A California entrepreneur beats the retail doldrums with a line of smartly packaged underwater gear.

    By Justin Martin

    (Fortune Small Business) -- Want to build a better snorkel? Add a safety whistle. Need more eye-catching goggles? Try lime-green frames.

    Cindi Walters believes underwater gear should swim against the tide of traditional design. That's good news for her 75-employee firm, C. Walters Intercoastal Corp. Last year CWIC's revenues hit $25 million, up 14% over 2007. Walters projects a 12% boost this year.

    A surfer and scuba diver, Walters, 49, launched her company 13 years ago in Foothill Ranch, Calif. Since then she's been licensing famous names like Body Glove and Disney (DIS, Fortune 500) to brand her innovative water gear, which she sells to retailers such as Sam's Club, Sports Authority and Wal-Mart (WMT, Fortune 500).

    Big retailers are becoming harder to crack, says Matt Powell, an analyst for Charlotte, N.C.-based SportsOneSource. Shoes and golf equipment account for 35% of all sporting goods sales at these stores. Aquatic gear pulls in a measly 1%.

    "In this economy, retailers are hard-pressed to give shelf space to a small category," Powell adds.

    Walters asserts that she's ready to handle the shelf squeeze. Last year CWIC designed slimmed-down, stackable packaging for everything from snorkels to fins. Masks and goggles now nest inside one another to take up less space. Thanks to the makeover, Walters says, retailers can fit 40% more of her products on the same racks.

    Buyers are taking notice. "Some brands think they can stand out more by making their packaging bigger," says August Portz, water-sports buyer for Sports Authority. "We have limited space, so we need packaging that sells itself. What she did is very creative."

    Walters is keeping that creativity flowing. For 2010 she's developing a line of canine aquatic gear, including goggles, fins and wet suits. Doggie diver down!