Lunada Bay Corp. has designed swimwear under the Mossimo label for 11 years. But now that Irvine-based Mossimo Inc. is drowning in a sea of red ink and other troubles, the Anaheim-based licensee is heading for calmer waters.
Lunada Bay this month signed a contract to design and make swimwear for bebe Stores Inc., a Brisbane, Calif.-based retailer and women’s clothing designer with 117 U.S. stores and others in Canada and the U.K. bebe was one of 20 companies that contacted Lunada Bay to make swimwear for their labels.
“We are marching on and frankly we are having a great time,” said Susan Crank, Lunada Bay Corp.’s chief executive. “Timing is everything in life and this business and the timing is right to do our own thing. The way things are going for us,I’m ready to move on.”
The new contract is part of Lunada Bay’s bid to diversify. Up to now, 80% of the contract manufacturer’s $40 million in annual sales has come by way of Mossimo.
But the future of the once high-flying company founded by designer Mossimo Giannulli is in question. Two weeks ago, Mossimo reported a $9 million quarterly loss, laid off 90 of its 100 employees and closed signature stores. Several of the company’s creditors have filed a bankruptcy petition. And the New York Stock Exchange is weighing whether Mossimo shares should be listed.
bebe, whose revenue was up 28% to $187.7 million for the nine months ended March 31, could help ease the Mossimo fallout for Lunada Bay. Mossimo, whose products are sold in high-end department stores such as Nordstrom, reported 1999 sales of $47.4 million. Lunada Bay designed Mossimo’s swimwear and bodywear.
Although Lunada Bay had courted bebe for several years, the company struck up a deal with bebe after news spread about Mossimo’s landing of a deal to sell clothes in Target Corp. stores, Crank said. She said she remains open to the idea of designing Mossimo clothes for Target stores.
“Moss’s deal he made with Target will be a good one for both Target and Moss, but as for our license, we are still talking with Target to see if Lunada fits in or not,” Crank said.
Court Overin, trade show director for Action Sports Retail Expo in Laguna Beach, said the bebe contract is good step for Lunada Bay. He said the company has proved itself in the industry with its past products for Ocean Pacific, and current lines for Mossimo, XOXO and GirlStar.
“If you want someone who knows swimwear, how to make it and how to distribute it,Susan is the person,” Overin said.
Crank said Lunada Bay also plans to launch its own swimwear lines, Becca Swim and Sport and Rebecca V, in July.
“So many of our retailers said the Mossimo swim and body product sold because of its design and fit,not just the name,” Crank said.
The Becca brand will sell mostly in specialty stores and fine department stores such as Nordstrom, while the Rebecca V line will court specialty stores such as Neiman Marcus, Saks Fifth Avenue and Fred Segal.
Crank, who is one of about a dozen shareholders in the privately held company, expects to increase her stake in Lunada Bay next year. The company’s new swimwear line is named after its designer, Rebecca Virtue, who has been with the company since graduating from the Otis School of Design 10 years ago, Crank said. The Becca line will sell in stores for $60 to $85, while suits in the designer Rebecca V line will sell for about $150. n