Surf shack to boutique

Frank Gunion started with surfboards out front and pieces of clothing on a line as window dressing


BERLIN -- As a college student, Frank Gunion spent his summers living as a beach bum, so it was only fitting that he open a surf shop in Ocean City.

"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 10 stores in Pennsylvania, Maryland and Virginia. It will open another store in Philadelphia this fall.

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.

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