Keeping Pace With Denim Demand and Design

Denim North America looks to the future with a nod to denim’s roots.

by Alison A. Nieder

A call to Denim North America’s headquarters in Columbus, Ga., yields an automated voicemail system that quickly dispenses with the usual departments—shipping, customer service and accounts payable—and heads right to the technical directory: weave room, finishing and picks, beaming, warping and dyeing, and product and market development.

The company has operated largely under the radar since opening in 2002 on the grounds of a former Marubeni factory. But now, as one of the two remaining denim mills in the United States, Denim North America (DNA) is raising its visibility a bit. In early March, the company exhibited at its first trade show, the Kingpins boutique denim sourcing show in Los Angeles. DNA has operated a Los Angeles office since the company was founded, and the company was already familiar with many of the attendees at Kingpins. Still, results were encouraging, and the company plans to attend the next Kingpins show, set for July in New York.

DNA—which also operates offices in New York, San Francisco and Mexico City—was founded in the wake of the economic downturn of 2001, at a time when many U.S. textile companies were closing shop or looking abroad for new business opportunities. DNA’s ability to survive—and thrive—during that downturn bodes well for the company’s success in navigating the current crisis. DNA President Monte Galbraith, an affable man with a fondness for textile puns, conceded that the current economy bears little resemblance to the 2001–2002 slowdown. Still, the company’s founding years helped shape the strategy for the current economic climate. DNA saw the indications of a slowdown and began preparing in advance, trimming inventory and developing new products.

“We come from that mindset of what doesn’t kill you makes you stronger,” Galbraith said.

California Apparel News Executive Editor Alison A. Nieder recently caught up with Galbraith to discuss the company, its plans for the future and how California fits into its goals. 

How does California fit into Denim North America’s business strategy?

You can hardly say “denim” without saying “California.” The terms are—if you pardon the pun—interwoven.

Our L.A. office is the nerve center to keep us posted on what’s happening in the industry.

California has always been an important part of our plan simply because so many important denim brands—large, small and emerging—originated there. California has a very high level of denim sensibility. Denim jeans started in California, and many of the very best ideas for denim innovation still originate in California. Frankly, when most of the world thinks of California, they think of cool blue jeans, great cars and pretty girls. It doesn’t get much better than that. California and denim go hand in hand.

I still say the best ideas come out of California. [All the designers] do their annual [buying trips]—what I call the “globe trot.” They’ll tell me the best stuff they find is in L.A.

With several notable exceptions—such as Levi’s, Guess, Gap and Seven For All Mankind—many West Coast denim makers are small- to mid-sized companies. Is DNA able to cater to the smaller players as well as the large companies?

In our business plan, we plan to do 20 million to 21 million yards per year. That’s a lot of denim. You’ve got to deal with the larger people, but we have a flexible manufacturing facility and we try to find a way to work with companies. We try as best we can to support smaller brands because we have a soft spot for growing and innovative companies that are paddling hard against the current.

However, we cannot be all things to all people, and we have to make tough choices and turn down orders that do not make good business sense in either the long- or short-term view. That said, we are always listening and watching for the next great trend and idea, so we try to stay in contact with as many new designers as possible. You never know when one might hit on a great new idea.

The company was founded during an economic downturn. How does the current economic climate compare, and how is the company positioning itself to succeed?

Denim North America was founded in May of 2002, so we have been building our business now for seven years.

We learned a lot of things that will help us weather this storm. We can be very aggressive on the one hand and very conservative on inventory management. Inventory has always been the key. You’ve got to watch every penny. Inventory is cash. I always say we’re really in the cash-management business—we just happen to make textiles.

We probably have the best cost-control systems in the industry as well as an incredibly well-engineered and flexible manufacturing setup. Our focus is on product innovation and customer intimacy. We spend a lot of time with strategic accounts, developing customized products that fit their objectives for each new season as well as independently developing ideas gleaned from emerging trends. This is an ongoing process. Innovation, cost control, manufacturing excellence and customer intimacy make up the cornerstones of our business.

There are some who believe we’ve seen the end of the premium-denim boom—and others who are banking on resurgence, possibly at a lower price point. Where do you see the denim market heading?

I don’t know if anyone really has an answer to that.

I think there is a sag in ultra-premium-denim expectations. In this environment, who isn’t thinking about what they need vs. what they want? That said, I truly believe that a new pair of great-looking and great-fitting blue jeans is the one garment that is so universally loved that great jeans will always sell even though “premium” might be at a somewhat lower price point than in the last few years. Lets face it, $300 to $400 jeans did not make much sense when times were “good.” They really don’t make sense now that times are tough.

However, there will be continued demand for premium/better jeans when the economy does start to pick back up. I think a great pair of new “premium” jeans will be on a lot of people’s radar screen this year—and many more to come.

I really believe that for great jeans—let’s say [retail priced between] $90 to the high $100s—there will always be a demand. I think people are re-evaluating what they’re spending. You can focus on better blue jeans—it’s still premium, just not uber-premium. Keep the focus on fit and finish. You can spend $5 to $6 on fabric and be very successful.

If there’s one piece of clothing you can buy and be emotionally attached to, it’s blue jeans.

Tell me about the Heritage Collection.

Denim is an iconic fabric, and Heritage was a nod to the past, a nod to the kind of fabrics worn by the miners and sailors 100 years ago. There is not another garment more associated with the United States than blue jeans.

Other countries have picked up on denim over the years and have developed their own versions. Over the years, there has developed a myth that only denim from overseas has better quality. The fact of the matter is that fabric from overseas is only more expensive. They have done a great job marketing their products, and my hat is off to them.

Heritage was a marketing tool to remind people where it came from, how it’s woven into our lives, if you will. 

For information about DNA, call Daryl Mead, senior account manager in the Los Angeles office, or visit www.denimna.com.

http://www.apparelnews.net/features/profiles_qa/Keeping-Pace-With-Denim-Demand-and-Design

Denim North America Debuts Heritage Collection

Columbus, Ga.-based fabric manufacturer Denim North America has launched the Heritage Collection, a line of denim that is reminiscent of the denim worn by American miners, sailors, ranchers and craftsmen in the late 19th and early 20th centuries, when pure indigo was rope-dyed onto ring-spun yarn. The new line is being manufactured in Columbus.

Denim North America is celebrating the launch by distributing limited edition, handcrafted, leather-bound wooden boxes containing fabric cuttings and a scroll timeline marking significant dates in denim’s origins and development.

http://www.textileworld.com/Articles/2008/November_2008/News/Denim_North_America_Debuts_Heritage_Collection.html

Jeans Therapy

How Georgia-based DNA came up with a miraculous cure for the ailing denim business

BY HOPE WINSBOROUGH

COLUMBUS, GA — While most of the American denim market is singin’ the blues, three-year-old Denim North America produces between 85,000 and 100,000 yards a day – about 24 million yards annually – for jeans brands such as Levi Strauss, Gap, Lee, Wrangler, Abercrombie & Fitch, Michael Kors and Marc Jacobs.

And business is getting better all the time.

Focusing on the needs of the profitable upper tier of the jeans market, DNA’s creative and merchandising director Lisa Harris spearheaded a marketing strategy that stresses both authenticity and inspiration. (Case in point: The company’s bison logo, which she invented to play up its American legacy.)

Enlisting the help of “denim masters” Tom Butler, Paul Patterson, Andy Buchman, and Gerald McCrory (warp/beam, dye, weave and Sanforizing specialists, respectively), she developed a hands-on approach to client collaboration, dubbed the “Denim Development Café,” which involves clients in product development and –not coincidentally-highlights DNA’s high-tech capabilities and directional flexibility.

The goal is making each client a full-fledged design partner, Harris explains, and making each yard of denim as specific to its market as possible. Because today’s buy-now, wear-now marketplace means clients need concepts that can be released throughout the year, Harris works continually- along with the “masters”-to develop and redevelop new product.

In fact, everyone is involved every step of the way. The company has an active sales staff with offices in New York, San Francisco and Mexico City, and vice-president Monte Galbraith explains, “Contracts are so complicated that every member of the sales team works on deals. A decision made in New York, for example, might be mostly influenced by [people in] San Francisco."

In turn, the plant keeps the customers happy because DNA builds in elaborate quality controls at every point in manufacturing: from yarn strength to shrinkage to pre- and post-wash shading.

DNA’s state-of-the-art 260,000-square-foot plant here first opened in 1998 as Marubeni Denim & Swift Spinning, owned by Japan’s Marubeni Corp. (ranked number 12 on Fortune’s Global 500). Three years later, at the rock bottom of 2001’s economic downturn, Marubeni announced plans to shut down the $85 million operation. “At that point, this community had already assumed as much loss as it could take,” says Galbraith, who saw a silver lining in the news.

In Galbraith’s view, the hard part had already been done: The plant was up and running; its technology was unparalleled; and its (nonunion) employees were committed to keeping their jobs. If the 2001 downturn could be weathered, he felt, the U.S. denim market would bounce back.

Today, he remembers first mentioning buying out Marubeni during lunch with his father, a retired textile executive, who replied that Monte was “nuts!”

But it didn’t take long for Larry Galbraith to be worn down by his salesman son. Now president and chief executive officer, the elder Galbraith ultimately agreed and, with little time to spare, rounded up a small group of savvy backers, including director Bob Koon, a veteran of the American textile business.

While there were other competitive bids, theirs was the one favored by Marubeni, which was operating according to the Japanese management perspective that it was important to “leave the nest “in good condition.

After a relatively smooth transition period, the company has managed to exceed even its own sales projections. Profitability is enhanced by DNA’s low debt-to-equity ratio. Beyond that, says Monte Galbraith (whose brother Todd joined the firm as chief financial officer), “We’re obsessive with costs. We do everything we can to keep them down-from turning out the bathroom lights to being sure to squeeze every penny out of the process.

“Our advantages are incremental yet competitive,” he explains. He cites the company’s proximity to Central and South America as being crucial when it comes to time-sensitive fashion: “It’s true the world is shrinking, but location matters-because speed is an issue.” Orders done from scratch (requiring new dye or yarn sizes) average a turnaround of four weeks. Two weeks, if the materials are in stock.

But in terms of beating the competition, the biggest advantages are quality and service, which Galbraith sees as driven by passion for the product: “If you compete strictly on price, there’s not much of a chance. But you can be competitive based on a lot of things that customers also want.”

The way I see it, denim is a fundamentally American product that's become a worldwide phenomenon. And there's a reason for that, according to Galbraith. "The best denim is made in the U.S.," he says. "No one does any better than we do."