designer collection at New York menswear shows.
1998: Stock, which hit $50 high in 1996, plummets to $1 a share as the company struggles with production, quality and image problems.
1999: Edwin Lewis, who was named chief executive in December 1998 and given half Giannulli’s stake in the company, brings in experienced team from Tommy Hilfiger.
Mossimo Giannulli previews his new fall sportswear, a key component to reviving the brand.
