How American Giant managed to make a US-made $12.98 T-shirt for Walmart

It’s part of Walmart’s vow to spend $350 billion on products made or assembled in the US.
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American Giant

4 min read

American Giant started in 2011 with a quixotic mission: to make high-quality clothing in the US even though, by its own estimate, 98% of clothing production by US brands had been sent overseas at that time.

By many measures, it has fulfilled that mission. Its flagship product, a hoodie, was declared “the greatest hoodie ever made” by Slate in 2012, and it now has a broad product line, including shirts, jeans, dresses, and outerwear.

However, manufacturing clothing from American-grown cotton at US facilities is, needless to say, more expensive than doing so offshore, and today that original hoodie—100% cotton, heavyweight, and with a metal zipper and grommets—retails for $138. Its cotton T-shirts retail for between $40 and $60.

American Giant founder and CEO Bayard Winthrop makes no apologies for the brand’s prices, but he does acknowledge they’re not in everyone’s budget.

“I’m realistic about how that [pricing] limits the number of people that can participate in high-quality, American-made stuff,” Winthrop told Retail Brew. “That’s a bummer. If you’ve been, like me, on this mission for 12 years, you feel like, ‘Shit, we can’t even sell it to the men and women who are making our product.’ That just doesn’t feel good.”

But now, in what at first blush may seem like the winner of Retail’s Strangest Bedfellows contest, American Giant, known for steep prices, is partnering with Walmart, whose motto is “Every Day Low Prices.”

American Giant is making a line of 100% cotton US-made T-shirts for Walmart that will retail for $12.98. They’ll be available at 1,700 stores across the country, and the styles they’re launching with have a decidedly patriotic appeal, with shirts in red, white, and blue (plus gray) and “American Made” emblazoned on the front.

And what brought these unlikely partners together?

A podcast.

Worn in the USA: In February 2023, Winthrop was a guest on The Way I Heard It podcast hosted by Mike Rowe, the creator and host of Discovery Channel’s Dirty Jobs.

Rowe mentioned Walmart’s commitment to spend $350 billion on products made (or assembled) in the US over the next decade, and Winthrop jumped in.

“Nobody is saying that Walmart is a perfect operator,” Winthrop said on the podcast. “But if we’re going to pursue a better tomorrow, we need to recognize when there are people that are willing to make commitments to change behaviors, and boy, that’s a clear one.”

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The podcast “made the rounds at Walmart, unbeknownst to me,” Winthrop told us. Soon he heard from a Walmart executive who invited him to the company’s Bentonville, Arkansas, headquarters. What Winthrop said began as a general conversation about the challenge Walmart faced finding American-made textiles led to whether American Giant could produce something at a Walmart-friendly price point.

Winthrop was interested, but dubious about making a T-shirt that inexpensive domestically.

“If you’d asked me a year ago, ‘Hey, could you get a T-shirt retailing at Walmart for $12.98? I would have said, ‘No way. Maybe we can do $20, but no way can we do $12.98.’”

The price is tight: While there’s economy of scale to help bring manufacturing costs down, Winthrop explained that as important was a longer-term commitment from Walmart to sell his products. When American Giant could assure its supply-chain partners that Walmart’s demand was for the long haul, that spurred them to invest in their facilities to make them more productive and efficient, he said.

“If Walmart had come to us and said, ‘Listen, we’re going to give you a million-unit order and deliver it all in three months, and then we’ll see what happens from there,’” Winthrop began, it wouldn’t spur investment from his supply chain because “people are reluctant to invest past that moment.”

The T-shirts American Giant is making exclusively for Walmart will differ from those selling for three or four times as much on its website. They’re still 100% cotton from US farms but made with less expensive yarns and less labor-intensive knitting and sewing processes.

But Winthrop insists he cut costs without cutting corners.

“As I thought about a partnership with Walmart, the first, second, third, and fourth thing I thought about was, ‘We spent 12 years building a reputation for making the best-quality stuff in the market,’” Winthrop said. “We better be damn sure we’re putting out a product not only that we can stand behind, but stand behind in a full-throated way, and we’re just totally proud of the product.”

Retail news that keeps industry pros in the know

Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.