Then he got a call from 5.11 Inc.

“I thought I had finished my life’s work” in retail, Brown told the Business Journal.

However, 5.11 is “the opportunity to take what I did every day from a passion work perspective, and then connect it really meaningfully with what my family is all about.”

The tactical apparel and gear company based in Costa Mesa named Brown in January as its new chief executive, replacing co-founder Francisco Morales, who is now the executive chair for 5.11.

Brown is taking over as CEO of a company that recorded more than $500 million in sales last year and is aiming to quadruple its store count from 123 to 400 in the coming years.

“He’s coming in with a fresh set of eyes and not only that, but with a lot of expertise,” Morales told the Business Journal.

Zumiez Expertise

Brown was previously North America president for Zumiez Inc. (Nasdaq: ZUMZ), which operates 756 stores that sell action sports apparel. The company, which has a market cap around $300 million, last week reported fiscal 2023 sales fell 8.6% to $875.5 million.

He’s also worked at Zion’s Co-operative Mercantile Institution, as well as Eddie Bauer, Nautica International and Tommy Bahama.

In 2019, Morales helped to convince Brown to join 5.11’s board of directors and then convinced him again to be its new CEO this year.

“I feel like we had a great football team, and now we have a quarterback with a specific [skill set],” Morales said.

Brown was praised for his operation skills by 5.11 owner Compass Diversified (NYSE: CODI), which has a portfolio of 10 companies—its other local holding is Newport Beach’s Lugano Diamonds—and is valued at $1.8 billion.

“Troy Brown, who had very high positions at Zumiez for many years, along with many [other] relevant businesses, we believe is very strong at operational excellence and he’ll be working with Francisco Morales [who] understands brand and product development and will stay on as executive chairman,” Compass CEO Elias Sabo told analysts on last month’s earnings call.

“We believe Troy is very strong at driving operational efficiencies and at delivering for the end customer in a DTC (direct-to-consumer) environment, and we think that combination will really yield tremendous benefits.”

Passion Customers

Morales and partner Dan Costa launched 5.11 in 2003 to manufacture more durable clothes for public safety professionals, starting with a pair of pants specially made for the Federal Bureau of Investigation.

5.11 now works with thousands of government departments and distributes products to wholesalers in 120 countries alongside its DTC website and retail stores.

Since 2016 when Compass paid $408.2 million to acquire 5.11, its revenue has grown almost fivefold. In 2023, sales climbed 9.4% to $533 million while its operating profit increased 7.4% to $46.7 million.

Among Compass’ 10 brands, 5.11 is the largest unit by sales.

5.11’s passionate customers who serve are what makes the company stand out, Brown said.

Morales credits its core group of customers, including military, first responders and similar workers, with sparking the effort to improve 5.11’s apparel.

Brown said he knows well 5.11 because he’s the father of sons who have served as a policeman, a prison guard, a firefighter in training and in the Air Force. Brown noted he understands the importance of 5.11’s long-lasting clothes and gear.

“That’s why I took the call so quickly because I know this is a passion-based brand,” Brown said. “What we need to really focus on is a growth mindset and the set of activities that’s going to allow us to scale its passion.”

The pair intend to work closely together; their offices are next to each other in the Costa Mesa headquarters.

“This is about two leaders, who are very passionate about the same consumer segment, partnering to use our collective strength to have an impact,” Brown said.

“We’re doubling down on leadership,” Morales added.

Tactical DNA

5.11 can expand beyond its “rabid, core consumer,” Brown said.

“There are consumers out there who will love this brand,” Brown said. “It’s in their DNA, but they may not be fully aware of it yet and that’s part of why I’m here.

“I bring a set of experiences and some tools to help the team think a little differently than they’ve thought about in the past, grounded in this idea of [knowing] who our consumer is and [needing] to understand what they expect.

“We’ve got to figure out how to exceed those expectations, which then creates a very evangelistic set of consumers, which then starts to feed on itself and starts to grow the brand itself,” Brown said.

The new CEO will lead 5.11 by adding new types of customers.

“I think one of the things you’ll see is us starting to develop a deeper connection with other communities,” Brown said, citing sectors such as off-roading and hiking.

Brown said that 5.11 will start to host more community events and meetups with these additional communities “to become part of the fabric of their lives and expose them to 5.11.”

“To [the point] where we’re just part of their communities and to be where they expect us to be,” Brown added.

Past store openings have included fitness competitions between local fire and police departments. Brown wants to figure out how to expand these experiences with customers at a larger scale beyond existing markets.

“It may be obvious when you look at somebody who’s on a police force or in the military, but you may not be thinking the same thing about somebody who’s out in the outdoors hiking in Moab, or riding a bike,” Brown said.

Luggage on a Mission

5.11 Inc.’s “purpose-built” designs have been applied to all kinds of apparel and gear, from jeans and jackets to dog harnesses and flashlights.

“You will continue to see us innovating,” former Chief Executive Francisco Morales said of his transition to executive chair.

The apparel company’s co-founder has typically kept an ear open to customer comments on any product, so 5.11 can jump on improving or reinforcing the design. There have also been items that unexpectedly surge in popularity from time to time.

One category that has recently experienced fast-paced growth has been its luggage line.
5.11’s duffel bags were originally designed with tactical input from traveling trainers of military and first responders, known as “road warriors,” and were introduced to the market several years ago.

Over the years, improvements have been made to the overall structure and design to increase durability and functionality for use by a variety of consumers, from tactical professionals to traveling athletes.

“I’m confident to say we make the best suitcases in the market to fit a wide range of missions,” Morales said.

The bags range in price from $52 to $285.

He noted that there hadn’t been any extra marketing for the product.

“A substantial amount of growth came from post-COVID ‘revenge travel’ as consumers started traveling again,” he said.

5.11 followed suit by ramping up inventory and advertising both on its website and in stores.

“We see that as one of the categories that will continue to be at the forefront of what you will see this year,” Morales said.

The post Stretching the Fabric at 5.11 appeared first on Orange County Business Journal.

Reaves joins the likes of former running back Reggie Bush and pro golfer Jon Rahm, who have partnered with the golf apparel retailer since 2023 and 2021, respectively.

The Lakers shooting guard is known for his trick shots while playing golf, which Reaves films for his own social media account, @Hillbillybogey. His profile counts almost 50,000 followers.

TravisMathew, which has almost 50 retail locations, is in talks with athletic brand partners to also represent the firm’s rapidly expanding women’s collections. This category is projected to make up around 25% of the company’s sales in the next few years.

The retailer is a unit of Topgolf Callaway Brands Corp. (NYSE: MODG) under its active lifestyle segment, which reported 2023 revenue increased 9.2% to $1.1 billion driven by double-digit revenue growth at TravisMathew, officials said.

The post TravisMathew Partners with LA Lakers’ Austin Reaves appeared first on Orange County Business Journal.

On the first day of 2024, Morales transitioned to executive chair of the company’s board of directors while another board member, Troy Brown, stepped in as CEO.

Morales is said to continue working with the 5.11 team on corporate and product strategy and will remain “a significant shareholder” in the company.

“This transition period has been both busy and immensely enjoyable, offering me the unique opportunity to view our operations from a different vantage point and to envision the future of 5.11 with fresh eyes,” Morales told the Business Journal.

Morales was appointed CEO after Compass Diversified (NYSE: CODI) acquired the apparel company for $401 million in 2017.

5.11, now the largest of the seven subsidiaries under locally run Compass—which also owns Newport Beach’s Lugano Diamonds—reported sales climbed 9.3% in 2022 to $486 million.

Since 2018, Morales has led the retailer through a major brick-and-mortar expansion going from 40 stores to its current 124 company-owned locations.

The “purpose-built” and versatile clothes 5.11 designs and manufactures, mainly for military and first responders, are also sold across more than 1,114 wholesale partners globally.

Apparel, including some pieces that Morales designed himself, has been worn by both international leaders and fictional action heroes.

Morales was one of five honorees at the Business Journal’s Excellence in Entrepreneurship Awards last March.

“In my new role, I will be focusing more on long-term strategic growth, brand stewardship, and ensuring that 5.11 continues to lead and innovate in the apparel, footwear and gear industry,” Morales said.

Incoming executive Brown has been on the 5.11 board since 2019, and most recently ended 15 years with retailer Zumiez as president of its North American division.

“What Franciso has done over the last five years to ‘Serve those who Serve’ has been nothing short of exceptional and I am honored to partner with him and the fantastic team at 5.11,” Brown said.

The post Francisco Morales: New Journey at 5.11 appeared first on Orange County Business Journal.

The womenswear firm is moving headquarters to “better accommodate the brand” as it exists today, a St. John representative told the Business Journal.

“Orange County is our home, so our goal was to stay close, and this facility features a collaborative environment to help us grow in the long term,” officials said.

The move marks a boost in space for the luxury retailer, whose current base near John Wayne Airport runs about 32,000 square feet. The company’s Irvine footprint also includes a neighboring 20,000 industrial facility in the business park.

The fashion house has over 200 employees in Orange County and the new headquarters will allow the entire team to operate under one roof.

“The new landlord has other tenants in our industry, and we are truly excited to plant new roots for the next chapter of St. John,” the representative said.

Top Leases

The two-story building in Anaheim, known as Fifty-Five Fifteen, is owned by an affiliate of Klein Investments, a Newport Beach-based family investment group, property records indicate.

The office at 5515 E. La Palma Ave. runs 155,351 square feet in total; it’s near the Riverside (91) Freeway and Imperial (90) Highway.

About a decade ago, the building held the headquarters of now-defunct Fisker Automotive.
St. John signed the lease in the fourth quarter of 2023. It was the second-largest new office lease transaction in OC last quarter, according to data from commercial brokerage Cushman & Wakefield.

The area’s largest reported lease for the quarter was struck by Canon USA Inc., which inked a 92,893-square-foot space at Irvine’s Google Center office campus, according to C&W’s data.

Redevelopment Plans

St. John’s current Armstrong Avenue base in Irvine, part of three-building portfolio totaling about 145,000 square feet, was recently listed for sale with an asking price of $40.3 million, according to data from real estate market tracker CoStar Group Inc.

The airport-area site is being marketed by brokers at CBRE as a possible redevelopment play, with the potential to hold a new industrial building running about 180,000 square feet.

Redeveloping the former locations of the apparel company has proved lucrative for area real estate firms over the past decade.

Prior to the Armstrong Avenue location, St. John was long based at an industrial building at the busy intersection of Jamboree Road and Michelson Drive, about a mile from the airport. That space has since been redeveloped into creative office space, and currently counts e-bike company Super73 and media firm Viant Technologies as its tenants.

That building, at 2722 Michelson, sold for $103 million in 2021. It was the most expensive single-building office sale in the airport area of Irvine that year.

Brand Focus

St. John Knits, focused on luxury women’s clothing and accessories since 1962, counts 44 retail stores in 13 countries as of June. This includes a local spot at Fashion Island in Newport Beach.

The company has been in the process of transitioning from a manufacturing business to a “brand company” with a new focus on its marketing efforts, according to parent company Lanvin Group Holdings Ltd. (NYSE: LANV).

Its year-long marketing campaign in 2023 was in partnership with television showrunner and producer Shonda Rhimes. The brand ambassador is known for creating shows such as “Grey’s Anatomy” and “Bridgerton.”

St. John recorded revenue of around $51.4 million for the six-month period from January to June 2023, up 11.3% compared to the year prior.

St. John is Lanvin’s third-largest unit by sales and accounted for about 20% of the operator’s total revenue in 2022, according to regulatory filings. Lanvin is currently valued at $363 million.

The parent company said in regulatory filings that the Irvine business has the potential to top more than $200 million in annual sales by 2025, with China and other Asian markets presenting a major opportunity for growth.

St. John reported sales over $90 million for 2022.

Its largest market currently is North America, representing 89% of its revenue.

The post St. John Moving Fashion House to Anaheim appeared first on Orange County Business Journal.

The firm started selling its soccer jerseys, cleats, gear and other apparel in specialty shops in 2019; by this year it has expanded its reach to around 3,000 stores domestically.

Charly USA is set to grow even larger with its newest partnership, becoming the official apparel and footwear partner of the United Soccer League (USL).

The deal, announced this month, marks the first U.S. professional soccer league partnership for the company.

The 45-person Charly USA team, housed in a 15,000-square-foot Irvine office, has entered a multiyear deal with the USL to not only provide uniforms and gear for the league’s teams but also sell licensed merchandise across its 3,000 points of distribution in the U.S.

The USL is the second division of the country’s hierarchy of the sport, below Major League Soccer.

In addition to the main 24-team USL league, which includes Irvine’s Orange County Soccer Club, the USL also has several other affiliated leagues, encompassing nearly 200 teams, which Charly USA can begin to work with on a team-by-team basis as part of the partnership.

Brand Heat

Wells, who was hired to lead the U.S. division of Charly in 2018, said he had heard that the USL’s partnership with Germany-based Puma was coming to an end in 2023, and worked for the past year and a half to sign the deal.

“You can’t have a conversation about professional soccer without talking about our brand right now,” Wells told the Business Journal.

Charly has been focused on “building brand heat” for the past five years, from collaborations with the Call of Duty videogame to special collections themed after Lucha Libre wrestling and the Mexican holiday Day of the Dead.

Signing with the USL’s San Diego Loyal soccer club in 2021 was likely the most significant step toward this deal, according to Wells.

He said “the phones started to ring” after signing with the San Diego team, whose founders include U.S. soccer great Landon Donovan.

Revenue has grown more than 100% year-over-year the last four years, according to officials, who declined to specify their current revenue figures.

Charly’s core product is its custom kits that allow any partner or team to work directly with the company to design the desired product for retail release.

“We collaborate from day one of concept design to delivery to the consumer,” Wells said of the kits, which are Charly’s greatest advantage compared to its competitors, he said.

“San Diego Loyal proved that Charly could live beyond Mexico.”

Charly has an optimistic goal to become the No. 3 apparel brand in U.S. soccer in the next five years, among the likes of Nike and Adidas.

“There is a time and place for someone new to come in and be disruptive, and the USL is a great vehicle for us to do that,” Wells said.

Multiy­­ear Scale

Charly’s U.S. operations include a 500,000-square-foot distribution center in San Diego, where its domestic orders are fulfilled.

Its Irvine headquarters was established due to neighboring airports giving it easy access to the firm’s currently Leòn-based Mexican parent company, which is the official apparel partner of Mexico’s main soccer league, Liga MX, and also oversees six different Mexican pro soccer teams, including the nearby Club Tijuana Xolos.

Charly’s partnership with the USL officially starts in January, with new products anticipated to launch in March.

Charly will also start as the official partner for two teams, Oakland Roots and Soul SC, with another team to be announced next month.

Wells noted that many of the teams in USL are still under contract with other firms, which gives Charly the ability to scale within the USL over the next several years. Charly expects to have north of 12 soccer partners by 2025.

“Over 300,000 athletes could potentially be wearing our gear,” Wells said of the multiyear timeline.

Charly will continue distributing through its top-tier sporting goods, online and specialty channels with no plans to enter other big-box retailers. Wells noted that Charly’s in-store presence is the strongest among consumers.

“Brick and mortar is the greatest vehicle to give fans access to their teams,” he said.
Wells added that Charly’s job is now to elevate the future product line.

“People are looking for something fresh,” Wells said. “The USL partnership is a great opportunity to shock the market.”

The post Charly USA Kicks Off Soccer Partnership appeared first on Orange County Business Journal.

The apparel retailer reported third-quarter net sales of $167 million for the three months ended Oct 28., a 6.4% decrease compared to last year.  The average estimate of analysts was $168 million.

The company also forecast fourth-quarter sales of $172 million to $178 million with a loss of 12 to 20 cents. Analysts are predicting $175 million and an 11-cent loss.

“We continue to work towards protecting product margins, managing inventories and controlling operating expenses amid a continuing difficult economic environment,” Tilly’s Chief Executive Ed Thomas said in a statement.

After the announcement, shares dropped 5.7% to $7.80 apiece. Tilly’s shares have fallen around 15% since January with a current market cap of $248 million.

The post Tilly’s Shares Fall after Q3 Results appeared first on Orange County Business Journal.

Morales held the top role for the last five years helping the tactical apparel firm grow to $500 million in 12-month sales and open 124 retail stores in the U.S.

His successor is a current board member who first joined in 2019. Brown sports a 30-year career in the apparel industry and is currently the president of the North American division of Zumiez, a Washington-based retailer he was worked for the last 15 years.

Morales said that Brown’s “strong direct-to-consumer track record” with previous brands will help “accelerate 5.11’s transformation” in a statement. The founding executive will remain a significant shareholder in the company, according to officials.

5.11 was acquired by Compass Diversified (NYSE: CODI) for $401 million in 2017 with only three stores open and is now the largest of seven subsidiaries under the parent company.

The post 5.11 Tactical Names New CEO appeared first on Orange County Business Journal.

Klein was previously the apparel company’s chief marketing officer starting in 2017 and is also on the board of the Z Supply Foundation, which she will now oversee.

Before founding her own PR firm Shout Public Relations 26 years ago, Klein worked at 26Red as the marketing director and Orsi Public Relations as an account manager serving retailers such as Mossimo and Cherokee. Prior to that, the executive was the West Coast advertising sales manager at Sportswear International magazine.

The local retailer is still searching for a new chief marketing officer. It currently has around 81 companywide employees.

Z Supply is also laying out a restructuring plan to set both the brand and foundation up for “exponential growth,” according to officials.

The company is currently looking to add international distributors for the first time to its retail network of almost 2,800 U.S. boutiques.

The post Z Supply Appoints First-Ever Chief Communications Officer appeared first on Orange County Business Journal.

Kumekpor previously worked at Nike as global vice president and general manager of the Jordan brand division since 2019. He has also held leadership positions in the healthcare industry, at companies such as AstraZeneca, Alcon and Cigna, and worked as a financial analyst in the first several years of his career.

The company’s former CEO Kevin Wulff will retire Sept. 1 after entering the top role in 2016.

The vintage sports apparel retailer was acquired by Jacksonville-based Fanatics and other celebrity and high-profile investors in 2022 and has since grown its network of sports associations – Mitchell & Ness added a licensing deal with the National Hockey League (NHL) and expanded its catalogue with Major League Baseball (MLB).

“Eli will be focused on combining Mitchell & Ness’ momentum as a leading provider of high-quality vintage and lifestyle sports apparel, with the power of the larger Fanatics platform and network, creating new avenues for significant growth for the brand,” Joe Bozich, CEO of Fanatic’s merchandising division, said in a statement.

The post Mitchell & Ness Adds Nike Exec as CEO appeared first on Orange County Business Journal.

The Costa Mesa company’s logo was originally created by Bob Hurley over 40 years ago. Hurley is one of the co-founders of IPD, his latest surf apparel venture after establishing Billabong USA in 1982 and then running his namesake retail company Hurley International until 2019.

Before becoming an icon in the surf and apparel industry, he was a surfboard shaper in Costa Mesa. Hurley would stamp the IPD logo, which stands for International Pro Designs, on each board “as a stamp of approval,” or certification.

Soon the black and white label would become a symbol in Southern California’s surfing community.

“It was like a badge of honor” when living in Newport Beach, said IPD Surf Chief Executive Mark Simpson.

Orange County, often considered the birthplace of the surfing apparel industry, has spawned several companies that have gone on to worldwide fame, such as Vans, PacSun, Volcom and Quiksilver­.

Another one of those big industry names was Hurley, long based in Costa Mesa, which grew into a famous brand in the industry.

When Bob Hurley sold his namesake business to Nike in 2002—at the time doing around $70 million in revenue annually, according to reports—IPD was one piece of intellectual property he held onto.

“It’s a generational thing really—people that are a bit older remember it from back in the day and the kids now are looking at it like it’s something new,” IPD co-founder Bill Hurley, brother of Bob and one of several Hurley family members that are part of the company, told the Business Journal.

Simpson said the IPD team of longtime retail executives aim to build a fresh surf-centric business within the apparel industry.

The company’s product line includes a range of T-shirts, shorts, hats, wetsuits and other products.

Back to the Beach

The company was founded in 2020 by Bob and Bill Hurley, Simpson, Chief Financial Officer Erik Ingersoll and Chief Operating Officer Seth McKinney; they lead a team of 13 headquartered on Placentia Avenue and 19th Street in Costa Mesa. The company’s headquarters is a 1962 converted gas station.

The officials’ targeted market is independently owned specialty surf shops in surfing communities across the globe.

“It felt like the right time and place to take the big industry out of it and bring it back to more of a cultural movement,” Simpson said.

The team was able to bring IPD’s products to retail floors in 18 months and launched in June 2021 despite supply chain struggles resulting from the pandemic, according to Simpson.

“Which is pretty unbelievable to me and again, a testament to the team,” he added.

Simpson said IPD was created in an effort to swim away from the larger, corporate industry that was driven by private equity and had wandered away from the original consumer.

The owners wanted to create a space that was in full support of what they say is authentic, core surf retailers. A majority of the IPD team had grown up surfing and started their careers in local shops, according to Simpson.

“Throughout our business career, we have always maintained and support a connection to the core surf community; it’s who we are,” Bob Hurley said.

Bob Hurley had previously led his namesake brand for almost 20 years after leaving Billabong; Simpson and McKinney had exited Hurley after their own 20 to 25-year careers. Employees have also held roles in Nike.

“It’s an owner-operated business,” Bill Hurley said of the new venture. “It’s not somebody else driving.”

Reception

The team is split up between California and Hawaii, IPD’s two largest U.S. markets.

IPD has already released eight seasonal collections and, thanks to existing connections, has been delivered to nine countries. CFO Ingersoll noted that an instant network was available right at the inception of the firm.

The team reported an “overwhelming response” from prior retail partners and accounts that dated back to Simpson and McKinney’s early days with Hurley.

Current popular products include woven tops, boardshorts, and jackets with prices ranging from $26 to $130. The focus is the “print, fabric and fit,” VP of Product and Design Christopher Hurley, Bob’s nephew, noted.

The very first seasonal collection was released across 46 dealers out of a goal of 50, from California to Central America to South Korea. It now counts over 100 of these business accounts, according to Simpson.

IPD sells products in more than 130 doors through its North American dealers with a goal to reach 200 placements in the next 12 months.

IPD apparel has also been placed in 140 international doors, with Japan being the largest market overseas, according to Vice President of International Janet O’Connell.

“The surf shop culture, say, at Surf Side Sports in Costa Mesa down the street is not that different than the surfing culture at Heritage Surf and Sport in Margate, New Jersey, even though it’s on completely opposite coasts,” Simpson said.

“We want to keep the brand in the hands of surfers,” Ingersoll said.

Existing markets are seeing same-store sales in the double digits as of February, Ingersoll said. Currently, the team is looking to enter Australia.

Big Waves

A surfboard with one of the original IPD station from the 1980s sits in the company’s warehouse-turned-office, which lies across the street from Hurley’s original shaping room.

Choosing Costa Mesa for its headquarters was like returning “back to the roots,” Ingersoll said.

“This is sort of ground zero for the surf industry and the skate industry, [and] within a mile radius, there’s probably 15 or 20 brands that have started and located here,” Hurley said.
IPD, which doesn’t disclose revenue, does not expect to stay small in the long term.

“We’ve more than doubled our business in the last 12 months,” Ingersoll added. “We want to be a very large competitor in the surf space.”

In the future, IPD sees a possibility of growing into parallel markets based on other interests and hobbies of existing customers and athlete ambassadors outside of surfing such as skating. Arts and entertainment could also hold potential.

For McKinney, the success of the product all comes down to what the consumer brings to the register.

“That’s how the consumer really votes—they vote with taking up your piece of product to the register,” he said.

“And the register has been ringing for a lot of our partners.”

The post Surf Industry Icon Bob Hurley Rides Again appeared first on Orange County Business Journal.