New Lines Will Boost Mossimo Sales, CEO Says

Mossimo Inc.’s sales should improve by the first of the year based on orders being placed for its expanded product lines, Chief Executive Edwin Lewis told shareholders Thursday during the company’s annual meeting.

While declining to predict specific numbers, Lewis said retailers “see success” in the redesigned clothing line of the struggling Irvine company.

After a year and a half of belt-cinching, Mossimo announced this month that it had lost another $1.5 million in the first quarter while sales fell 42%. Last year, the company lost $13.8 million and sales declined 36% to $45.3 million.

But the company’s struggles failed to dampen the spirits of the 32 shareholders who attended the 40-minute meeting. They seemed pleased to have Lewis on board, and one speaker expressed hope that the new boss will stay.

Lewis, former chief executive of Tommy Hilfiger, was hired in December, receiving half of founder Mossimo Giannulli’s shares as part of the deal.

He attempted to reassure the group with a comment that drew laughter.

“I spent six months thinking about it before joining,” he said. “I plan on being here, God willing. If I’m not dead in six months, I’ll be here.”

Mossimo is struggling to regain its footing after stumbling when it tried to switch too quickly from its beachwear roots to more fashionable clothing.

In addition to revamping its product line, the company has resolved past delivery problems and hired an outside advertising agency to promote the product, Lewis said.

The holiday line, some of which was displayed on mannequins for the meeting, will soon be shown in several high-fashion magazines, Lewis said.

Shareholders assembled in the company’s receiving warehouse and took seats on linen-covered folding chairs. Reporters were barred from the meeting.

Giannulli, dressed in black trousers and a black V-neck sweater, welcomed the guests as a piped-in Van Morrison sang “Cry Salty Tears.” Giannulli asked that the music be turned down.

The group made short work of its business, electing Giannulli and Lewis as directors and approving the company’s stock-option plan for Lewis.

Back-patting consumed part of the meeting, with Giannulli calling Lewis “a genius in this business” and Lewis describing his new partner as “a visionary.”

Giannulli spoke briefly about the company’s difficulties and acknowledged that there “was not a lot of creativity going on” during 18 months of cutbacks.

But he is no longer worried, he said.

“The mind-set and professionalism is different now,” he said. “It’s inspiring.”

The day before the company announced it had hired Lewis, Mossimo’s shares traded at $3 on the New York Stock Exchange. By Dec. 28, the stock had climbed to $14.63.

On Thursday, the shares closed at $8.44, down 19 cents.

* HAPPY FACES AT MOSSIMO: Shareholders seem pleased with having a new CEO at the helm. E1