Bathing suit manufacturer back in the swim with Speedo pact. (Up Front).

Last fall, swimwear manufacturer Authentic Fitness Corp. was going to be put on the auction block to help its New York-based parent, Warnaco Group Inc., emerge from Chapter 11 bankruptcy.

But after Roger Williams signed on as a turnaround adviser in October, things quickly changed.

By December, Williams was made president, and had the City of Commerce-based company running at a profit. Warnaco now plans to keep the long-time manufacturer of well-known labels like Speedo, Cole of California, Anne Cole, and Catalina.

"They are operating at a lean and mean rate instead of bleeding," observed Ilse Metchek, executive director of the California Fashion Association, and former president of Authentic Fitness' White Stag division.

Warnaco executives decided to keep Authentic Fitness because they believe it can help lead a reorganized company into a profitable future.

Warnaco, which expects to emerge from bankruptcy later this year as a stand-alone company, earlier this month listed assets of $2.37 billion and liabilities of $2.45 billion.

Another local Warnaco unit likely won't be along for the ride.

A.B.S. Clothing Collection Inc. in Los Angeles, a maker of prom dresses that was acquired in 1999 for $55 million, is still on the selling block.

Allen B. Schwartz, a designer who started the collection in the early 1980s, has been showing prospective buyers through his downtown L.A. headquarters, sources said. He couldn't be reached for comment.

Licensing emphasis

At Authentic Fitness, Williams' plans center on branding. A new division recently signed a deal to license Speedo sunglasses and additional deals are being sought to place the Speedo name on watches, beach chairs, beach towels, toiletries, and 15 other products.

"We had a great brand name that wasn't being used," said Williams at Authentic Fitness' headquarters (where the corporate offices include a swimming pool). "In my opinion, one of the largest swimwear manufacturers was underdeveloped."

One of the first things Williams did was hire a vice president, Bryan Timm, to help fix manufacturing and delivery problems.

Another move has been to reactivate the junior swimwear division, which had been dormant for two years. Teens are some of the most prolific buyers of swim apparel, purchasing 35 percent of all swimsuits sold.

With the recent addition of Kathy Van Ness, president of designer swimwear, Authentic Fitness soon will be manufacturing junior swimwear under the Sunset Beach and Hot Coles labels.

In addition, Authentic Fitness launched a private label that is making swimsuits for Victoria's Secret. Williams is trying to find other companies that will put their labels on Authentic Fitness-sewn garments.

All this is keeping things busy for the 300 sewing operators at the City of Commerce factory, as well as 4,500 garment workers at the company's factory in Tlaxcala, Mexico, where up to 20 million swimsuits a year can be manufactured.

While revenues this year will fall to about $380 million from $420 million a year ago, Williams projects net income of more than $15 million. Last year, the company lost millions of dollars.

Twists and turns

The newfound optimism is just the latest twist for Authentic Fitness, which was owned by Warnaco in the late 1980s, sold in the early 1990s to a group of investors and then repurchased by Warnaco in 1999 for $435 million.

As a separate company in the early 1990s, the swimwear manufacturer was headed by Linda Wachner, who at the same time also was chief executive of Warnaco. Wachner commuted between the East and West coasts to operate the two companies, while she collected salaries from both, reportedly earning more than $158 million in salary, bonuses and options between 1993 to 1999.

Wachner transformed Warnaco from a sleepy bra company into a $2.25 billion clothing machine, acquiring brand after brand. But the company's sales nosedived when some of its retailers downsized or went out of business, and intimate apparel and jeans sales from department stores shrunk.

Earnings evaporated into losses of more than $340 million in 2000. The company's stock, which once sold for $44 a share in mid-1998, now trades for 5 cents a share.

Wachner was ousted last November, nearly six months after Warnaco filed for Chapter 11 protection in June 2001.

Tony Alvarez, a turnaround artist who took over operations, initially planned to sell Authentic Fitness. But instead, the company plans to sell other units, including Lejaby Inc., a French bra manufacturer; Izka, a French lingerie maker; and Ubertech Texas Inc., a research and development unit.

Early this year Warnaco sold GJM Sleepwear to Hong Kong apparel manufacturer Luen Thai Overseas Ltd. for $10.1 million, said Warnaco spokesman Doug Morris.