A dark cloud is hanging over Authentic Fitness Corp., the L.A.-based manufacturer of several major swimsuit lines synonymous with sun and fun in California, as its parent company Warnaco Group Inc. struggles to stay out of bankruptcy.

Warnaco a multibillion-dollar manufacturer of bras, sportswear and swimwear is mired in losses and plans to cut 1,000 jobs this year. Its stock has plummeted from a 52-week high of $9.18 a share last May to $1.10 as of late last week.

"As Warnaco goes, so goes Authentic Fitness," said Ilse Metchek, executive director of the California Fashion Association, a trade organization for the L.A.-area garment industry.

While Warnaco's troubles could indeed sweep through Authentic Fitness, the two operations are actually quite different from a performance standpoint.

Warnaco lost $338 million ($6.41 a share) on $2.4 billion in sales in 2000. At year's end, it had only $11 million in cash and about $1.8 billion in debt. In short, it's very troubled.

Authentic Fitness, on the other hand, generated $355 million in revenues last year and is one of the few consistently profitable Warnaco units, although the company does not break out its profits. (In 1999, when it was still independent and reporting its earnings, Authentic Fitness posted net income of $21 million.)

Authentic Fitness is also the country's premier swimwear manufacturer, grabbing a 54 percent share of the U.S. swimwear market this year, up from 46 percent last year, according to Sports Trend Info, a market research firm in Florida.

Authentic's major coup is that it has the exclusive North American license to make and distribute Speedo swimsuits, active wear and accessories, which are sold in major department stores and in the company's chain of Speedo Authentic Fitness stores. Speedo is a major cash cow, generating nearly half of Authentic's total sales.

The L.A.-area company also pumps out an array of well-known swimwear lines such as Catalina, Cole of California, Anne Cole, Ralph Lauren, Oscar de la Renta and Sunset Beach.

Industry watchers are worried that Warnaco's troubles could seriously hurt Authentic Fitness if the parent company doesn't devise an effective recovery plan.

New York-based Warnaco, headed by Linda Wachner, 55, is trying to figure out how to pay its heavy debt load owed to several banks, which granted waivers on the company's loans until May 16. Warnaco officials insist their problems back East aren't affecting Authentic Fitness.


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