Pactimo

www.pactimo.com

Denver

Founded: 2003

Privately owned

Employees: about 140 (25 in Colorado)

Industry: Consumer & Lifestyle

Products: Cycling apparel

CEO Frank Kim is at the front of the pack with an industry-leading catalog of cycling jerseys, bibs, shorts, and outerwear.

Since launching the company has shipped roughly 2 million pieces of clothing for bicyclists, specializing in custom and team orders. Pactimo has even outfitted Olympians and professional athletes.

"We're a cycling apparel brand," says Kim. "We're focused on what has to do with apparel on the bike."

Pactimo's custom designs drives sales. "Thousands of teams and clubs across the country want to order something specific," says Kim. "Our promised lead time is probably one of the lowest if not the lowest in the industry. It's four weeks from when it goes into production to when it ends up your doorstep."

That's especially impressive considering the goods are produced at the company's facility in China. Kim notes that only one item, which was classified as luggage, is currently impacted by new tariffs.

Customers can also order directly from the company's catalog of stock products. Kim likens it to Zappos for cycling apparel. "You go online and order a jersey and its gets shipped in three to five days," he says. "That's being fulfilled out of Denver."

From the start, Kim says the company has been a digitally native, vertical brand. "We are the ones who are developing the product and at they same time we're selling to customers," he explains. "We do supply some stores around the country, but that's not our business at all. We are focused on being the best direct-to-consumer cycling apparel brand in the world. That's kind of our thing from the beginning to now, we've always been direct."

The strategy has also allowed the company to create strong relationships with customers. Notes Kim: "We have this incredible feedback loop from our customers. We work with thousands of customers every year and hear back from them every year. Whether it's the pro-level athlete to the guy who's very serious on a local team, we hear that feedback and incorporate that into the development process."

Pactimo has also waded into apparel triathlons, making clothing that can transition with the athletes. Since triathletes also run and swim, Pactimo's designs for them include durable water-repellent finishes and specialized chamois -- the seat pad in a pair of bike shorts. "It's a smaller profile, so that when they're running it doesn't chafe, but provides the protection they need on the bike," Kim explains.

"The chamois technology is one of the most important areas of cycling apparel. It's the most personal, it's the one you feel the most and it determines a lot about your experience on the bike," Kim attests. Instead of making their own chamois the company sources it from an Italian company that packs a lot of technology into a thin pad and tailors its product to Pactimo's specifications.

Kim credits the company structure he inherited, with well-oiled logistics and processes and proximity to Denver International Airport. "I think it's a phenomenal situation, because there's a lot of infrastructure when it comes to shipping and logistics near our location," he says. "There's a huge hub there and a lot of our business is drop-shipping product to our customers around the world. Having that transportation hub is really critical to what we do."

Adds Kim: "The labor pool is very deep and very skilled. We experience very little turnover on our manufacturing side. We've had people who are there for 10 years-plus with us. They've put a chamois in the right position thousands of times. There's probably no one in the world better at doing that than our team. The net result of that is we have almost no mistakes. Our defect rate is less on an annual basis is much less than 1 percent, which in the world of manufacturing is just crazy. We call it stupid low."

Looking ahead, Kim says Pactimo is likely to expand its mountain bike clothing lines and will continue to grow in the U.S. as well as Europe. "It's interesting to us to take on brands in what's sort of the homeland of competitive cycling and that's an exciting experience for us and we're making headway there," he says.

Challenges: "One is the normal challenge of the growth rate, inventory management, cash flow management and preserving the culture as we grow our team," Kim explains. The other is what he calls the "Amazon effect" on the retail industry, which could drive people to third-party platform, like Amazon or Backcountry.com rather than Pactimo for cycling apparel.

Opportunities: "When it comes to our market itself. I think we've got a lot of room for growth in the U.S. and Europe as a growth opportunity," Kim says.

He also notes that brick-and-mortar stores going out of business is an opportunity for growth. "That helps us because people need to go online. I think the fact that we're positioned in e-commerce and then the direct to consumer space provides the opportunities that lead to our future."

Needs: "Continuing to get better at the back-end stuff, making sure we do that in the most efficient and effective way possible," Kim says. "Ordering properly, managing that properly, making sure we're shipping in way that's timely, making sure we take care of customer questions and the relationship."