Nothing Ambiguous About Apparel Company’s Growth

By JENNIFER BELLANTONIO

Orange County Business Journal

Talk about due diligence.

When apparel industry veteran Don Kerkes was looking to invest in Irvine clothing upstart Ambiguous Industries, he turned to his teen-age daughter.

“She said, ‘Yeah, Dad, it’s the new hot brand,'” Kerkes recalled.

The clincher: a Christmas party put on by Ambiguous founder Frank Delgadillo at a local club. Early in the evening, 11- and 12-year-olds were hanging out. By 9 p.m., the place was jammed with hundreds of 20-somethings. Outside, a big line of people waited to get in.

“Twenty-five percent or more were wearing Ambiguous clothes,” Kerkes said. “They created this brand that 11- and 12-year-olds love, and 21 and above believe in, too. You have an opportunity to sell to a pretty big cross-section of kids.”

Kerkes, former sales vice president for the men’s division of Santa Monica-based Mossimo Inc., was sold. He joined Ambiguous in 1999, a move that marked a shift for the company Delgadillo founded in 1995 while he was studying pre-law at Chapman University.

“With Don’s expertise and our knowledge on how to keep the design concept authentic, it was the perfect match,” Delgadillo said. “That’s the downfall of most small companies. They don’t have the expertise.”

Abiguous remains small. Industry sources put sales in the range of $2 million to $5 million (though company officials say those figures are low), and there are only 15 employees.

But Ambiguous is hot. The company falls somewhere between big surfwear makers like Huntington Beach-based Quiksilver Inc. and more trendy designers such as Newport Beach-based Paul Frank Industries Inc.

Outlets grow

In six years, the number of stores offering its T-shirts, hats, jackets, jeans and other products has grown from 50 to 500. Along with domestic sales, the company also ships to Japan, Canada and, just recently, South America and Puerto Rico.

“Buyers are always looking for what’s next, and Ambiguous has been one of those ‘what’s next’ brands,” said Darin Dennee, publisher at Laguna Beach-based ASR Trade Expo.

Until now, Ambiguous has worked off word-of-mouth buzz from having rock bands like Alien Ant Farm and Black Eyed Peas sport the company’s clothes. But Seattle-based Foundation has been tapped to develop the company’s first marketing campaign.

“We anticipate to at least double our account base globally with our first-time launch of any kind of marketing campaign,” Delgadillo said.

The new ads, which appear in trade publications, are stark and feature just a white box and the company’s logo. Future ads are set to build on the theme. “We’ve taken this tack because it’s vague and unexplained,” said Peter Stocker, brand director at Foundation, which counts Tommy Bahama Sportswear and Union Bay, among others, as clients. “We’re going to let people read into it for a while.”

While starting Ambiguous, Delgadillo worked for his private investigator dad and for United Parcel Service Inc. He began the company from his Chapman dorm room. Delgadillo said he always had been into clothes, but he “didn’t have any clue on how to (design or make) anything.”

He said he learned tips from silk screeners and friends in the industry and eventually developed some hats and basic denim pants. There was no money to do labeling, so instead Delgadillo embroidered the bottom back of a pant leg with the word “Ambiguous,” a name he came up with while writing a legal paper.

“I needed a synonym for the word vague,” he said.

Raw beginning

Delgadillo and a helper, Gil Rivera, head of promotions and OC sales, went store to store showing the first line: hats, men’s T-shirts and denim pants. Instead of bringing a rack display, he said he carried everything in a box. “It was so raw and edgy,” he said.

Delgadillo got one of his first big orders from a Japanese company that had heard about Ambiguous through trade shows. The amount: $12,000. It stunned Delgadillo at the time.

“I had to borrow money from my parents to buy product and fabric (to fill the order),” he said chuckling. “The first year was slow and tedious, a lot of ups and downs. That’s kind of how it’s been. I didn’t even realize the growth.”

But the light went on, Delgadillo said, when he was getting more demand than he could supply. Soon, he was storing product in his dorm room and a storage facility near Chapman. Without knowing it, Delgadillo overcame one of his biggest fears, which was “getting product into the store and having it dive,” he said.

“What they did was the most difficult thing to do if you want to be part of the Orange County apparel scene,” Kerkes said. “It seems to me that most (upstart) companies don’t make it.”