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Manufacturing

How American Giant got buy-in from its supply chain before its customers

The company’s quest to manufacture a superior-quality hoodie in the US surprised everyone–even some of the vendors making it.
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American Giant

· 5 min read

One day about 10 years ago, Bryan Ashby, president of Carolina Cotton Works, a Gaffney, South Carolina, manufacturer that dyes and finishes fabrics, was on his computer.

“I’d recently hopped on and created myself a Twitter account just to see what this nonsense was about,” Ashby told us.

Being an American manufacturer, he searched for “Made in USA apparel.” And he discovered American Giant, a San Francisco-based DTC brand that was just getting started. American Giant was on a mission to make casual basics like hoodies and t-shirts, entirely in the US, with a priority of quality fabrics and construction over price.

Carolina Cotton Works had helped produce fabric for sweatshirts before, so he gave the company a ring. And it wasn’t long before Bayard Winthrop, founder and CEO of American Giant, flew to South Carolina to meet with the company.

Putting it all on the table

He brought a hoodie, which American Giant, at that early juncture, made from fabric sourced in India; Winthrop hadn’t yet found an American manufacturer who could make it to his specs.

“He put the hoodie on a conference room table and we were like, ‘Wow. This one is a lot different. This is not a sweatshirt that a screen printer is going to buy and sell to a high-school cheerleading team. This is a jacket. This is outerwear,’” Ashby recalled.

The cotton fabric was heavyweight and dense, the yarn fine. The zipper was metal, as were the grommets and the tips of the drawstring. There were reinforcement panels on the shoulders and elbows. And it was garment-washed to minimize shrinkage.

“I was like, ‘Man, I mean, do you understand that this is really expensive?’”

When Winthrop told him he did, and that’s why he was charging $79 for it, Ashby responded “‘I’m sorry, but you speak a language that we don’t comprehend. Nobody buys a sweatshirt” for $79.

Today, that same garment—dubbed “the greatest hoodie ever made” by Slate—costs $138, and American Giant is what Forbes called “the new Levi Strauss” and has what the Financial Times calls a “cult following.”

That hoodie’s fabric is dyed and finished—as it has been since not long after that meeting in that conference room—by Ashby’s company, Carolina Cotton Works.

“We were all in on American Giant,” Ashby said. “That was the first customer that I could remember that said, ‘I don’t want to do it the cheapest. I don’t want to compete with Fruit of the Loom. I don’t have to.’”

Been there, spun that

Supply-chain headaches went into migraine mode during the pandemic, and companies that once produced goods offshore increasingly are moving production to the US—if they can line up manufacturers and make the numbers work.

But Winthrop at American Giant isn’t scrambling because he assembled his supply chain a decade ago:

  • Much of the cotton for hoodies and other items comes from Latros Farms in Enfield, North Carolina, and is spun into yarn at Parkdale Mills plant, in Gaffney, South Carolina.
  • The yarn is woven into fabric at Clover Knits in Clover, South Carolina, then travels to Ashby’s Carolina Cotton Works back in Gaffney, where it’s dyed and finished.
  • Finally, the clothes are cut and sewn at Eagle Sportswear in Middlesex, North Carolina.

Winthrop said getting his supply chain set up took no small amount of cajoling—and trial and error.

When it came to that first sweatshirt, Winthrop approached some textile manufacturers and asked if they could meet his specs; they were “pretty dismissive” and told him it’s “not possible to do here anymore,” Winthrop told Retail Brew.

“That’s always the first and the second and the third answer,” he continued. “But by the time you dig into it more and get to the fourth or the fifth or the sixth answer, you tend to find out that, ‘Oh, actually, we can do this. We just have to kind of re-engineer this tool,’ or, ‘We’ve got to retrain this capability.’”

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Having its supply chain so squared away helped American Giant avoid problems other retailers have faced during the pandemic.

  • When supply-chain disruptions complicated holiday shopping last year, Winthrop emailed customers in November. “This will affect most clothing brands and is the result of supply chains they have built that crisscross the globe, chasing cheaper means of production,” he wrote. “At American Giant, we have chosen a different path.”
  • Fast Company reported that the American Giant grew 30% YoY in 2020 and 2021, but the brand declined to disclose financial information to Retail Brew.

One-way Street

Winthrop is an advocate for returning more manufacturing to the US, and as offshore supply chains have frayed, he said his advice about doing so has been solicited by major retail brands (although he didn’t name them).

But for those brands “to change to a domestic footprint—it’s difficult, to put it mildly,” he said, especially for publicly traded companies.

“The Street will kill you,” Winthrop said. “If [CEO] Chip Bergh and Levi’s decided to reshore and he gave up two points of the margin, the Street would tolerate that for, you know, a quarter.”

  • American Giant is privately held and its lead investor was former CEO of PepsiCo Donald Kendall, who died in 2020 at age 99.

Cottoning up

Ashby, at Carolina Cotton Works, declined to precisely describe what portion of his company’s business that American Giant represents, but did say it has had “a profound impact” on his company.

“Has our business grown? Yes,” Ashby said. “And do we have more customers buying fabric from us than we did 10 years ago? The answer is yes.”

And, as more brands try to figure out how to bring manufacturing jobs back to the US, the success of American Giant helps Ashby sell his plant’s capabilities to new customers, too.
“There has been sort of an evangelistic following of American Giant and it is a little bit of a coattail that we ride,” he said. “When we get in front of a retailer or…a brand sourcing manager, they always have heard of American Giant.”—AAN

from our sponsor

Automation is the answer 🙌. With persistent challenges around labor and supply-chain shortages, rampant inflation, and rising interest rates (just to name a few), automation is leading the way to reviving American industry. See how companies are powering automation with connected technologies in Insider’s article, sponsored by AT&T Business.

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