Lunada Bay Swimwear Catches Another Wave After New Leadership Carries On
Bill Schlabach’s journey to work begins at 6:20 a.m., when he leaves his lakeside house in Riverside County, drives 30 minutes to Chino, Calif., and hops a Metrolink train to Anaheim.
By 7:50 a.m. he walks through the front door of the Lunada Bay headquarters, not far from Disneyland, and past a white wall in the hallway bearing a poignant memorial to Susan Crank, the dynamic executive who led the swimwear venture for 30 years before she passed away last year at the age of 67.
As a tribute to her years of leadership and friendship, several photos show her posing with colleagues, standing in front of colorful fabric rows or hanging out in the office. In the middle of the wall is a painting that shows Crank’s profile in different hues.
Crank took over as president and chief executive of Lunada Bay in 1987 when few women headed up swimwear companies or any apparel companies for that matter. Through the decades, she stuck with it, even when the company’s principal moneymaker, the Mossimo swimwear license, saw its parent company almost declare bankruptcy.
Instead, she built up Lunada Bay’s own swimwear brands and designed swimwear for labels such as Lucky Brand, Betsey Johnson, Anne Cole and Catalina. The company’s own swimwear label, Becca by Rebecca Virtue, took shape 18 years ago for the woman over the age of 25. Later, Becca Etc. by Rebecca Virtue was added for the curvy customer.
So when the longtime apparel veteran went into the hospital in November 2016 and died three months later from lung cancer, the company could have come crashing down.
But several months before she became ill, Crank had hired Schlabach to join the company and work on modernizing Lunada Bay’s operating systems to make it a more efficient moneymaker.
In the small world of California manufacturing, Crank and Schlabach had known each other for decades through their Ocean Pacific connections. At one time, Susan was Ocean Pacific Beachwear’s head of sales and Bill had worked for a contractor who manufactured much of Ocean Pacific’s sportswear out of a factory in Gardena, Calif.
The two kept in touch, and through a phone call Crank ended up hiring Schlabach, who has been in the industry so long he even knows how to sew. “My coming to work here in April 2016 was part of a plan to take over her job in a couple of years as she transitioned out,” recalled Schlabach, a California native who grew up in Manhattan Beach with the sound of the ocean not far away. “Her passing away in January expedited the transition to my role as CEO. But it went as smoothly as you could expect when you lose someone who has been running the company for that long.”
Schlabach has always carried the same business DNA as Crank, believing in keeping lean inventories, a tight budget and looking to maximize opportunities.
As head of the company, Schlabach’s first major challenge was to launch new swimwear brands that complemented the Becca brand, which recently was named by market analyst The NPD Group as the fourth-bestselling brand in the United States.
“We wanted to be able to control our own destiny and not be reliant on the success or failure of our licensors,” said the 61-year-old Schlabach, who is one of the company’s 10 partners.
In 2017, the brand Isabella Rose appeared, considered the younger sister brand of Becca. It targets a 25- to 40-year-old age group and is a fashionable collection of swimwear that has more embellishments and carries a higher retail price tag of $148 to $168. Becca sells for $118 to $138. Isabella Rose was launched with a campaign of fashion influencers and a social-media blitz that gave the label a positive start.
It is designed by Julie Ann Silverman, who for years worked on the Betsey Johnson swimwear label when Lunada Bay had that account.
Next came Soluna, which hit swimwear and department stores this year and is geared toward the younger customer ranging in age from 18 to 30. Its retail price tag hovers around $98.
Soluna’s motto is “Live by the sea. Love by the moon” and carries a carefree vibe of mix-and-match prints and solids that appeal to the bohemian woman. It is designed by Priyanka Patel, who for years worked under Becca designer Rebecca Virtue, who is head of design at Lunada Bay.
Lunada Bay, which owns the lifetime Mossimo swimwear license, is still designing that swimwear brand for Target. It is a decades-long collaboration that generates 35 percent of Lunada Bay’s revenue. (As a private company, Lunada Bay does not reveal its annual revenues.)
But Target will soon stop carrying licensed apparel brands and instead plans to carry its own brands. So Lunada Bay has quickly switched gears and is designing a still unnamed private-label swimwear brand for Target that will be in stores in the near future.
With the Mossimo swim label still on Target shelves for a while, Lunada Bay is in talks with Iconix Brand in New York, which owns the Mossimo brand name, to figure out its next move.
Lunada Bay has been located in Anaheim ever since it was launched in 1980, but seven years ago it moved down the street to a larger industrial building that encompasses 40,000 square feet. More than half of that is occupied by the venture’s distribution center, where boxes are stacked to the ceiling and libraries of patterns, prints and swimsuits are stored.
The sample room, which could qualify as a small sewing factory, has 29 cut-and-sew operators, and the whir of sewing machines sounds like a hive of bees pumping out swimwear. In a room lined with rolls of fabric and spools of colorful thread, sewers guide small pieces of fabric through the machines, work on embroidered cover-ups and put the finishing touches on samples.
There are about 90 full-time employees at Lunada Bay, which has been a steady number for about a decade, with an additional 20 to 30 temporary workers coming in during the busy season. When Crank took over the business, there were 32 workers.
Beyond the sample room are spaces devoted to each label, where the designers and their assistants hang newly designed swimsuits on wall racks to build and rebuild each collection.
Schlabach, a congenial man with a ready smile and a laugh in his voice, may have spent 40 years in the apparel-manufacturing business, but before his arrival at Lunada Bay he had never worked at a swimwear company.
His first job was with Joshua Tree, a women’s clothing label, and its sister label, The Branch, based in Redondo Beach, Calif. He was the plant manager (where he learned to sew to understand the process) and later became head of production and operations until the company closed in 1981.
Then for years he worked for Lee Thomas, a sewing factory in Gardena, Calif., where he was the vice president of operations at the company, which did a lot of contracting for Ocean Pacific sportswear. Other stints included chief operating officer at Rampage Clothing, chief operating officer at juniorswear company Trixxi Clothing and, more recently, vice president of operations at Miraclebody Jeans by Miraclesuit Swimwear.
But the apparel industry is the apparel industry, with seasons, deadlines and sourcing problems to solve, whether it is outerwear or swimwear.
For years, Lunada Bay was one of the last California swimwear companies to keep its production in the United States, but these days most of the company’s swimwear is manufactured in Asia or Mexico. For Mexico, most of the swimsuits are cut in the United States and then shipped south for sewing to take advantage of free tariffs under the North American Free Trade Agreement and lower labor costs.
The ups and downs of the business often depend on how hot the sun shines during the summer. Last year was a very good year for the swimwear industry, Schlabach said, due in part to Victoria’s Secret exiting the swimwear business and concentrating more on lingerie and beauty products.
That has left a lot of space for new product at swimwear stores such as Everything But Water, a large swimwear retail chain whose business makes up 15 percent of Lunada Bay’s revenues. Nordstrom is another top retail account along with Diane’s Beachwear with 18 stores. “We have carried the Becca line forever,” said Diane Biggs, owner of Diane’s Beachwear. “It is like a gold mine for us.”
Bikini Ranch Boutique in Scottsdale, Ariz., carries three Lunada Bay labels—Becca by Rebecca Virtue, Isabella Rose and Soluna. Elaine Snider, the store’s owner, said Becca is her No. 1 seller. “I’ve carried Becca for years, and it is great quality. I feel it is a suit that anyone can wear. You can be 15 or 60,” she said.
Bestsellers such as Becca is what keeps the business interesting for Schlabach. “To get to do something new has been very exciting,” he said. “It’s amazing what you can do with only two-tenths of a yard of fabric.”