SwimSpot Holdings started out five years ago as the retail arm of Tustin-based Raj Manufacturing LLC. These days the subsidiary serves as the swimsuit maker’s eyes and ears, collecting data on customers’ preferences and shopping habits.
“SwimSpot has proven to be an important distribution channel for our company,” said Raj President Alex Bhathal. “We treat it as our lab to test new merchandising concepts, new product innovations, and as a way to get closer to the consumer.”
The eight-store chain sells swimwear Raj makes under license for Hurley International LLC in Costa Mesa; Guess Inc.; Reef; Splendid; and Foothill Ranch-based Oakley Inc., a recent addition to the brand roster, among several others. Its competitors include Orlando, Fla.-based Everything But Water, which sells high-end swimsuits from Irvine-based L*Space, Michael Kors Holdings Ltd. of New York, and others.
2010 Debut
SwimSpot, which has about 100 workers, rolled out in 2010 as an e-commerce venture.
It opened its first pop-up store in 2011 at The Outlets at Orange and turned that into a permanent location in 2012.
Two more stores followed the same year, one at The Oaks in Thousand Oaks and the other at Westfield Topanga in Canoga Park. It has since established stores in Irvine Spectrum, Fashion Island in Newport Beach, Westfield Fashion Square in Sherman Oaks, Glendale Galleria, and two Arizona locations—The Shops in Lake Havasu and Scottsdale Quarter.
SwimSpot decided on each mall after weighing various factors, including some retail basics.
“With ‘brick-and-mortars’ it’s all about location, location, location,” said Senior Vice President Rose Jannuzzi.
The mix of stores has been put together with an eye on the wholesale business of its parent company, which ships to retailers ranging from department stores to specialty shops.
“Our goal is not to go and open up stores right next to our strongest wholesale retail partners,” she said.
SwimSpot also maintains three to five pop-up shops at other shopping centers during the peak summer season.
“A pop-up is a nice way to see what potential revenue is,” she said. “So if we can make money at a location, we are absolutely willing to do a [permanent one]. … This season we had to pass on three really good opportunities just because we have the bandwidth to open only so many stores.”
SwimSpot’s revenue grew 42% this fiscal year, approaching about 10% of its parent company’s sales, which were estimated at about $130 million last year.
And there is opportunity to grow, Jannuzzi said, adding that, “for our online business, we have really just scratched the surface.”
“Click and pick up” is one of SwimSpot’s strategies for 2016, as more of its customers look to shop online and pick up their merchandise at a nearby store.
‘Hanger Appeal’
The retailer’s data analytics also show that what sells well online is not necessarily the most popular item at brick-and-mortars, and vice versa. It has to do with “hanger appeal.”
“With some swimsuits, when you look at it on a hanger it’s not that attractive, but when you put it on a body it looks great,” Jannuzzi said. “So we use mannequins (in stores) to show that.”
The data also indicate that some of SwimSpot’s customers prefer to buy several suits online and try them at home instead of going to a store to purchase just the right one. Free shipping and exchanges for purchases over $75 help sweeten the deal.
“They say that women would rather go to (the) dentist than go and try on a swimsuit,” she said. “Our customers are usually walking into a store because they have a need, they’re not just browsing.”
Data on styles that are ringing up healthy sales, especially early in the season, are relayed back to Raj.
“One of our key objectives is to have product in the stores so we can gain consumer feedback and [use it] to improve our production,” Jannuzzi said. “Our goal is to get as much information to build our overall business—it’s not about any one channel.”
Her team is working on an “off-season strategy, because our Christmas runs April through July,” she said. “We are looking … to get more revenue when there is a considerable amount of traffic in the malls during the November-December time frame.”
SwimSpot will be a testing ground for women’s active and lifestyle apparel that “goes from land to sea,” including swimsuits from Next that can also be worn on a jog or for a yoga session.
“It’s a normal second because a lot of fabrics that are used are similar or exactly the same—it’s anti-chafing and dries quickly,” Jannuzzi said.
