American Giant doubled down on local manufacturing during the pandemic

Many fashion brands believe it’s nearly impossible to manufacture their products in the U.S.—after all, only 3% of apparel sold in the country is made locally.

But Bayard Winthrop, American Giant’s CEO, says it’s not as hard as you might think. Since he launched the brand a decade ago, he’s been painstakingly building out a local supply chain, using American factories and sourcing all materials locally whenever possible, from cotton to zippers. And in the midst of the pandemic, when most brands were scrambling to stay afloat, American Giant took on the challenge of launching a new product category—high-performance outerwear—which required finding new factories and suppliers who could make them from start to finish.

When the global supply chain ground to a standstill and shipping costs skyrocketed, Winthrop’s efforts paid off. While many fashion executives anxiously waited to see if their collections would arrive in time for the holidays, American Giant had no trouble shipping products from factories to customers quickly. This domestic supply chain is part of the reason that the brand was able to grow its revenue upwards of 30% each year of the past two years, while many fashion brands struggled and some, like Ann Taylor, Brooks Brothers, and J.Crew went bankrupt.

Building A Local Supply Chain

Winthrop has been advocating for other apparel brands to join him in making products in the U.S. For years, his arguments seemed to fall on deaf ears. But the pandemic appears to be changing minds by exposing vulnerabilities in the global supply chain. “Big apparel has contorted itself around this enormously complicated and fragile supply chain to save pennies,” Winthrop says. “When a pandemic hits—or a tanker gets stuck in the Suez Canal—it disrupts everything. Brands are beginning to see that when your supply chain is domestic, you’re inoculated from all of that.”

Winthrop acknowledges that it’s not easy building a domestic supply chain, but it’s not impossible either. Over the past 40 years, American manufacturing has been shipped overseas to low-wage areas like China, Bangladesh, and Latin America. But before that, the country had a thriving clothing industry. In 1980, for instance, 70% of the clothes Americans bought were still made domestically. Since launching, Winthrop has focused on partnering with the remaining fabric suppliers and factories with apparel-making expertise. “Apparel brands say you can’t do this stuff here, but I challenge them to give me an example of that,” Winthrop says. “Once you pick up the phone and start exploring the network, you very quickly find that there are lots of suppliers out there.”

Take the brand’s first and most iconic product: the cotton hoodie. As Winthrop set out to create it, he spent time in the Carolinas, where he discovered that there are still many cotton-related businesses. He sourced cotton from Parkdale Mills, the largest domestic cotton buyer; milled it into durable fabric at Carolina Cotton Works; then tapped a small factory called Eagle Sportswear, where skilled workers sew the hoodies. As American Giant’s business has grown, expanding into T-shirts, leggings, and more, he’s helped these businesses grow: Eagle has had to double its workforce to more than 200 workers.

An All-American Jacket

Today, Winthrop is still obsessed with creating garments locally. In 2021, he set out to design and create a high performance jacket in the United States, even though the vast majority of outerwear is now made overseas because it requires extensive needlework—the most expensive part of the process. He went through his contacts and eventually discovered several apparel factories that make military uniforms and other garments adjacent to outerwear.

He settled on a small facility in Chicago that had the expertise he was looking for. The jacket, called the Blizzard, is indeed very labor intensive. It takes 23 people to produce the jacket from start to finish, from making the patterns to stuffing it with insulation. The sewing alone requires two hours per jacket, which means it takes about four weeks of sewing to make 200 Blizzard jackets, not including other aspects of the manufacturing process. Given the cost of labor involved, American Giant priced Blizzard at $348, which lands squarely in the middle of the market. The company sold thousands of jackets over the holidays, boosted by the promise that they would be delivered quickly, with no worries about supply chain holdups. It sells out and must be restocked regularly.

The Made in America Movement

As American Giant grows, Winthrop wants to expand into even more apparel categories. But he’s also intent on showing the rest of the industry that it’s possible to set up a supply chain from scratch, by mentoring other CEOs and introducing them to his network of suppliers and factories. And across the country, other brands are showing similar interest in local manufacturing. I recently reported about how designer Tracy Reese moved her headquarters from New York to Detroit, where there’s a growing apparel manufacturing hub; she now has a workshop and sample room where she manufactures a fifth of her collection and counting.

Three years ago, Morgan Hutchinson, founder of womenswear startup Buru, took the plunge to set up a small manufacturing facility in Downtown Los Angeles which she calls a “micro-factory,” staffed by a handful of workers. She started by making only 20% of her collection there, but during the pandemic she increased that to 50%. “I think the key to setting up a local supply chain is to just get started and start small,” Hutchinson says. “As we’ve grown, we’ve hired more people and bought more equipment, and by this year, we’re expecting to make 60% of our collection in our factory.”

Winthrop is encouraged by this shift in thinking and believes there’s more we can do to build a movement around local manufacturing. For one thing, companies can lobby the federal government to create incentives like tax breaks for brands that make products in the U.S. Retailers can commit to buying a portion of their clothes from American-made brands, like Walmart has done. And consumers can play a part in asking their favorite brands to consider making products here. “You can see the momentum beginning to build,” says Winthrop. “Brands are now taking the question of local manufacturing seriously and customers are beginning to demand it, because they want to buy from brands that align with their values. We’re at a very interesting time for the movement.”