Sullen Clothing Inc. doesn’t have broad brand recognition like Quiksilver or Billabong, but it does have legitimate standing among its core following of tattoo aficianados.
And founders Ryan Smith and Jeremy Hanna of the 14-year-old Los Alamitos clothing company, which began as just another action-sports startup, are fine with that.
The pair, both tattooed themselves, watched over the years as some of their peers swelled with big revenue gains or initial public offerings. They’ve nabbed big retail accounts and then lost some as trends changed. Throughout all of that, they’ve refined their focus on tattooing as the company made some of its most significant changes over the past year in operations, its juniors line, co-branded merchandise and international expansion.
The upside to focusing on what its larger peers call “core competencies” has been steady sales growth. Last year’s sales were up 7.5% on top of a 40% spike in 2012.
Sales, Growth
The company’s merchandise is in about 1,300 stores. The Business Journal estimates its annual sales to be less than $10 million.
Much of the growth stems from international expansion, particularly in Canada—the company’s No. 2 market after the U.S.—along with Colombia, Germany and Spain.
Sullen is now sold in about 30 countries, and international sales account for about 30% of the business, offsetting trends tied to fickle American shoppers.
“In the U.S., fashion changes fast here and especially when it comes to youth culture,” Smith said. “Right now, everything is all about street wear, and so you’re going to see sales slow in those traditional [retail] accounts because they’re going to Diamond Supply and [Irvine-based] LRG, and they’re not able to spend as much on you.”
The new retail accounts overseas, along with its core set of mom-and-pops and other smaller retailers, have canceled out the domestic slowdown, he said.
“A year ago, we were in a lot more of the chain stores in the mall,” Hanna said. “This year, we’re not in quite so many, but we’re making up for it in the core and most importantly the international because we’re still seeing growth.”
Sullen is also focused on partnerships with companies such as Craftsman for co-branded tattoo stations and Portland, Ore.-based Grenade Inc. for a snowboard collaboration that came out late last year, all with the idea of tapping new categories outside its clothing and accessories business with experts in those segments.
Distribution partners—third-party companies that apparel makers use to get their products in stores—such as Maryland-based tattoo supplier Painful Pleasures and Element Tattoo Supply Inc. of Garden Grove, have helped Sullen continue to make inroads in the tattoo community. That’s a point of distinction its founders say lends authenticity to the brand, and there’s no better place than Sullen’s headquarters to see that.
The company moved to the nearly 13,000-square-foot office in late 2011 from Huntington Beach, signing a three-year lease that about doubled the size of its headquarters.
A lobby store of Sullen merchandise greets visitors and leads out on one side to a gallery reserved for tattoo artists. There’s so much framed art in the office that it spills out into hallways. About a quarter of that art makes it onto the company’s shirts.
Links to the tattoo community have also helped the brand gain more mainstream successes, such as a credit on the “Tattoo Nation” documentary about the roots of black-and-gray tattooing. There’s also the relationship with Nevada-based Rockstar Inc.’s Rockstar Energy Drink, which tapped Sullen to co-present the annual Inked Up World Tour series of tattoo conventions. The most recent one ended late last year and included a contest in which 12 tattoo artists created wraps for Rockstar drink cans that fans voted on.
Juniors
The comarketing with Rockstar and other companies has helped the brand, especially as it expands its product lineup. Juniors is a good example.
The company brought on Marla Maxfield to head up juniors design, which was seen by the company as a key tactic to grow that side of the business.
Maxfield came on board about a year ago from Torrance apparel importer Design Lab Inc. and also worked at Irvine-based Split Apparel LLC and for Quiksilver Inc.’s Roxy brand in Huntington Beach.
Maxfield describes the juniors customer as “a little bit edgy in fashion, but she has tattoos. She’s a (tattoo) collector.”
Juniors now accounts for about 30% of Sullen’s business, compared to 15% about a year ago, Smith said.
The company has come a long way from its start in Smith and Hanna’s former apartment on 915 Alabama St. in Huntington Beach. But it hasn’t lost sight of those modest beginnings.
Sullen got its first line of credit about six months ago to purchase a cloud-based software system called RepSpark that allows retailers to order inventory in real time.
“I was raised to be frugal, and so I was very skittish about any kind of credit,” Smith said, “but then I realized that to bring however many thousands of units at once, we had to have a bigger back stock.”
The new software system is part of the company’s transition that began about a year ago from at-once ordering—purchases of in-stock products—to preordering, where orders are placed before a product is made.
All of the changes of the past year embody a company mantra Smith and Hanna have learned over the course of doing business: “Be good at one thing,” Smith said.
That mindset has allowed Sullen to ride the apparel business’ constantly shifting trends.
“For a brand like ours that’s small, you have to just be able to be comfortable with that and know that it’s like a heartbeat that goes up and down,” Smith said. “You have lots of large orders, low orders, in the middle. We were lucky to never really rely on the big business, so when the ebbs and flows do happen, we’re still growing.”
