American Giant CEO on the state of ‘Made in USA’

Since a 2018 New York Times story first chronicled American Giant CEO Bayard Winthrop’s odyssey to bring back flannel manufacturing to the US, a lot of things have changed.

There has been a worldwide pandemic that has disrupted the global supply chain, inflation and recession have entered the picture, and generally, things seem to be pretty expensive.

But if there is one thing that has stayed the same, it’s Winthrop’s resolve to strengthen US-based manufacturing since founding his brand, which has become somewhat of a poster child for the “Made in America” movement.

The genesis for all of this, however, is based in one single moment which came after the CEO became a first-time father 13 years ago—a week after which he was fired from a manufacturing company where the owner wanted to move production overseas.

“It was almost Christmas, my daughter was two weeks old, and that was a stressful moment,” Winthrop told Retail Brew. “It got me really thinking about what I wanted to do next. That idea about [a] business that was making things domestically of really high quality, as the foundation of a business—I couldn’t let go of that idea.”

Out of it came American Giant, which is now known for its sturdy US-made denim, hoodies, and of course, more recently, flannels.

The original NYT piece—alongside an upcoming book titled American Flannel by the original author of the article, Steven Kurutz—encapsulates the painstaking effort and time that went into creating flannels within the US, from putting together scattered pieces of the supply chain to finding a company to dye the yarn; weave the flannel; finish and nap it; and finally, cut and sew the fabric into shirts.

Trade in America: Fast forward about six years, and Winthrop said the industry is slowly building up its production capacity while a number of major retailers still rely on giant manufacturing centers in India or China.

“In the US, as the robustness of the textile industry left, that ability to take an order and convert that into a fabric completed shipment has disappeared, essentially,” he explained, adding that American Giant had made a sort of “immovable commitment” to manufacturing in the US.

“There is a lot of inefficiency, which ends up driving up costs a lot,” he said. “The good news is if a retailer said, ‘We’re going to commit to making 50,000 flannel units domestically,’ and begin to provide that consistent volume over these facilities over time, you can rebuild that capability…In our case, we don’t have that luxury, though, little by little as the volume is going domestically, you’re seeing that come together on the backs of American Giant and a few other players that are beginning to wade into the water.”

That rising capability also means that the production and process costs are coming down to an extent. Still, it’s a work in progress.

The pandemic was also a catalyst in helping retailers realize gaps in the global supply chain system, which “was totally optimized around the cheapest possible means of production that we could find no matter what, is actually quite fragile,” Winthrop said. “That really changed, because it hit the P&L of a lot of brands, and forced them to begin to say, ‘We need to have some elasticity in our approach capabilities that includes more hemisphere and more domestic production.’”

Winthrop said the next challenge is to find a large retailer to commit to domestic manufacturing with American Giant.

“You need to start to see the big retailers take a stand on the importance of an American-based line, because they’ve got to get into the fight, and they’ve got to get off the sidelines,” he said.