Four years into their roles as co-presidents, brother and sister Alex Bhathal and Lisa Vogel have held their own at Tustin-based Raj Manufacturing Inc., the swimsuit maker their parents started nearly 40 years ago.
The two have guided the company through the worst retail downturn in recent memory and expanded with global sales and new products.
“You have to work 10 times as hard for the same result,” Vogel said.
But “at least we have the same result as opposed to being another way,” added Bhathal.
The two became co-presidents after buying out their parents, Raj and Marta Bhathal, in a 2007 deal led by San Francisco’s Swander Pace Capital LLC.
Their company designs, makes and sells swimsuits under its own brands and under licenses from local company St. John Knits International Inc. as well as Tommy Hilfiger Corp., Guess? Inc. and others.
Raj doesn’t disclose revenue, which is estimated by the Business Journal at about $130 million a year.
Sales are up about 7% from a year earlier, according to the siblings.
Vogel and Bhathal have pushed global sales amid the prolonged U.S. retail slump. Business in Canada, Mexico, Australia, Europe, South Africa and Japan is up nearly 400% in the past five years, according to Vogel.
Vogel and Bhathal have taken other steps to offset a weak U.S. market. They’ve ramped up Raj’s upscale swimsuit business, which offers better profits.
The company’s luxury line includes its own Luxe by Lisa Vogel line and swimsuits made under license from Rancho Dominguez’s Ella Moss and Irvine’s St. John Knits International.
“All of those (luxury brands) are doing really well and are a big driver of our growth,” Bhathal said.
For Vogel, Luxe is a chance to do what she loves: designing swimwear.
Brands
Raj recently added Splendid, Splendid Girls, Hurley, Hurley Girls and Reef to its roster of brands. Others include Next by Athena, Athena, Tommy Hilfiger, Guess? and St. John, which date back to their parents.
It also makes swimsuits for retailers that sell them under their own brands.
Vogel has been putting her stamp on designs for all of the brands, mixing the skills she learned growing up with her bachelor’s degree in business from the University of Southern California.
“If there’s anything I know, it’s swimwear,” Vogel said. “It’s in my blood.”
Vogel said she initially didn’t want her name on her own label.
“Alex had to push me to do that for Luxe by Lisa Vogel,” she said.
So far, it’s paid off, said Bhathal who has a business master’s from USC.
“We’ve been able to showcase Lisa and have a personality around the brand,” he said. “It’s one of our fastest-growing.”
Other efforts include a new website, swimspot.com, where online shoppers can buy Raj’s swimsuits directly.
The company also sells on websites such as Amazon.com Inc.’s Zappos.com.
Raj opened its first pop-up store at Irvine Spectrum Center this past summer. The temporary store served as part revenue producer, part research center.
“It’s a little laboratory for us,” Bhathal said. “We don’t expect it to be a main driver of growth. But it’s a way to get closer to the consumer.”
More stores are planned, Vogel said.
Raj is one of a few U.S. makers of swimwear. Just across from its headquarters is the plant where workers sew most of its swimsuits, cover-ups and other items.
Bhathal or Vogel can poke their heads in on the sewing any time to check things. They have floor managers constantly inspecting swimsuits, checking for quality, fit, embroidering or embellishments.
An adjacent warehouse houses some 10,000 swimsuits and cover-ups, all with bar codes affixed to them so Raj can track them from warehouse to customers and see what’s selling and what’s not.
“Close-outs”—merchandise that doesn’t sell and ends up at discount retailers such as Ross or TJMaxx—are about 2% to 3% at Raj. That’s low compared to industry standards, according to the company.
Damages on the clothing are about two-tenths of 1% of product, also much lower than industry standards, according to Raj.
“The validity of the original business plan of the company—controlling production, being quick to market, being reactive—those are things that we take for granted but they are unique and vitally important,” Bhathal said.
Production
Making products here means Raj can turn around orders in two weeks versus six weeks or longer for other apparel companies.
The company’s business making suits for retailers—known as private label—has seen dramatic changes, according to Bhathal.
“It used to be private label was more about making specific suits for specific retailers at lower-price points with less risk and more volume, but that model is really different for us now,” he said. “What we’re doing is really working with retailers to design and execute customized product and programs for their stores.”
Creating a swimsuit takes about six months from design to production.
Early resort lines or test lines are sent to sunny parts of the country in advance of the traditional summer sales season, bringing in sales data from retailers and consumers in, say, Hawaii or Florida.
“We call March the Christmas of swimwear,” Vogel said.
Those early sales help determine what gets reordered for the summer season.
So do trends in other types of clothes.
“A woman doesn’t want to wear it in a swimsuit until she’s comfortable wearing it in sportswear,” Vogel said. “So if green is the new trend, she’s not going to go out and buy a new swimsuit until a year later. In a way we are drafting off the sportswear trends.”
What’s “hot” also can be a moving target. Swimsuits produced under license from Costa Mesa’s Hurley International LLC, part of Nike Inc., are doing well, according to Bhathal. Pre-book orders—or advance sales—of Hurley already are up 90% for 2011, he said.
“It’s drafting off the success of the Nike/Hurley relationship, where there’s a lot of great marketing behind the brand and innovative product,” Bhathal said. “And with our business model, there’s first-class execution where we’re able to maximize the business by chasing the sales and really growing it in season. It’s really working right now.”
Gomez is a former Business Journal editor and freelance writer based in Long Beach.
