Pearl Izumi signs on to SaaS

Nearly eight years ago Pearl Izumi Inc., the high-end apparel maker for cyclists and runners in Louisville, Colo., shut down its custom clothing business because it was not hitting profit targets. Today, new services available online are making it possible for the company to revive a proven revenue-generating business, only this time with the expectation that the profit margins are in line with corporate strategy.

Mike Regan, business manager for personalized gear at Pearl Izumi, says before getting axed in 2001, the custom clothing unit brought in $12-15 million annually. But the overhead in labor and technology for the necessary sales processes was "too cumbersome," he says.

The business cried out for automation to get a handle on the complexity, Regan recalls. But it would not have been possible without a huge IT investment at the time.

According to Regan, to make the high-end customization business unit a success he needs online services that are "highly knucklehead resistant." He describes his market as comprised of users, largely bike shop owners, lacking deep computer technical skills and are short on patience.

"I wanted the lowest common denominator for customers," he says.

And he thinks he's found it for the sales process in two services, one Box.net Inc. in Palo Alto, Calif. and EchoSign Inc., also in Palo Alto. With the former service, Pearl Izumi's customers can collaborate with apparel sales and design staff to create everything from the garment's fabric and features to quantities and prices. Then EchoSign attaches the output from Box.net in a drop-dead-simple signature-processing service.

Regan predicts it will only take a few miniutes for his customers to learn how to make and close custom-apparel orders.

"It couldn't be simpler," he says.

Pearl Izumi plans to launch the custom gear business at the InterBike conference in September. And while Regan also faces other challenges before then, such as finding skilled seamstresses for the custom business, I find it insightful that the company is returning to a failed, but proven business and is now ready to give it another chance because SaaS has automated, in this case, sales process just enough to make that old business new again.

It seems the smartest companies are not just looking forward to find new ways to make money. With the right SaaS partners, they can look backwards, too.