Engineering Success
Denim maker Red Engine builds momentum
James Boldes is pragmatic when it comes to his denim business. He has been building his Red Engine denim line slowly and quietly. But with the increasing recognition his brand has been getting at retail, he might not be able to avoid the buzz.
Red Engine shipped roughly 50,000 units during the first 26 weeks of the year and expects to see a 75 percent increase in Fall sales compared with last year, according to Boldes.
“We’re going through a little growth phase right now,” said the 47-year-old denim maker, who has a long history in the apparel business. “We’re booking a lot of stores, so we’re looking forward to a nice increase in business for Fall.”
It’s already been a steamy-hot year. Red Engine’s Spring sales reached $3 million— despite the Los Angeles–based company’s low profile in the denim market.
Boldes, who has spent more than 20 years in Southern California’s apparel industry, said he expects 2004 sales to approach the $10 million mark.
Supporting the label is a healthy roster of specialty-store accounts, including Fred Segal Santa Monica, E Street Denim Co. in Chicago, Rear Ends in Detroit, Jean Connection in Dallas, Abigail Morgan in San Francisco and InHouse in Hartford, Conn.
Customers can choose from a variety of basic denim styles, such as a low-rise jean with a contour waist, pinched knee and 22- inch flare; a fitted denim jacket with a threebutton cuff; and a low-rise army jean with cargo pockets. “Midnight Vintage,” “Black,” “10- Year-Aged” and “Frayed Blue Ice” are just a few novelty washes the collection offers.
Such cutting-edge looks helped Red Engine quietly break into the apparel scene in 1998, when Boldes managed to gather $300,000 in start-up funding.
“I didn’t set out to create a trendy denim collection—I wanted a better denim collection with a vintage feel,” he said.
Boldes strives to maintain his tidy profit margin without compromising his design. That’s where his market strategy comes into play. He said he is able to maximize his price points by moving his denim collections through specialty-store distribution channels, which tend to have fewer markdowns because they keep their inventories tight.
“I like the kind of loyalty that small retailers give to companies they support and believe in,” said Boldes, who, after a recent wave of success, opened his channels of distribution to include Nordstrom last year.
Boldes just wants to keep things simple and focus on building a basic denim line that offers trendy detail washes on high-quality fabric.
And he knows his denim. He spent a few years in retail sales before landing a job as production assistant at Guess? Inc. in Los Angeles in the mid-1980s. He got his first big break when the company reacquired its men’s denim license and made him responsible for putting it back on track.
A few years later, Guess promoted Boldes to senior vice president of operations, a position that gave him authority to plan production as well as have a creative hand in denim development.
Boldes followed his tenure at Guess? with brief stints as vice president of the denim divisions at Tommy Jeans Corp. and Mossimo Inc. He said his experience at those companies taught him how to keep production costs to a minimum and maintain a low overhead.
“I basically scaled down my production model to fit my small company,” he said. “I keep my overhead low, but I’m not frugal when it comes to choosing the right fabrics and washes for my line.”
Red Engine brings ring spun denim from Italy to Los Angeles, where a local contractor cuts, sews and washes the fabric. By producing domestically, Boldes, who is constantly involved in all aspects of the production process, is able to keep an eagle eye on quality control.
“It’s an advantage being close to production because otherwise I would never see the product until after it’s been packed and shipped,” he said. “And if there are mistakes, I can correct them immediately.”
The company, which keeps its fabric in stock so it can constantly replenish its inventory, has a four-week turnaround. In the basic denim business, it is important to keep a healthy inventory level of hot items for immediate refill orders, Boldes said.
Red Engine is a top seller, making up more than 20 percent of overall sales, at Detroit’s Rear Ends, a 20-year-old retailer that specializes in T-shirts and jeans.
“Red Engine has a fit for every body, which makes it a really nice product,” said coowner Elaine Blumenfeld. “Jim has a deep understanding of what quality denim is, and his washes are right on the mark.”
Retail store owner Shana Uthgenannt said the line has a 100 percent sell-through rate at her Hartford, Conn.–based boutique, InHouse.
“I don’t have to worry about my inventory levels by the end of the week because there’s usually another order on the way,” Uthgenannt said.
For Spring ’04, Boldes plans to add overdyed denim and twill pants to the mix.
However, one of his main concerns is just staying on top of his game.
“A lot of companies are adding denim to their collections because it’s a hot item right now, and that’s what’s causing a saturation in the market,” he explained. “I’m not doing it because it’s a trend—I’m doing it because that’s what I’ve been doing for 20 years and that’s what I know how to do. I’m going to be glad when the denim craze slows down and customers go back to the best-quality basics.”
