Retailers, consumers and prices
Check Out Line: Warnaco CEO sees Olympic gold for Speedo
Clothing company Warnaco got to boast about the strength of its Calvin Klein jeans and underwear business last week when it reported much better-than-expected earnings and raised its full-year outlook.
Now the company, whose stock rose 6 percent yesterday to a new 52-week high, says it is feeling “the Phelps factor” as U.S. Olympian swimmer Michael Phelps racks up the gold medals in Beijing, at times while wearing the company’s new Speedo LZR suit.
“Michael’s been a spokesperson for us, he’s been a model in catalogs for us. He’s a spokesperson of the brand,” said Warnaco CEO Joe Gromek in an interview on Tuesday on the business news cable television channel CNBC.
The benefits of wearing a LZR, which can cost up to $550, has sparked controversy in the international swimming community. CNBC cited murmurs of “technological doping” as experts question whether it can actually boost swimmers’ performances.
In the interview, Gromek dismissed any unfair advantage the suit may bring a particular swimmer or team, saying that every athlete has the opportunity to wear one, since the company shipped 3,000 suits to Beijing for the Olympics.
Speedo currently represents less than 15 percent of Warnaco’s business, while Calvin Klein accounts for more than 65 percent, Gromek told CNBC.
But he hopes the LZR’s prominent role at the Olympics will translate to success on store racks.
“We obviously have spent a lot of time on this one (the new swimsuit),” Gromek told CNBC, with “lots of discussion about how we can take this success story and take it into the mainstream.”
Gromek told CNBC that Speedo is already taking pre-orders for the suit and hopes to make it available to shoppers as early as September.
“I would be disappointed if we didn’t go through 10,000 or 15,000 pre-Christmas,” Gromek said. “It would be 50 percent better than the last suit that we introduced 4 years ago.”
The low end of Gromek’s forecast could bring in as much as $5.5 million in sales in one quarter, which is still a drop in the bucket compared to the $503.8 million in sales the company had in the most recent quarter.
But those drops can add up, and Warnaco sure knows how to move through water.
Also in the basket:
Beijing sees little retail lift from Olympics (WWD: subscription required)