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Apparel Firm Runs Full Speed Ahead as Triathlon Popularity Grows

BY MARION WEBB

It’s been 17 years since former professional triathlete Emilio De Soto sold his first clothing, 100 pairs of running shorts, out of the trunk of his car at triathlon racing events.

“I don’t know if they bought them because they really liked them or felt sorry for me,” recalled De Soto, president and chief executive officer of De Soto Sport, a designer of triathlon apparel and related products. He founded the Miramar-based company 18 years ago this month.

Whether or not his old racing buddies felt sorry for the ex-professional-turned-entrepreneur, next generation triathletes have endorsed his outfits, and his products have become a recognized brand name among athletes.

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The Cuban-born De Soto is now striving for similar success overseas. Three months ago, he formed De Soto Europe GmbH located near Frankfurt, Germany, to serve the rising numbers of swim-bike-run aficionados in Europe.

“We will sell De Soto products to retailers in time for the start of triathlon season in Germany, which is May,” said De Soto, who didn’t want to speculate on market share.

Though modest in size , the closely held company booked revenues of about $3 million in 2007, up $1 million from 2005 , De Soto reports steadily growing profits since 1990.

He and his 15 full-time employees design, test and manufacture some 250,000 to 350,000 products each year, all within his 6,000-square-foot building. Only a few products are outsourced for manufacturing.

That includes the De Soto T1 Wetsuit, the first two-piece, mass-produced wetsuit, which De Soto has made in China.

De Soto markets the garments as versatile clothing that can be worn to swim, bike and run without the need to change between activities. The garments as well as accessories are sold directly to consumers at the company Web site, www.desotosports.com. Online marketing to triathlete outfitters and retail specialty shops in the United States generates 85 percent of revenues; the remaining revenue comes from foreign sales, he said.


Expanding Customer Base

The rising number of newcomers to the sport in the past few years has certainly benefited soft goods makers like De Soto, said Tim Yount, senior vice president of marketing for USA Triathlon, the sport’s governing body.

“Our membership has grown 23 percent since 2005 (101,000 members as of December 2007) and that is just a microcosm of the sport,” Yount said. “There are more triathlon clubs, more charity-driven races and sprint-triathlon races than ever in the history of the sport.

Yount attributes De Soto’s success to his market niche. The combination of having been a pro, and subsequent successes racing through his 30s and 40s at a competitive level, helps the 47-year-old De Soto keep the pulse of the triathlon community.

His location in San Diego, the birthplace of triathlon and considered a multisport hub in the nation, makes him an informed and credible source among triathletes.

“Emilio keeps up with the pace of technology and battles companies that have much larger budgets on a daily basis,” Yount said.

Few competitors can rival his marketing prowess. De Soto said so himself.

“Others hire people who haven’t done triathlons and don’t know what a triathlete needs,” he said. “One thing that has been effective for me is to let people know the real triathlete behind the company, who is a person with passion willing to help you.”

Knowing that triathletes are always looking for insider tips, he frequently reaches out to them.

He’s been teaching a bike spin class at the La Jolla Sports Club facility for the past 10 years, monitors and contributes to dozens of triathlon-related forums on the Internet, answering such questions as how to repair a wetsuit and properly wash bike shoes and bike helmets.

For De Soto, good customer service is the same as “unlimited satisfaction.” Customers that don’t like a product get a replacement or a refund, guaranteed, he said.


Business Competition

When asked how many customers he serves, he answered with this question: “How many triathletes are there in the world?” He also isn’t worried about rival companies. That includes one of the largest triathlete outfitters, which is located nearby in the North County, Zoot Sports Inc. of Vista.

According to Zoot’s director of marketing, Elisette Carlson, the 22-employee strong apparel maker captures 40 percent of the market share, or three to four times more than De Soto Sport.

“Business tripled in the last two years,” Carlson said.

She wouldn’t disclose revenue figures, citing Zoot’s closely held status.

Yount said the rising popularity of multisport activities and proliferation of events has led the larger, better-known apparel makers, which have traditionally served bicyclists and runners, to muscle into the triathlon market.

He expects De Soto will continue to stand his ground against the big-budget firms.

“I don’t see competitors taking away his market share,” Yount said about De Soto. “He’s on the pulse of the sport and as long as he competes, goes to events and listens to the market, (he’ll do well). Big companies may have bigger budgets, but they are often stubborn and don’t listen to people. Emilio listens to what they have to say.”

De Soto said his goal was never to become the biggest clothing firm in triathlon. Rather he wanted to be seen as the Ferrari of triathlon apparel while becoming “extremely profitable.”

When it comes to competition, De Soto isn’t one to back down, either on or off the race course: “I love competition more than training and I’m obsessed with a business I love,” he said.


Marion Webb is a freelance writer based in Rancho Bernardo.

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