What the Hell Happened?

Inside the collapse of the Mossimo empire

But anyone in or around the industry will tell you that a fashion house getting its lunch handed to it is absolutely, simply, almost invariably the way things go. Success is unusual. As one fashion analyst said, "The only thing that distinguishes the Mossimo story is that he's from the West Coast and that he's heterosexual."

Those who think that Giannulli was a "pygmy"—as Fashion Network Report called him—fancying himself in the same company as Calvin Klein and Donna Karan, conveniently forget that Klein's company would probably have gone out of business in the early '90s if David Geffen hadn't given him $62 million to pay off his debts. Donna Karan? On the day Mossimo's stock hit 50 cents, Karan's stock—once trading at $30—was at $7.

These things happen in fashion. All the time. Like every day.

"Moss has been in business 13, 14 years—that's a century in this business," said Tom Knapp, founder and owner of Club Sportswear, who met and became friends with Giannulli while they were attending USC in the mid-1980s. "The first ASR [Action Sports Retailer] show I ever had a booth at was 1985. I was looking back at the material from that show the other day, and I realized that of all the companies there, only 10 are still around. They come and they go; it happens all the time."

Here's what happened to Mossimo:

He grows up in Newport Beach, a popular but kind of strange kid because he cares a lot—a lot—about how he looks, about how everything around him looks. His mother, Nancy, later told People magazine that she would take him to friends' homes and he would study and remember how the house was decorated "down to the doorknobs."

He attends USC but drops out in 1987 to start his own business, which he runs out of his Balboa Island apartment: garage, patio and living room converted into shipping and staging areas; upstairs bedrooms overflowing with fabric. In his first year, Mossimo clocks sales exceeding $1 million.

Ostensibly working in the surfwear industry, he becomes famous first for volleyball shorts with his "M" stamped on the butt. His clothes are never really adopted by hardcore surf and skate kids. Instead, he distinguishes his brand and reaches a much broader audience with clothes that fuse Southern California beach with Las Vegas Rat Pack cool. One pair of volleyball shorts looks very much like it was made from tuxedo pants.

By 1992, Mossimo oversees 52 employees and $32 million in sales despite a grueling regional recession. By 1996, there are 300 employees, and Giannulli is a star, even appearing in a Janet Jackson video. The company has a name and a back story that people love: beach bum made good. Never mind that it's not true. Giannulli was no bum—upper-middle-class family, Corona del Mar High School, ambition. He was fastidious and visual, even as a kid: he tailored his Little League uniform so it looked and fit better. He customized his bike and skateboard so they stood out, and when he got older, he did the same thing with his car. He didn't just like looking good; he needed it. He was famous for how particular he was about the arrangement of things on his desk and how pictures and memos were hung in his company's Irvine headquarters. He hired people based not on their fashion experience—many of them had none—but on their personal sense of style.

This is how he hired Ryan Heuser, who was Mossimo's head of public relations: "I was working in the warehouse, and every morning a coffee truck would come, and Moss would go out with everybody else and get coffee and a bagel and just sit and talk with everyone," said Heuser, who eventually left the company to start Paul Frank Industries. "I would talk to him at times, and I guess he saw the way I dressed and started to ask me what kind of clothes I liked, and one day he just said, 'We got to get this guy inside [company headquarters].'"

Heuser would rise to prominence in the company's marketing department while becoming part of Giannulli's inner circle, which some called "Moss' Posse."

"It was wonderful," Heuser said. "There was probably a total of eight guys, and we would roll in his Suburban limo and go to magazine parties—very high-profile parties—or take a Lear jet to New York for fashion week. Those are things I remember; those were the best times. You didn't talk about them when you got back in the office because you didn't want people to feel left-out, but I'm sure there was some resentment. But while I was there, things were still going well. I'm sure there was probably more resentment when things weren't going so well."

Giannulli hung out with beautiful people like John Stamos and one of the Baldwin brothers—the good-looking one, I believe—as well as actress Lori Loughlin, whom he married. His house was stocked with the standup bass he didn't play but looked good, the cigars he didn't smoke but looked good. When In Style magazine noted religious objects such as church pews, novena candles and a baptismal font in the house, Giannulli told its reporter, "Don't dig too deep; I just like the stuff."

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