Joe Gromek, CEO of The Warnaco Group, said the wild success of Speedo's LZR Racer swimsuit has led to a spike in sales at retail. “Speedo market share, which is already quite high, grew from 62% to 72% in the last quarter. So ten points is tremendous movement,” Gromek said. “We are getting recognition and we are feeling good about that.”
Gromek spoke to SEW after his presentation at the Keeping/Gaining Market Share seminar at New York City's Princeton Club, organized by Emanuel Weintraub Associates, the New Jersey-based consulting firm.
Nonetheless, Gromek said while an Olympic year typically provides between a 5% to 10% boost to Speedo's sales, he only expects modest growth from the brand going forward, particularly due to the tough economy. In 2007, Speedo's revenues fell 11.9% to $219.4 million from $249.1 million.
Warnaco continues to focus on reviving Speedo's profitability under new management led by Helen McCluskey, as well as a move to exit manufacturing operations.
“We're focusing on getting the profitability back to where it once was,” said Gromek. “When I joined the business five years ago, Speedo was the whole profit for the company so we feel good that it's moving in the right direction now. Helen McCluskey is managing the business. She's a smart lady and my sense is that Speedo is going to be a long-term highly profitable business for us as it had been in the past. So we like it.”
Gromek also reiterated to SEW that Warnaco has no plans to sell Speedo. “We're not afraid to sell off companies. We've exited brands and businesses and the ones we've maintained all meet our hurdle rate, which is great. So I think they can be enhanced and I think the jurys out as to whether we can substantially grow that Speedo business. But we're working on it.”
