Tustin-based Raj Manufacturing Inc. has inked a deal to make Tommy Hilfiger’s swimsuits.
Raj was tapped by the New York licensing arm of Hong Kong’s Tommy Hilfiger Corp. to design, make and distribute the company’s bathing suits.
The suits are set to be sold in department stores and other shops nationwide for spring and summer 2006, according to Alex Bhathal, Raj’s executive vice president.
Tommy Hilfiger’s swimwear license previously was handled by Jantzen Apparel LLC, which was bought by Miami-based Perry Ellis International. That 2001 agreement recently expired.
“Tommy Hilfiger called on us since we have swimwear industry expertise and a history of successful partnerships with designer labels,” Bhathal said.
Tommy Hilfiger is in need of a jumpstart.
The company, which was founded by the iconic designer of the same name in the 1980s, has been restructuring and revamping its lines to help stem sales declines.
Tommy Hilfiger said recently it expects its 2006 revenue to fall more than previously expected in part because of reduced demand from U.S. department stores.
Meanwhile, the company delayed reporting its financial results in June, citing an ongoing federal investigation over buying commissions. The company said it’s in talks to settle the charges.
Tommy Hilfiger expects that Raj’s “strong sourcing, product quality and retail relationships position them” to give a boost to the line, said Sharon Waldron, executive vice president of licensing at Tommy Hilfiger.
Raj also holds the license to make, sell and distribute swimsuits for Los Angeles-based Guess? Inc., Irvine-based O’Neill Clothing and Irvine-based St. John Knits International Inc., among others.
The company also has its own lines: Athena Collection, Athena Pick Your Fit and Rajman.
“The labels that we now have are complementary and build a very complete brand portfolio,” Bhathal said. “We will most likely focus on growing our current brands. However, we are always open to a great opportunity.”
Raj, which is family owned and run, doesn’t have to hire workers to handle new work from Tommy Hilfiger, Bhathal said.
Hiring Gains
The company gradually has been adding staff during the past few years, and now counts about 400 workers, he said.
“We’ve added positions in most departments, mostly in design and sales,” Bhathal said. “We will add new positions as the need arises.”
Tommy Hilfiger is looking to grow its business, which includes women’s and junior girls’ bikinis, one-piece swimsuits, cover-ups and other beachwear in the $78 to $108 range.
Raj plans to tap its network of “premier and better department stores, fashion boutiques and swimwear specialty stores” to “broaden Tommy Hilfiger’s distribution in appropriate channels,” Bhathal said.
Some of the stores that are expected to sell the Tommy Hilfiger swimwear include Bloomingdale’s and Macy’s.
Raj will work with the company to design the swimsuits. Then it will make and distribute the suits at its sewing and distribution operations in Tustin.
The company is one of the few Orange County clothing makers that continues to produce locally. Another is St. John Knits, which has more than 2,000 local workers.
Both have said that the state’s high cost of doing business, including pricey workers’ compensation insurance costs, have been a factor.
St. John Knits streamlined production during the past few years, including closing a 25,000-square-foot sewing factory in Van Nuys last year.
Raj also has looked at its options. But Bhathal said the company doesn’t plan to move production out of the state or country.
“The business climate in California is still very tough, although it doesn’t seem to be getting worse,” Bhathal said.
Raj would rather stay in OC since it’s the “mecca of the beach lifestyle,” Bhathal said.
“So it makes sense to stay here,” he said. “Our lives and our families are here, so we will try our best to keep the company production here in the future.”
Raj also faces other industry pressures, such as swimsuits being made by offshore factories for a lot less.
To keep competitive, Raj has to make “fashion-right product,” offer quick deliveries and exceptional quality and service, said Bhathal, who oversees production.
“Our company is definitely in a growth mode, most recently focusing on expanding our international distribution and increasing our penetration in premier retailers,” he said.
Bhathal and his sister, Lisa Bhathal Vogel, who handles marketing, are both being groomed to eventually take the company reins from their parents, Raj, who is chief executive, and Marta, who is chief operating officer.
Plans include adding more mid-level managers to free up the Bhathal children’s time so they can take on other responsibilities.
