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Raj at the Ready

Raj at the Ready

Swimwear Maker Relies on Technology in Uncertain Times

By JENNIFER BELLANTONIO





Tustin-based Raj Manufacturing Inc., one of the nation’s largest swimwear companies, thanks technology for helping it ride out an uncertain time this winter.

“The key in our industry is to manage inventory,” said Alex Bhathal, vice president of strategic planning. “As a vertical manufacturer with an extremely flexible production system, we can have the best of both worlds, despite the events of Sept. 11.”

The 35-year-old family-owned business, which counts more than 400 employees and designs and makes women’s and children’s swimwear at its facilities here, continues to invest in production and inventory systems. It tracks what styles are selling and refills orders in real-time, Bhathal said.

The move gave Raj an edge following Sept. 11, according to Bhathal.

The swimwear industry was hit by a downturn in demand during the cruise season, which generally runs from October to December. Wary consumers tabled their travel plans,and held off buying swimsuits.

That put swimwear makers in a tough spot.

“Should they build inventories to sell as if it were a normal year? Or, should they produce less and risk running out of the best styles in the height of the season?” Bhathal said.

Raj designs and makes swimwear under the brands Athena Collection, Athena Pick Your Fit, Rajman, Guess? and Guess? Girls.

A number of makers went light on inventories, Bhathal said.

But following Jan. 1, there was an unexpected rise in business, according to Susan Crank, chief executive at Anaheim-based Lunada Bay Corp., which makes Becca Swim and trendy brands that include Girl Star, bebe and Lucky Brand swimwear.

“The past few weeks in Florida have been the best in the five years,” Crank said. “That was an area the was very hard hit during that cruise season that didn’t happen.”

In fact, Crank said “business is so good that as an industry there will be a shortage of product.”

“A lot of manufacturers are even looking to have more product out there more quickly so that some newness can be given to the consumers who are going to find that shortage very visible by the time that summer rolls around,” Crank said.

Eric Hertz, vice president of marketing at Arlington, Va.-based American Apparel & Footwear Association, which has a division representing the swimwear industry, said that swimwear makers are trying to gear up inventories later than they normally would to take advantage of that opportunity. Typically, the window to sell swimwear is between March and May, he said.

“Once you’re into July and certainly into August the peak opportunity is gone,” he said.

But Crank said swimwear makers are changing their thinking.

“It’s going to be a win-win situation for everyone,” she said.

For instance, Lunada Bay, which contracts its work to Los Angeles factories for quick turns, just launched Lucky Brand bathing suits and decided to increase its budget “threefold” vs. going light for its April and May delivery. The bebe brand will also have product being delivered in May and June, just in time for shoppers to consider a second or third suit, Crank said.

Raj also finds itself in a good spot, according to Bhathal.

“Unsold goods are kept to a minimum at all times, yet we are agile enough to react to an unexpected increase in selling,” Bhathal said.

That’s what’s happening now.

Unlike some local surfwear makers, whose warehouses are jammed with racks and rows of apparel, Raj’s warehouse looks sparse, with some bolts of fabric and thin rows of hanging swimwear ready to be shipped.

Raj maintains a 99.3% fill rate, according to Bhathal, “without having a warehouse full of merchandise that we have to liquidate at rock-bottom prices at the end of the season.”

“At the end of a season, the value (of this year’s swimsuits) plummet,” he said.

But Bhathal was quick to point there also are other factors to contend with in the swimwear industry: weather and nailing the hot styles.

“Swimwear is an intricate garment,” said Bhathal’s sister, Lisa, who’s the marketing director and executive vice president. “Fit has to be perfect.”

Tony Cherbak, a retail analyst in the consumer products group at Deloitte & Touche LLP’ s Costa Mesa office, agreed that finding the right sizes that fit all different body types always has been a challenge in the competitive industry. Plus, he said, it’s critical that companies predict what colors and styles will be hot,something technology can’t necessarily help them with.

“It’s always been a very, very difficult business to grow and make money in. Some companies have done it much better than others,” he said. “Lunada Bay is a good example of one that’s been very successful at it.”

Raj, which counts annual sales of about $120 million, is predicting a 30% increase in business this year, according to company officials.

Alex Bhathal has been fine-tuning operations since he came onboard his parents’ company full-time around 2000 after finishing his business master’s. He’s following in the footsteps of his father, Raj, who is chief executive in charge of sales and production.

His mother, Marta, president and chief operating officer, and sister lead the design team. The two work closely with their head designer, and have a room set up for brainstorming, with colorful fabric swatches posted to the walls.

Two years ago, the company was thinking about expanding its Tustin facilities. Instead, company officials streamlined operations for efficiency and added a second level inside the warehouse. Raj, which can make about 15,000 garments a day, also increased its workforce by 20% in two years, mainly by adding 20 people to its sewing department. Raj has seen growth in private label, which comprises 40% of its business, and branded product, which is 60% of its business.

For instance, Raj is launching a new line of high-end Guess? swimsuits for 18- to 30-year-old women that will sell in Guess? retail stores and select department stores.

“We’re always looking at what our next step is in terms of growth,” Alex Bhathal said.

Technology is key, he said.

“Despite 35 years of experience, we never exactly know what style the customer will want until she actually votes by buying a swimsuit,” he said. “Having this selling information, and more importantly analyzing this information sooner, has created a revolution in how retailers’ orders are created, processed, manufactured and shipped.”

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