Jefferson Pedersen has taken a concept originally tested by NASA—color-changing technology—and helped develop it into a $42 million retail business. But the 31-year-old CEO gets his biggest reward in the delight that his merchandise—which changes color in the sunlight—brings to people of all ages.
“One of my favorite parts of this business is the smile that comes over a person’s face as they watch one of our products change color,” said Pedersen, president and CEO, Del Sol, Sandy, Utah. “I call it our ‘wow guarantee.’”
Del Sol was founded in 1994 (Pedersen’s brother-in-law was one of the co-founders) as a push-cart mall operation. When Pedersen joined, in 2000, it had five free-standing stores.
“I learned the retail side of things in St. Martin, running the Del Sol store there with my wife,” he said. “Later on, I came back to the States and was put over sales and marketing.”
Young, enthusiastic and highly energetic, Pedersen sensed the company’s potential and set about expanding its product line and retail portfolio. In 2003, he bought 25% of the business and took over as president (in 2006, he bought out the majority share).
Today, Del Sol operates 100 stores, half of which are located outside the United States, primarily in cruise-ship ports in the Caribbean and Mexico. Customers can also buy goods on its Web site.
President and CEO Del Sol Sandy, UtahAnnual sales: $42 million (est., 2007)Type of business: Manufacturer and marketer of color-changing productsNumber of stores: 100Areas of operation: United States, Mexico and the Caribbean
“Sunny tourist destinations are our main target,” Pederson said. “We are heavily promoted on cruise ships.”
Stores average 1,000 sq. ft. and sell privately branded apparel and accessories, from nail polish to board shorts and sweatshirts to sunglasses. The products change colors when exposed to sunlight (the colors change back once indoors). The average store transaction is around $40.
“About 50% of our sales are in apparel,” Pedersen said. “We print about 1.5 million shirts annually.”
Apart from 10 corporate-owned locations, Del Sol stores are independently owned. The company has exclusive arrangements with storeowners whereby they can sell only its products and the company, in turn, doesn’t sell to anyone else in the market.
Del Sol expects to open 20 to 25 stores in 2008 (airport locations are new to its real estate strategy). Plus, the company will unveil an interactive concept, Sol Kids, in three locations.
“We think the market can support 300-plus Sol Kids,” Pedersen added.
To date, all of Del Sol’s growth has been funded organically.
“We could grow a lot faster—I get about three to five calls a week from private-equity companies and venture capitalists wanting to invest,” Pedersen said. “But I think we’ve done things the smart way in not giving up any control. We may change that strategy, however, to grow Sol Kids.”
Pedersen credits the people in his organization to his success.
“People make your business,” he said. “Whenever I hire someone, I make sure of three things: first, that I can trust them; second, that they have a burning desire to succeed; and third, that I enjoy working with them.”