The Little Denim

Company That Could:

Red Engine Jeans

By Richard Collings

Published: March 8, 2010

   Jim Boldes, a 30-year veteran of the denim industry who founded Red Engine a little over 10 years ago with his wife Kristen, states up front that his company is “a little guy,” but one that has made decent money over the years.

   Last year, Los Angeles-based Red Engine generated several million dollars in revenue and was profitable, Boldes said, selling mostly to independent boutiques across the country.

   “We’re a boutique-driven business,” Boldes said, not one that relies on department store wholesale accounts, and would like to maintain that business strategy.

   He said, however, that he could envision growing the company so that it is an attractive investment or acquisition, at which point, he could utilize much larger financial resources to build the brand even further.

   With millions behind him, Boldes believes he could drive Red Engine to become one of the larger players in the denim segment. Boldes continues to own 100 percent of the company, he added.

   Though 2009 turned out to be a horrible year for the clothing industry, Red Engine survived because it is run very tightly, and never built up a great deal of excess inventory that it had to liquidate to maintain cash flow, Boldes explained.

   It may also have helped that Red Engine has a loyal customer base due to the attributes of its product, such as fit and fabric. “They didn’t buy it because Jennifer Anniston had it on her butt one day,” Boldes exclaimed.

   He said that as of a few years ago there was a plethora of denim companies “slapping $300 on a bunch of crap.” But consumers are no longer spending frivolously and aren’t going to buy just because of the label, Boldes said, and in response there is better design, perhaps less flash.

   Just over the last couple of years a number of denim companies have gone out of business and the days when celebrities could bestow instant cult status upon a brand of jeans has faded.

   Though stores were not putting in orders in the fourth quarter of last year, they are replenishing inventories in the first quarter of this year, but Boldes said the customer hasn’t really returned yet despite the new orders.

   He also said that individual stores would probably not characterize sales as having fully rebounded, or say that “we’re out of this problem,” either. The stores are just smarter about how they manage their inventories and now buy differently.

   Boldes doesn’t expect customers to really return until the third quarter. Once the consumer does return, he said his company is well-positioned to expand, and is hoping for a sizeable increase in the second half of this year.

   Regardless, if sales for his company were to remain flat, it will still be a profitable year, worse case scenario, Boldes emphasized.

   Boldes said the company manufactures its premium denim product in Los Angeles, while it sources its denim fabric from Italian mills.

   There is always a level of manufacturing that can be accomplished domestically, Boldes asserted, and he has never sourced any of his production to places such as Mexico or Morocco as was the trend.

   He said it is still possible to produce a great pair of jeans without too much detail, or that isn’t overly intricate, in Los Angeles, and still believes it is worth paying the higher premium for Italian denim fabric.

   In the case of Italy, a great deal of its manufacturing was relocated to Turkey. “Italy moved over a border,” Boldes stated.

   But apparel manufacturing has always shifted from one country to the next, and not all clothing production will end up in China, Boldes said.

   Italy continues to have great denim mills, and those mills ask for more of a premium because of the quality, but Boldes still thinks it’s worth it. “I still think you can make a nice fabric in Italy and be competitive, but I don’t know when that will change,” Boldes said.

   The reason many denim companies will source their fabric from Japan, for example, is that Japanese producers acquired all the older looms, producing denim in the tradition of the early 1900s, which is considered to be more authentic.

   Evisu is an example of a company that continues to produce its denim fabric in the older tradition on ancient looms, hence why its jeans have a sturdier or stiffer feel, a rougher texture, Boldes said. Italy, though, continues to incorporate some of that approach.

   Boldes said he is now witnessing the biggest shifts in the denim segment due to the adoption of super-stretch fabrics, which has a different feel than previous denim fabrics.

   The super-stretch material may not only give consumers a new reason to buy another pair of jeans, after buying every wash possible in those pre-super-stretch days, but the fabric may also broaden the potential audience to larger-sized women, he said.

   Super-stretch, initially, was primarily used in leggings or versions of skinny jeans, but is now being applied to a much wider range of styles.

   When some larger sized women wanted to try on the super-stretch at the company’s booth at one of the trade shows, Boldes said he thought it would be a disaster, but the jeans held up nicely, and looked quite good, at which point he realized the fabric could bring in a much wider audience, and have a much broader application.

   Boldes didn’t realize the skinny in super-stretch could go beyond a certain body type, so he was pleasantly surprised.

   Super-stretch has ultimately helped the skinny jean more than any other body, as well as the straight leg. Even so, Boldes has yet to see a company effectively market what super-stretch is. “This is the kind of thing you really got to put on your body,” he concluded.

   Red Engine shipped its first product utilizing the super-stretch material more than a month ago and is studying how much traction it gains among customers.

   Years ago, stretch denim fabric didn’t look attractive, Boldes said, but even though the product is being test-marketed and denim companies are still figuring out the best cuts and designs, early consumer response is encouraging.

   In addition to using super-stretch, many denim companies are now producing non-denim items, that is, clothing in lighter weight materials, or in some cases knits, that can be confused with more traditional denim, Boldes said.

   The advantage for companies with denim roots shifting to what really are non-denim fabrics, is that consumers don’t know what they are buying, which is to say, the difference between a traditional denim fabric and a knit.

   Prior to starting up Red Engine in 1999, Jim was vice president of production at Guess and Kristen was a designer at the same company, when the public faces for the brand were Claudia Schiffer and then Anna Nicole Smith. Today, Red Engine’s offices sit across the street from Boldes’ previous employer.

   The inspiration for the company's name came from a hoard of antique firefighter posters and books Boldes came across, which expressed a feeling of vintage America he wanted to convey with his jeans.

   In Red Engine’s early years, the company utilized a number of those images Boldes had discovered in those posters and books to market the brand, rooted in vintage American style from the 1940s and 1950s. That midcentury sensibility was combined with contemporary fits and wash techniques that are both unique and cutting-edge.

   Boldes concluded that “boys want to be firefighters, and girls love firemen,” adding to the allure of the brand name. Red Engine continues its tradition of naming all of its styles in relation to the color red or fire, such as ‘Cayenne,’ ‘Scarlett,’ ‘Cinder,’ and ‘Siren,’ for example.

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