Felicia Madrigal sees Laguna Beach-based Merrilee’s Swimwear returning to shelves at popular retail chains, including PacSun and Nordstrom.
“I’ve been romancing the idea of going wholesale again,” said Madrigal, whose mother, Merrilee Madrigal, opened the company’s first shop in 1977.
“My mom has worked so hard for so long, and I’d like to see this business grow in the near future—on a larger scale than what we’ve been doing—in hopes that one day she can sell and retire.”
Merrilee, meanwhile, enjoys the status quo, as “there is better control,” she said. The duo operates stores in Laguna Beach and Huntington Beach that carry the company’s swimwear collection, along with other apparel and home goods.
“You are not as vulnerable to fluctuations in the market, and you are not dependent on other retailers,” Merrilee said of their current business model. “You can do what you want.”
Mother and daughter “butt heads a lot” but also depend on each other’s strengths to create fabric patterns, source materials from Spain and Italy, design swimwear, and run manufacturing in the back of the Laguna Beach store. They also “beat the streets” of Los Angeles’ Garment District once a week to shop for women’s clothing, which accounts for about 58% of the company’s nearly $3 million in annual sales, based on a Business Journal estimate. Home goods and accessories—a relatively new category—contribute another 15%. Its swimwear line represents about 27% of the total.
Merrilee’s Swimwear posted a 13% uptick in sales in 2015, and a 19% increase last year. Before it expanded store offerings, “it was a lot harder,” Felicia said, adding that if a customer walked in and wasn’t looking for swimwear, the pair would lose out “on a good opportunity to sell,” whereas now “anyone can find something to pick up,” including men and “older women who come in and cannot resist the knick-knacks or home goods or accessories.”
“We try to sell things that are reflective of our own personal history and lifestyle,” said Merrilee, referring to pillows and blankets made with Kathmandu’s ikat fabric, whose yarns are tie-dyed before weaving.
The self-proclaimed “OC hippie” started making swimwear in the 1970s out of “Indian tapestry cloths” before stretch fabrics became the industry norm.
“I used to make my (bikini) patterns out of grocery store bags,” she said. “I put them in surf shops on consignment, and also sold them on street corners till I got my first shop.”
The Huntington Beach store was a success, enabling her to open a second, 5,000-square-foot location in 1986 in Laguna Beach. She also opened a sewing factory on Fifth and Fairview in Santa Ana to accommodate several retail accounts, including Pacific Sunwear of California Inc. in Anaheim and the now-defunct Wet Seal LLC.
Merrilee discovered by 1996 that her business could be more profitable and less stressful if she got out of wholesale. She brought 16 sewing machines and a 12-foot cutting table to the Laguna Beach location on Pacific Coast Highway, which also doubles as the company’s design studio and stockroom and is where she now employs about 20 people.
“When you sell wholesale, everybody’s margins are much less,” she said. “I can go home at night, and I don’t have to worry about a lot … Who gets to design, sample and manufacture, all in a 5,000-square-foot space by the beach in Laguna—nobody.”
Merrilee started bringing her daughter to work when she was a baby, and as a little girl, Felicia modeled children’s swimwear and later helped her mom at trade shows. She worked at the store while in high school and eventually moved into management.
“I’ve been her right-hand man for years now— since college,” Felicia said. “It’s nice to work together and share some of the responsibilities around here, because definitely it’s not a one-man show.”
The pair focus on “sexier” styles that cater to a “niche market,” mostly from “where our roots are” in coastal Southern California.
“We get in here people who are in high school, women in their 20s who love our swimwear, moms,” Merrilee said. “The Laguna Beach trolley drops off loads of people at our corner every 15 minutes. That helps a lot in summertime.”
Their current swimwear collection features about 20 tops and bottoms designs and another half-dozen one-piece suits. Most have “Moroccan prints and Middle Eastern overlays” and are lined with solid color fabrics so they’re reversible.
The Madrigals have also reimagined several of the brand’s original styles.
“Felicia has a finger on the pulse,” Merrilee said. “She told me, ‘Mom we should bring back the suit from the ‘Baywatch’ days’” of the 1990s, “so I did, and it was a hit. We redid the cut in the rear—it’s not as covering.”
The company’s design archives serve as its competitive edge, Felicia said, adding that “there isn’t very many authentic small businesses left that have a history. There are a lot of startups and emerging ideas, but we are one of the very few original brands with a story to tell.”