As a supplier of performance wear for some of the world's most demanding and competitive athletes - runners, cyclists, and triathloners - Pearl Izumi USA inherits a long tradition of innovation. The original Pearl Izumi ("Fountain of Pearls") company was founded nearly 60 years ago by a Tokyo man who designed the first bicycle-racing apparel in Japan for his son. His designs soon became popular among bicycle racers worldwide, and Pearl Izumi USA began distributing the line in the United States in 1981.
In 1989, Pearl Izumi USA acquired the brand license for the U.S. market and began designing its own performance wear; today, it distributes its products everywhere except in Asia. Based in Colorado and unrelated to the Japanese Pearl Izumi (since 2008, it has actually been a subsidiary of another Japanese sporting-goods firm, Shimano), Pearl Izumi USA has about 150 employees, 13 retail outlet stores in the United States, and offices in the United States and Europe. It sells most of its products through independent specialty stores.
Innovation for performance
Pearl Izumi's customers need clothing and footwear that is not only comfortable and long-lasting but that also contributes to their athletic success. The company's research and development efforts focus on solving specific problems that customers face. New high-tech fabrics are developed to help cyclists regulate their temperature - for example, by holding moisture better or by reflecting ultraviolet rays - and reduce total weight. Pads are constantly redesigned to reduce pressure and chafing. Patterns are adjusted to make garments more aerodynamic in air and, for triathloners, in water as well. Cycling shoes are engineered to deliver more power to the pedal.
While Pearl Izumi maintains sophisticated research labs outfitted with wind tunnels and water tanks, customers do
some of the most important testing. As a sponsor of Team Garmin-Slipstream, the ProTour cycling team dedicated to ethical sporting, the company has access to a group of professional riders for testing its cycling line; these team members provide constant feedback about how the products perform in real-world competitions.
Nonprofessionals also join the wear-testing program and report on their experiences. Items returned by customers also generate a wealth of information. "We also get wear testers out of that - people who are good at destroying things," says Tiffany Howell, senior product development manager.
Managing for efficiency and quality
Since joining Shimano, Pearl Izumi has upgraded its systems to support this continual development and testing process. Most critical was the product lifecycle management (PLM) system from Yunique Solutions, which has made development more efficient and accurate. According to Howell, because product development data is now kept in an integrated database instead of a multitude of spreadsheets, enterprise-level reporting has become possible and international collaboration has become much easier. The company is currently implementing an ERP solution, which Howell expects will introduce more efficiencies.
After five years of double-digit growth rates, Pearl Izumi is now the leading cycling apparel company in the United States and is a well-known though smaller brand in Europe. "Everyone in the cycling world knows us as a stable and reliable brand," Howell says.
Though revenues are down this year, they have fallen less than expected and the company is hiring new staff. One reason the economic downturn has left Pearl Izumi relatively unscathed is that 2008's gas price increases inspired more people to begin bicycling and running - and they didn't revert to driving even when gas prices fell again. Cities are adding bike lanes, and the increased focus on health and the environment has renewed interest in sports.
"People are not buying as many new things this year, but there are more riders," Howell says. In addition, retailers have continued to support the brand, not only because its products are high quality but because Pearl Izumi helps them optimize their product assortment and inventory levels - critical functions for small retailers.
"Our vision is, despite a bumpy year, to keep doing what's right for the product," Howell says. "We don't want a decline in product quality because of the economic situation. That [commitment] is pushed down all the way from top management."
A culture of empowerment
The company culture also emphasizes open communication and empowerment. The organization is relatively flat, and employees have access to a great deal of information. Employees are encouraged to think like owners - becoming familiar with the company's financial position and goals, suggesting solutions that will help the company as a whole, and even raising a red flag if they have concerns about the direction the company is taking or if they believe risks are being ignored.
The company's president, Juergen Eckmann, is an ex-racer and many employees are serious athletes. At the company's Colorado headquarters, anywhere from 10 to 30 employees go cycling together at lunchtime every day; others are avid runners or walkers. The quality of the products and the success of the company are matters of personal importance to employees.
This commitment also informs the company's support of its community. The executive committee reviews the many requests for sponsorship or assistance and decides whether and how to support them, usually on the basis of their relation to the company's activities.
In addition to sponsoring the Garmin-Slipstream team, Pearl Izumi also supports many individual athletes and teams. As well, the company contributes to related causes such as the Conservation Alliance, the International Mountain Bicycling Association, Bikes Belong, and the Davis Finney Foundation. Some of the contributions are monetary, while others come in the form of employee time - Pearl Izumi staffers volunteer to take children out riding and go out on weekends to help clean up roads.
"What we promote, we try to live here as well," Howell says.
Masha Zager is a New York-based Apparel contributing writer who specializes in business and technology.
Pearl Izumi is a leader in recycling. It has stopped printing a paper catalog and even reuses the cartons it receives.
Standing Behind the Product
Every product made by Pearl Izumi carries a lifetime guarantee.
Privately owned until 2005, Pearl Izumi was acquired by Nautilus for $74 million in 2005 and by Shimano American for $69 million in 2008. It is still managed as a stand-alone company.