5.11 Tactical is in for a wild ride.
It’s a trip that will put the tactical gear and apparel brand in front of millions of consumers and alongside multibillion-dollar brands in a five-year Nascar sponsorship.
That will play out as the Irvine-based company pushes for expansion in other segments, including outdoor and workwear retailers and a line for women.
The company, which moved most of its executive team to Irvine about a year ago from Modesto, has roots in gear and clothing for SWAT team officers, firefighters and police officers. Chief Executive Tom Davin said its traction in the niche market gives it a point of differentiation as it grows sales, which were up from a year earlier to more than $200 million in 2013.
The deal with Nascar came after 5.11 executives approached the professional racing league about a year ago with a pitch: Give the company an opportunity to design uniforms for the sport’s officials. The uniforms—long and short-sleeved shirts, fleece jackets, sweatshirts and mock turtlenecks—are designed with the racing circuit’s national schedule in mind, which means gear that can work in 90-degree weather in Phoenix as well as near-freezing temperatures in Tennessee.
“We said it looks like your officials are wearing a collection of things that aren’t really coordinated,” Davin said. “Let us take the opportunity to meet with some of the officials, identify their needs, come back with a recommendation. And we did that.”
Davin declined to say how much the company is spending on the multiyear sponsorship, except to say it’s “very significant, and probably the most significant in the history of the company.”
It’s developing a co-branded collection of apparel with Nascar for consumers. Plans call for it to be sold at race tracks initially and eventually to 5.11’s core public safety market and through outdoor retailers. The line is likely to be out this year.
It’s a measured approach that’s all about absorbing information in the first year of the sponsorship, said Chief Marketing Officer Guy Burgstahler.
“We knew we wanted to be very conservative, because anything we do with them, we want to do very, very well,” Burgstahler said. “We didn’t want to stretch ourselves too thin with all the other activities we have going on. Next year, we’ll probably go in a little harder and do more things with them, but their network of relationships is like nothing I’ve ever seen.”
Burgstahler said that at a recent Nascar event, he met about a dozen executives from other Nascar sponsors who expressed interest in doing business with 5.11.
“It’s amazing,” he said. “It’s the business-to-business part of it that they do better than anybody else. If you’re in the Nascar ecosystem, then they want to do business with other sponsors. They kind of share the wealth.”
5.11 is currently running a sweepstakes with Kentucky-based first-responder retailer Galls, a major customer of 5.11’s, for an all-expenses paid trip to a race of the winner’s choice. The 5.11 marketing team is also gearing up for the televised Coca-Cola 600 race on Memorial Day.
The Nascar sponsorship becomes even more important for 5.11 as it continues to look to new market segments.
Law enforcement, firefighters, military special operations and emergency medical services still make up the bulk of wearers, accounting for about 72% of sales, and Davin said those segments will remain the company’s core.
It’s the potential to nab other customers through outdoor and workwear retailers, which together made up about 15% of total sales last year, that has the company looking beyond its bread-and-butter base. Davin estimates sales from outdoor and workwear retailers could swell to 30% to 40% of the company’s global revenue over the next five years.
He said he sees the company as being at the forefront of the early stages of the tactical apparel segment’s growth cycle, akin to the action-sports industry before it called itself action sports.
5.11’s roots as a utility brand gives it the point of differentiation needed to compete in the market, he said.
“We’ve got the firefighters in your neighborhood (wearing 5.11). We’ve got the SWAT officer in Orange County SWAT. We’ve got the military special operations. We’ve got FBI agents. They’ve proven this. This is our source of authenticity.”
It is the pursuit of workwear chains that open the door to customers that are the construction-industry equivalent of military special operations teams, Davin said.
These are workers who climb wind turbines or high-tension wires, for example.
Much of the headway made so far was aided by 5.11’s earlier push into outdoor retailers such as Dick’s Sporting Goods and Cabela’s a couple years ago.
The company went from selling its merchandise in 90 stores spread over two outdoor retailers in 2011 to being in 900 stores across six outdoor or sporting goods chains at the end of last year.
“We’re getting more distribution in the mainstream because people see these are great pants, and that’s again part of the
Nascar partnership, because we know people are into this lifestyle of always being ready,” Davin said, referencing the company’s slogan.
Now 5.11 is focused on making sure its products works in stores, following the surge in its retail business, and is pushing the idea of tactical gear shop-within-shop concepts at stores.
“Once you get in, you really want to earn your stripes and expand your footprint,” Davin said.
It’s up to about 400 of the store-within-store buildouts.
A 2010 distribution deal struck with Lake Forest, Ill.-based industrial supplier W.W. Grainger Inc., which had $9.4 billion in sales last year, has ramped up in recent years. W.W. Grainger now sells 5.11 products—everything from sunglasses to work boots—to a broad range of clients.
There’s also room to grow on the women’s side, but Davin said that requires some additional education for retailers on the potential of that slice of the market.
“There’s a little bit of a chicken-or-the-egg issue right now,” he said. “Retailers, they’re not coming to us and saying, ‘Please do a women’s line.’ So we knew we had to build the women’s line and show it to them.”
