After retreating from its retail expansion in the continental U.S., Hawaii-based Crazy Shirts Inc., which employs 175 people in Tustin, is expanding its distribution through San Francisco-based Duty Free Shops.
The T-shirt company and 46-unit retail chain moved its headquarters back to Hawaii in 1999 after two years here and since has closed more than half of its mainland stores. It already had been selling its products in two Duty Free stores in Saipan and Guam. But under a new contract Crazy Shirts plans to expand into new airport locations and develop a store-within-a-store concept for larger Duty Free Galleria stores in tourist locations.
Crazy Shirts also is selling a smaller sample of its products on 29 cruise ships, primarily in the Caribbean but also in the Mediterranean and the U.S. The move onto cruise ships was made through Duty Free Shops, which has a contract with San Francisco-based Starboard Holdings to operate 150 retail concessions on cruise ships.
“They are interested in buying our line of specialty dyed T-shirts,” said Randy Yeager, chief executive of Crazy Shirts.
The specialty dyed T-shirts are an exclusive line of products that are dyed with unusual products such as wine, beer, bubble gum, chili, chocolate and coffee. Last year, the company added hemp dyes to its 4-year-old line of specialty dyed products.
The company now is seeking to build partnerships with companies who sell products associated with the specialty dyes such as coffee retailers, chocolate retailers and microbreweries. It’s a new direction for 37-year-old Crazy Shirts, but there still is much to overcome.
“I originally moved to OC from Hawaii to consolidate the business here with several other executives,” Yeager said. “But after looking over the entire company, we discovered that it would be best to center operations for further growth in Hawaii and the Pacific Rim.”
At the time Crazy Shirts moved back to Hawaii, Yeager opted to stay in OC and become president of 3 Day Blinds Inc. in Anaheim. Twenty months later, he returned to Crazy Shirts at the bequest of founder Rick Ralston.
Crazy Shirts ranked No. 7 on the Business Journal’s most recent list of apparel companies in Orange County, with 175 employees. The company is one of three specializing in T-shirts, including No. 2 Alstyle Apparel/A & G Inc. with 1,700 employees, and No. 10, AST Sportswear with 140 employees, both in Anaheim. Crazy Shirts, however, is different.
The company buys blank T-shirts from manufacturers and handles the design, screen printing and embroidery in-house for its own retail business. Crazy Shirts products use environmentally friendly, water-based inks that are longer lasting than oil-based colors, Yeager said. The company also designs each of its stores individually to reflect its location.
In the past two years, Crazy Shirts shuttered 18 of its 33 mainland stores in tourist areas that were under-performing, including shops in New York, Utah, Colorado and an outlet store at Tustin Marketplace that closed last summer.
“The (Mainland) Company had strayed from its original mission to associate Crazy Shirts with locations in the Sun Belt, and most of those stores that closed were located in the Rocky Mountains and ski resorts that are dependent on weather conditions,” said Bette K. Hiramatsu, director of real estate and corporate development.
Among those stores that didn’t work out was one in the Peninsula Hotel on Fifth Avenue in New York. As a result, the company canceled a lease for a second store on 42nd Street before it opened.
“Even though our product is high-end casual, the kind of store that works best in those locations is luxury retail,” Hiramatsu said.
Sales reportedly have fallen from roughly $90 million in 1997 to an estimated $50 million last year. As a result, the company, a subsidiary of Ralston Enterprises Inc. of Hawaii, has laid off some 400 employees company-wide since 1997, including about 75 from its local headquarters and retail stores.
Additionally, the company in 1999 lost a license it had held since 1977 to use the cat logo created by San Francisco artist B. Kliban that is popular among Japanese tourists.
Crazy Shirts founder Ralston, a California native, started the company in 1964 after several years of selling airbrushed towels and T-shirts he made to tourists, first on Santa Catalina Island and later at the popular International Marketplace in Waikiki.
“The Smithsonian has collected a few of his designs and they credit him with being the first to take the T-shirt out of the underwear category and put a statement on it,” Yeager said.
The company’s first store outside Hawaii opened in 1973 in Southern California and a few years later the company created a subsidiary, The Mainland Company, to handle operations in the continental U.S. That effort culminated in the 1997 move stateside and the merger of The Mainland Company and Crazy Shirts.
But in recent months, Crazy Shirts has been getting back on track.
Yeager returned to Crazy Shirts in September 2000, replacing former Danskin Inc. president Bill Almon. Almon left because of differences in the company’s direction with Ralston, who remains actively involved in the company. Yeager’s background includes a 10-year stint as director of retail operations for Eddie Bauer Co. through the early 1980s.
Under Yeager, Crazy Shirts is undergoing a rebuilding effort at its retail division, with two new locations opening in Maui in November and two more planned for the French Quarter in New Orleans where one opened in November 2000.
Chris Kinard, director of human resources and administration, was one of about a dozen employees and executives, including Yeager, to move from Hawaii to Orange County in 1997. The company also consolidated its manufacturing in OC, including its embroidery and printing department.
“When we got over here, we discovered there had been an expansion that had not been the smartest,” Kinard said. “We had opened a lot of stores (whose sales) were not up to our standards (of $850-per-square-foot). These stores were in locations that were not consistent with our historical niche, such as mountain resorts and ski areas where there are tourists, but the season is short. We were developing unique art and silhouettes for a store that was only open for, say, three months a year.”
The chain now has 27 stores in Hawaii, nine in California, four in Guam, three in Florida, two in Nevada and one in New Orleans. n
