In the News

"It was a junky little place. A typical surf shack," he said of the business he ran during his summer vacations out of a small wood hut where he sold surfboards, T-shirts and bikinis.

But today, the man whose clothing of choice has long been flip- flops and swim trunks has turned his surf shop, South Moon Under, into a sophisticated house of fashion.

The clothing chain is headquartered in this small town just outside his old surfing haunts in Ocean City. It is still relatively small for a clothing company with 11 stores in Pennsylvania, Maryland and Virginia. Most recently opening a store on Chestnut Street in downtown Philadelphia.

But South Moon Under is steadily making a name for itself in the fashion world. It has become a popular chain among the region's young trendsetter crowd, carrying all the hot designers, from Juicy Couture, BCBG Max Azria, Citizens for Humanity, and Free People - just to name a few.

The retailer is gaining recognition nationally. Its clothing has been featured in several fashion magazines, including Lucky Magazine, Cosmopolitan, InStyle, Paper Doll and SHOP Etc. The largest number of shoppers to its Web site hail from Los Angeles.

"It's an excellent and fairly affordable resource for trendy of- the-moment looks," said Elise Loehnen, shopping news editor at Lucky Magazine. "They offer a trendy take on fashion that doesn't seem to be too intimidating, too expensive or too overwhelming."

But fashion was far from his mind when Gunion, now 56, opened South Moon Under in Ocean City in 1968 and ran the store during summer break while a student at George Washington University. His interest was focused on surfing, a hobby he picked up when his family would drive to the Eastern Shore every summer from Washington for vacation. He also liked the quaintness of beach living "where you didn't have to lock your doors" and people were laid-back.

"I just loved the beach," he said. "Once you got into the beach it was hard to go back to the city. It seemed natural to build a business around something which I loved."

His parents thought running a surf shack was an odd career choice, but gave Gunion the money to start it.

When a friend mentioned South Moon Under after seeing the novel by Marjorie K. Rawlings with the same title on a shelf, Gunion thought the wording would fit well for a surf shop since it played on the relationship between the moon and the tides at the beach.

Gunion has a black-and-white photo of the original store. The wood hut on the main commercial strip in Ocean City had a row of surfboards - which were 10 feet at that time compared with the typical 6 feet today - lined up outside the store.

There was little attention to appearance since the surfboards were the main piece of the business. Clothes were hung haphazardly from hangers on what looked like a clothesline in the window.

"We didn't know what we were doing and it showed," Gunion said.

But the business did well. Gunion left college early and moved to the beach to run the store full time. He opened a second store in Rehoboth Beach, Del. His wife at the time, who no longer works for the company, began adding more clothing to the merchandise mix after noticing how well bikinis sold. Women's clothing became a larger part of the business.

The big shift in the company came after Gunion made plans to expand "off the Shore." The first mainland store opened in Bethesda in 1980 and, for the first time, the business looked more like a clothing boutique than a swimwear shop.

Gunion, who concedes he doesn't have the strongest eye for fashion, began building a team of buyers to help the company expand.

Jeannette Cowan was hired fresh from college in 1979 as the company began to focus more on fashion. Today, she is the director of buying. She said the key to competing among the bigger players is to keep the merchandise fresh.

"The fashion world is always changing," Cowan said. "Just when you think you've got everything figured out, something else changes."

South Moon Under buyers attend as many fashion shows and merchandising conventions as possible. Many stores will buy large amounts of one article of clothing. South Moon Under may buy only a few pieces of a certain shirt or pair of pants.

"Our buying philosophy is that we go all over the place and cherry-pick," Gunion said. "Every couple of weeks a quarter of the store is different."

Loehnen of Lucky Magazine said more retailers are taking this tactic as consumers these days are more apt to become bored with fashion choices.

Retailers don't want to see the same dress in the store all season. And if they know a limited-supply pair of shoes is likely to sell out quickly, they'll buy right away rather than dwelling on the purchase, she said.

Many of the South Moon Under stores are like the one in Baltimore's Harbor East. The boutique has a young feel to it and the staff is on top of the trends. One manager, for instance, recently was wearing a vintage Aerosmith T-shirt, flip-flops and cropped jeans that stopped at her knees.

Along the back of the store are the latest designer jeans that cost well above $100. Wedges and summer sandals are on sale in the middle of the store in a section with plush chairs that one might find in a Georgetown bar and lounge.

As with most companies, lessons were learned along the way. Attempts to sell children's clothes and ski wear have been abandoned over the years because they weren't profitable. The apparel chain has raised its profile by increasing its Internet presence and moving into larger urban markets.

Gunion said he doesn't want the company to grow too big. For years it has had what he describes as "glacial" expansion plans of one store a year.

South Moon Under employs about 250 people companywide. It started nearly 40 years ago with two. Many are Eastern Shore natives who leave the area but find out later they miss beach living, such as a buyer who left Neiman Marcus to work for South Moon Under to be near her hometown.

Even though the company has changed direction over the years, Gunion promises there will always be a swimsuit and beach component. The company will never forget its roots.

"Even as we've moved to the city," he said, "we still have our toes in the sand."

The Sun - Baltimore, Md.
Author: ANDREA K. WALKER
Date: Jul 6, 2006
Start Page: 1.D
Section: BUSINESS
Document Types: News
Text Word Count: 1223

(Copyright 2006 @ The Baltimore Sun Company)