Owned by Compass Diversified Holdings (NYSE: CODI)
Employees: 750 U.S. (1,000 globally)
Industry: Consumer & Lifestyle
Products: Tactical apparel and equipment
Co-founder and CEO Francisco Morales is guiding the high-flying apparel brand into new markets all over the planet.
The popular tactical apparel company originated in the late 1960s from the mind of rock climbing pioneer Royal Robbins, who changed the way rock climbers scaled granite walls without the use of bolts. Robbins also pioneered modern rock-climbing apparel and created the "5.11 Pant" named after rock climbing’s highest difficulty rating at the time.
In 1998, entrepreneur Dan Costa purchased the Modesto, California-based Royal Robbins apparel company. At that time the 5.11 Pant was already the official pant of the FBI Training Academy in Quantico, Virginia. Francisco Morales joined Costa in 2002 at Royal Robbins the company. In 2003, Costa and Morales founded 5.11 Tactical as a company of its own, dedicated to serving public safety and military personnel, and the duo sold Royal Robbins back to its founder.
The company later moved its headquarters to Irvine, California, and joined Inc. 500 list of the fastest growing companies. Compass Diversified Holdings bought the company for $401 million in 2016 and it now posts annual revenues of $300-plus million with multiple retail locations. "We have 47 company-owned stores in the U.S. with five additional partner stores," said Morales. "We also have one company-owned store in Germany and one company-owned retail store in Australia."
The popularity of the brand has skyrocketed globally and stretched beyond the military and first responders but also to consumers who like tactical apparel. "As a company, we produce more than 1,000 products throughout our many different distribution channels," says Morales. "It is not difficult for us to meet the global needs of our end users because we have excellent distribution globally and are able to leverage those networks to meet the needs of different market requirements."
5.11 Tactical expanded to manufacturing more than apparel, and now has lines of backpacks, shoes, belts, and numerous other accessories. "Because our business has always been end-user driven, expertly designed and purpose-built footwear and packs were in response to the needs of the end-users we work with," says Morales. "It was a natural progression to expand our product offerings into those categories. We’ve since expanded our collection further to offer off-duty clothing, flashlights, and everyday tools."
According to Morales, the design and development of the products are done in the U.S., but some of the manufacturing is done overseas in order to meet global demand. "The competitive advantage to being in California is the design, engineering capabilities, and the creative talent," says Morales. "That’s what we are able to best leverage being here; being able to hire and retain top talent."
The supply chain is global: "Most of our fabrics are produced in Asia. We actively manage and have a long-term view of how we manage our supply chain, especially as a global company."
Morales says that the use of automation is key for the company to maintain quality and volume. "Computerized sewing and cutting have been necessary improvements needed to increase consistency within our product lines," he says. "There are continued advancements being made all the time by the machine manufacturers that we incorporate into our production lines to provide our customers with dependable, high performing products."
As the 5.11 Tactical brand continues to grow, Morales says that other outdoor and athletic apparel brands looking to partner with 5.11 Tactical. "Brands look to 5.11 to bring authenticity from public safety and the military into their sectors," he explains. "We have done great partnerships in the past with brands like CrossFit and Ubisoft, and when appropriate, we are always looking to explore other partnerships that are right for our brand."
Challenges: "The fusion of culture, processes, people, supply chain, and customers is always a delicate merger," says Morales. "Customers, suppliers, and our own company have to all come together in harmony as a part of the supply chain loop in an effort to deliver the best value and experience to the final consumer."
Opportunities: "We continue to expand in our core market-making professional products for professional lines of work," says Morales. "Then bringing our products that have crossover appeal [from the professional world into the everyday world] to mainstream consumers."
Needs: With increasing demand in the U.S. and globally, the company is endeavoring to increase its speed to market. "We want to be faster and better at everything we do," Morales says.