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Bugle Boy Pins Hopes on a Brand-New Tune : Apparel: The once trend-setting, Simi Valley-based manufacturer develops a full line of clothing for males. The goal is to reverse an erosion in sales.

April 13, 1993|DON LEE | Los Angeles Times

A few years ago, Bugle Boy was one of America's hottest companies. Teen-age boys and young men were consumed with its baggy cargo pants, and the company had a top-rated television ad to boot. For the year ended April, 1990, Bugle Boy earned $44 million, on sales of over $500 million--nearly double the previous year.

But fashion trends keep changing and the cargo look began to fade that year. And so nearly did Bugle Boy.

"We could have gone out of business, we really could have," William Mow, Bugle Boy's secretive founder and chairman, admitted recently during an interview.

Since 1990, Bugle Boy has been quietly restructuring--from a supplier of trendy pants for young men to a full-line apparel company for males of all ages. Mow, 57, hopes the strategy will end sliding sales--he expects $440 million in fiscal 1993--and cushion the private Simi Valley company against the vicissitudes of the apparel industry.

Over the last three years, while fighting pressure from bankers and a recession that has shrunk its retail base, Bugle Boy has created a new line of more-basic shirts and pants through its network of Asian suppliers, built a T-shirt plant in Rancho Dominguez and opened 109 outlet stores around the country to help move its excess inventory.

Mow--whose name rhymes with how--has long dismissed the idea of going public. But now he is considering taking his company public to raise cash in hopes of reaching $1 billion a year in sales, and to chase his much-bigger rival, Levi's. (Levi Strauss has annual sales of about $5.6 billion.)

Bugle Boy recently hired new accountants, lawyers and a chief financial officer to prepare for a stock offering. Yet Mow says that probably won't happen until November, 1994.

"We don't feel our performance today is good enough to be a public company," said Mow, who owns 90% of Bugle Boy. Yet Mow said his company has been profitable in each of the last seven years, and expects to earn $15 million for the year ending April 30.

That's still only one-third of the profit Mow made in his best year, in fiscal 1990, the last year of the four-year cargo pant craze. Earlier in that decade, Bugle Boy also struck gold with parachute pants--nylon trousers with a lot of zippers.

"The history of the company was they were fast-paced and geared toward trendy merchandise," said Harry Bernard, a partner at Colton Bernard, an apparel consulting firm in San Francisco. "That's still their strength, but in many ways it's their vulnerability," he said. "It is very difficult to make a transition from young men to other lines."

Certainly, Mow is used to challenges. Mow, whose family fled communist China when he was 13, started an electronics firm in the 70s called Macrodata. The firm was later bought by a big public conglomerate, after which Mow was fired and accused of fraud. Mow was later exonerated in court.

To pay legal bills for that case, Mow needed a new business and he stumbled into the apparel trade, starting Bugle Boy in 1976. Today, Mow could sell the company and retire as a rich man. "But then what?" he said. "What I enjoy most is competition."

Lately, there have been signs of a resurgence at Bugle Boy. Phil Turner, merchandise manager at Val Corp., which operates 15 department stores in Indiana, said he was ordering 30% more from Bugle Boy for this fall. And Kathy Blackburn, a spokeswoman for Mervyn's department stores, one of Bugle Boy's largest retailers, said, "Their transition has been very positive and we are increasing our business with them for that reason."

Mow said that by 1994, "we will be at $500 million in sales again."

But if Bugle Boy hopes to grow fast again, it will take much more than a few increased orders. The company has to change its image and sharply boost sales in the huge older men's market, said more than 15 industry analysts and retailers, many of whom were interviewed at a men's apparel trade show earlier this month in Las Vegas.

While Bugle Boy sees itself as a supplier of family clothes at a moderate price, many see Bugle Boy as it once was--a supplier of high-fashion, high-priced pants for young men in their lates and 20s.

"When I think of Bugle Boy, I think of strong bottoms for young men," said Michael Black, a vice president at Union Bay, a Seattle-based rival that does about $200 million in sales.

Analysts say Bugle Boy will also have to win back customers such as Jason Burgeois, an executive with Ballin's, a men's store in New Orleans that hasn't bought anything from Bugle Boy since cargo pants. "I'm looking for something conservative now, and I still picture them as having too much extras," Burgeois said, referring to Bugle Boy's old cargo pants that had nine or more pockets.

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