Alex Bhathal and Lisa Bhathal Vogel are looking to dive into luxury with their latest plans for the swimsuit company their parents founded 40 years ago.
Since taking over Tustin-based Raj Manufacturing Inc. last year in an investor-led buyout backed by San Francisco’s Swander Pace Capital LLC, the siblings have started their own line of high-end swimsuits, clothes and accessories.
The brother and sister duo last week unveiled their designer swimsuit line, dubbed Luxe, at a fashion show at Irvine’s Equinox Fitness. The line includes bikinis, one-piece swimsuits and dresses, shorts, skirts and shirts that can be worn over them.
The swimsuits and clothes are expected to sell from $45 to $200 at upscale department stores and boutiques. Details on where they’ll be sold still are being worked out.
Luxe marks a turn for Raj. The bulk of the company’s business is making and selling swimwear under license from other brands.
“We work with licensors all the time,” Vogel said. “But with Luxe, we get to go to town and do what we want to do. We’ll have a lot of flexibility.”
Raj has more than $160 million in yearly sales. It designs, makes and sells swimsuits under licenses from local companies O’Neill Inc. and St. John Knits International Inc., as well as Tommy Hilfiger Corp. and Guess? Inc.
In 1968, husband and wife team Raj and Marta Bhathal started the company, which now employs some 400 workers in Tustin.
Raj already makes its own swimsuits under the Next by Athena and Athena Pick Your Fit brands. Both sell for less than Luxe. They sell for $40 to $60 apiece at department stores such as Nordstrom and Bloomingdale’s, as well as through specialty shops, catalogs and the Internet.
Competitors for those suits include Anaheim-based Lunada Bay Corp., Malibu Dream Girl Inc. in Bell and Warnaco Group Inc. of New York.
With Luxe, the company is eyeing women in their 20s, 30s and 40s who like to wear designer clothes and shop at Neiman Marcus, Saks Fifth Avenue and trendy boutiques, Vogel said.
“The line has a modern look and a contemporary fit,” Vogel said. “It’s for women who are hip and love fashion. They know what the designers are making and what the celebrities are wearing.”
The company spent about eight months designing the swimsuits and clothes, Vogel said.
Luxe sandals, handbags and accessories also are in the works, she said.
Raj is launching its swimsuit line at a rough time. The slow economy has hit clothing stores hard.
And costs for running an apparel business,labor, insurance, materials and fuel,are on the uptick.
“It’s very clear that we’re entering an inflationary period,” Bhathal said. “As we’re entering a recession, inventory management is key.”
Making the bulk of its swimsuits in Orange County is expensive, but has its advantages, he said.
“We don’t have to buy boat loads of inventory from China and make projections for the season,” Bhathal said. “If the demand is soft we’ll produce less. We’ll chase whatever demand is there so that we’re not in a situation where we have to dump large amounts of products to discounters.”
Keeping manufacturing local means better quality and quicker production of clothes, Vogel said.
“It’s not just about control, it’s about quality,” she said.
Starting Luxe could be part of a growth bid by Raj, especially now that private equity firm Swander Pace is backing the company.
Swander Pace invests in consumer products companies with yearly sales of $20 million to $300 million.
The firm targets companies that make products under other brand names as well as businesses in personal care products, health products, household products, food and beverage and sporting goods.
Vogel and Bhathal are mum about how much of Raj Manufacturing Swander Pace owns.
Parents Raj and Marta Bhathal still are directors and work at Raj part time, they said.
The company’s relationship with Swander Pace is working out, according to Bhathal.
“It’s nice having a little more structure from a managerial and quantitative approach,” he said.
