By Eric Smith

Two months ago, Francisco Morales was appointed CEO of tactical gear maker 5.11, a company he co-founded in 2003 while working for Royal Robbins and which was spun off a year later.

Now a subsidiary of Compass Diversified Holdings (CODI), Irvine, CA-based 5.11 is undergoing the laudable feat of expanding its brick-and-mortar presence in today’s increasingly online retail landscape. Though 5.11 didn’t launch company-owned retail stores until 2014, it is on pace to reach 50 by the end of 2018.

Morales, who had served as president before his appointment to CEO and has been actively involved in 5.11’s most ambitious 12-month projected retail expansion to date, said the brick-and-mortar boom is about meeting customer demands for browsing and buying tactical gear.

“5.11 is poised to take advantage of favorable market conditions, and our retail expansion provides a direct line to our customer base,” Morales told SGB in a recent email interview. “We see brick-and-mortar as an opportunity to communicate directly with our customers and build a community around the 5.11 Always Be Ready mindset.”

Morales formed the 5.11 brand when he was at Royal Robbins—5.11 being the term that describes the most difficult route possible in mountain climbing. The company, which has grown since its beginning, has surged in the marketplace after CODI bought the brand from private equity in 2016 for $401 million.

In the last quarter, CODI reported that 5.11’s year-to-date revenue had increased 7.8 percent, in line with expectations, although EBITDA decreased 29.9 percent compared to the same period. “Demand for the company’s products remains robust,” CODI partner Pat Maciariello said on the Q2 earnings conference call in early August. (CODI releases third-quarter earnings on October 31.)

5.11 is clearly focused on growing that demand. The company has been opening new retail locations at an impressive clip, each one giving 5.11 “an opportunity to support local efforts elevating our first responder and military communities,” Morales said. “We are taking the learnings from each of our store openings and evolving with constant improvement and focus on brand experience as we roll into the future. Most importantly, we are focused on our people—it’s our teams in the stores that we are committed to and who are committed to our brand.”

Here is the rest of what Morales shared with SGB about what’s driving 5.11’s brick-and-mortar growth, the explosion of the tactical sector and the importance of having a supportive parent company like CODI.

What is it about the 5.11 brand that lends itself to brick-and-mortar success? 5.11 products have a lot of functionality built into them and a lot of the technology; if you aren’t looking for it, is hidden. Additionally, many of our products are designed around solving problems, and they work together to improve operational challenges. Our retail stores act as experiential destinations—experiencing our products in-person gets the point across most effectively. 5.11 retail stores are the only place where consumers can experience the full breadth of our offering as a brand in a hands-on manner. Consumers also benefit from the valuable insight provided by our knowledgeable sales staff. Our retail store staff brings our products to life by being able to educate our consumers on the purpose-built products we design. We hire people who are passionate about our products—veterans, first responders, outdoor adventurers and tactical enthusiasts. They have the firsthand experience using our gear and have the ability to educate our consumers best. Over 40 percent of our retail team are current or veteran first responder or military.

Is the retail expansion coming at the expense of other channels and dealers, or is 5.11 taking an omnichannel approach and emphasizing a good mix of these for growing revenue? We are working to grow the whole ecosystem. It is a multi-channel, multi-product ecosystem where we have omnichannel drivers and positions. We are taking a more strategic approach to the partners we work with and products we place within those channels. For example, we have partners who are strong in apparel but not footwear and others who are strong in footwear but not packs and gear. We leverage our dealers to benefit them as much as their platform benefits us—they know their specialty, and we give them the opportunity to pull in the products they are the most successful in selling. At our company-owned retail stores, our sales staff provides expertise in all of our product areas, which is the real differentiator from other retail channels. We firmly believe our 5.11 retail stores benefit the tactical enthusiast community across all channels. Our ultimate goal is to get our product in the hands of our customer in the most efficient way possible.

Can your sales channels work to complement each other (buy online, pick up in store, etc.), and how does the company balance that? We are making big investments in infrastructure—this began last fall with our brand new 400,000-plus-square-foot distribution center in Manteca, CA, in addition to a new ERP implementation. The plan is that all of these systems work together and operate at the highest levels of efficiency. We are making significant investments in technology and people to grow the business to ultimately support an omnichannel experience in our retail stores.

How important is analytics for determining customer demands, and how is 5.11 using data to determine store numbers, locations, etc.? Whether its designing products or opening stores, we are always listening to the market. 5.11 meets the needs of our end consumer by listening to them—be it in the innovation in our products or where we open new stores. Through analytics and demographic research, along with our database of customers, we have mapped out opportunities across the United States. We see unparalleled demand for our product and believe there are many geographies in which we can serve our core customers.

How closely does 5.11 coordinate with CODI on the retail expansion? In what ways, if any, does the scale of a large parent company help with these moves? Tremendously. Compass leadership is present at our board level, and our board is a critical component of how we drive strategy and run the business at 5.11. Being part of a larger organization gives us access to internal expertise as well as external—much more so than we would if we were a standalone company. We have a much stronger board than other companies of our size with strong cross-functional representation of experiences. As an example, our new executive chairman, Matt Hyde, had 26 years of experience working at REI and most recently five years as CEO of West Marine. 5.11 having access to his experiences and expertise is incredibly valuable.

What’s driving demand for tactical gear right now? On the most mainstream level, tactical influence is leading in popular culture right now—trending in television, movies, video games, books, and podcasts. 5.11 benefits by being one of the few original and authentic players in this cultural gulfstream. The value proposition that tactical gear offers is what is making it so popular right now. In general, tactical gear tends to be more durable and more functional than other performance products in the market at a better value. Another micro trend is consumers wanting professional grade products—but not products that look overtly tactical. 5.11 is meeting that consumer demand by providing purpose-built gear that’s been tested on the front lines, but aesthetically designed for more of a mainstream consumer.

I’m hearing a lot about tactical gear—including some traditional outdoor brands either growing in that category or adding it—but what advantages does a core tactical brand like 5.11 have here? Our authenticity truly sets 5.11 apart. 5.11 comes from the tactical world as the original performance brand in the tactical space. We began making uniforms for government agencies, law enforcement, emergency services and fire departments and still continue to service those professional channels today. Having that heritage coupled with our passion for innovation through design and end-user testing really sets us apart from any new brand entering into this space.

Congrats on being appointed CEO. What has the journey been like in the past 15 years since founding the company, and what are your goals for the company moving forward? Fostering innovation, creating jobs and serving the greater good have been the most meaningful parts of my 5.11 journey thus far. The past 15 years, the company has reinvented itself as we’ve grown, and this has been a humbling learning experience. Being able to serve the people who protect us and to serve the greater good has been life-changing. The 5.11 brand and our products are enablers for people to feel that they can do and be more. There’s something amazing about making dependable gear for those who protect us and also seeing an outdoor or tactical consumer benefit from that same high-quality gear. I’m personally passionate about innovation and have had the opportunity to work alongside the design team to come up with problem-solving solutions—this part of my journey has been incredibly satisfying. Being surrounded by such an amazing group of talented individuals over the years has been an honor. I look forward to bringing 5.11 products to more people and continuing our growth.

I recently wrote about Royal Robbins the brand celebrating its 50th anniversary, and since you worked there for a few years, do you have any good Royal Robbins the man stories? By the time I got to Royal Robbins, Royal and Liz were not involved with the day-to-day of the business very much. My experiences with Royal were limited to a few meals. That said, his presence was always felt in the building—he had a real impact in the culture of the company and how products were created. Royal’s ‘can do’ attitude still resonates through our company today. While I didn’t have much personal interaction with him, Royal and his friends pioneered the outdoor industry, and we all recognize the impact he made in this space.

Photo courtesy 5.11


Eric Smith is Senior Business Editor at SGB Media. Reach him at or 303-578-7008. Follow on Twitter or connect on LinkedIn.