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Guest Host: John Donvan
What does it mean to be made in America?
San Francisco-based clothier American Giant sells apparel for men and women, all manufactured in the U.S. It’s not cheap. The company’s popular hoodie retails at around $90. So, is it worth it to be American-made?
We talk with American Giant CEO Bayard Winthrop about why he focuses on more than the bottom line in his business.
- Bayard Winthrop Founder and CEO, American Giant, an online apparel company with a mission to manufacture clothes in America
Why make a hoodie?
I was really fascinated by the fact that it was one of the great, iconic, American silouettes, maybe after the blue jean. And that unlike the blue jean, there was nobody that really was owning the best sweatshirt on the market. And that was an interesting thing to me. And I grew up around Champion and Russell and all those great brands, but there was nobody in the market that was that to me, now. I think there is such a fundamental transformation happening right now. Kind of in America at large. Massive disruption in the workforce, changing industries. And I always was interested in outfitting the people that are trying to navigate that transition, whether that’s sort of figuring out a way to be productive in keeping a viable job, or whether it’s protesting about an issue you care about. But the idea of the uniform of that transition, the people that are sort of in the pursuit, was always interesting to me. And I felt that the hoodie was really a good example of that.
Why is it important to manufacture American Giant products in America?
I think one, ’cause I can. I can do it profitably and well, and I can stay on top of the quality much better than I could if I was making it overseas. There’s just a geographic proximity issue that makes quality control and response time better. I spend a lot of my time in the Carolinas, in our factories, and talking to and working with the people that are sewing our products. And the other is that I think that customers want it. And those are pretty powerful dynamics. I think that we can, we can drive great quality, and I think the consumer out there is saying really clearly, “We want a brand that is making a difference and standing for something in the American-made category.”
How do you compete with big box stores and large retailers?
I think the answer really lies in a brand that customers love. And I think customers love brands ’cause they produce a great quality product, or they have a value system that matters. And so I think that if you, as an emerging brand today, can stand for a value system that resonates with your customer, you’ve got a massive leg up than the guys that are trying to figure out how to matter any more. So that’s one part of the answer. The other part of the answer is, does scale help or hurt you? I think that scale helps with an American made footprint, actually. And so I think that as we have gotten bigger, and we’ve been able to not only invest in and own our facilities in North Carolina, but then upgrade them and re-engineer them, the economics have gotten better, the efficiencies have gotten better. So I think scale is actually your friend and can make American manufacturing even more efficient if there’s adequate volume there.
Do you think the higher price point could drive people away?
There are t-shirts that sell for three dollars, for nine dollars, for nineteen dollars, for twenty-nine dollars, for fifty dollars, for a hundred and fifty dollars. From Ralph Lauren all the way down. And there are good, valid reasons for all of those segments of the marketplace to exist. If we try to compete with Walmart, let’s say, where every penny of cost really matters, we’d lose. If we wanted to compete, let’s say, with Abercrombie and Fitch, where our pricing basically maps, we might win. Because what we’re doing may be different in the eyes of a consumer than what they are doing.
What does the brand of American Giant represent, or say about people who wear it?
What I am proud of about American Giant is, we were told by everybody that it was not possible to make great things here any more, and to reach the mainstream consumer with it. And there’s an underdog fighter spirit around the brand that said, We’re not going to listen to that. And we’re going to invest in our factories and our people and our re-engineering. And so I hope there’s a bit of a flippin’ the bird at the people that’ve said it can’t be done. And that that says something about us as a brand and maybe you as a consumer, that you sort of have a similar mentality about refusing to hear the negatives and the nos.
What are some of the obstacles you’ve faced in started an American manufacturing company?
Oddly, people is one. It’s a funny thing with all of the dialogue about US manufacturing, that we have a hard time recruiting people in the towns that we’re making in. And that, by the way, is a relatively consistent them you’d hear through the supply chain. In many cases, those are low-skilled, entry level jobs. But in some cases they’re skilled, higher-paying jobs. So getting good talent, good sewers and good operators in those towns is a challenge. Re-baking in the quality and the art to that manufacturing process is a challenge. But that aside, those two things, there really isn’t much. It does require some capital investment. If you went into our sewing plant, you would not recognize it, compared to almost any other sewing plant you went into in the United States. We’ve really put a lot of energy and time and dollars into them to upgrade them. And so that’s a capital barrier, but that’s one that we’ve been able to manage. So I am of a view that if you continue to invest in people and re-engineering the floors, that you can have a pretty efficient plant, even when compared to those in Shenzhen or Guangzhou.
How’s the company doing?
We’ve got, in some ways, the opposite problems of the apparel industry. We’ve got too much growth. We have had times when we’ve had long back orders on our products, couldn’t fulfill them fast enough. And because of our commitment to quality and our commitment to domestically made stuff, getting up those demand curves takes longer than we’d like. But it’s been a fantastic experience. It’s one of those rare moments in life, I feel like, where you have an idea that you think matters, and then you see it suddenly take wind in a way that exceeds your expectations. So it’s been great.
How is the international market viewing America right now?
I think that there is a view of the political class of America that I think is probably taking a bit of a pummeling right now, with the Trump Administration, for reasons that I think we all understand. But I do think that’s different from the consumer products. I think whether that’s Hollywood or apparel or cars, I think there is this really durable American made brand. That was true when I was a kid in the 70s, was true in the 80s and the 90s and the 00s. And I think it’s true today. That there is this romance around great American products that in some ways is even stronger internationally than it is domestically. You know, places like Tokyo and Stockholm have a great reverence for American made products in a way that some American cities are maybe losing a bit.
How does the current political climate affect an American-based company like yours?
I think the good news is that wherever you land on the political spectrum, this conversation is at the fore now. That people are asking good, hard questions about how we re-invigorate the manufacturing sector. [I recently met] with Democratic senators, and I think it’s encouraging to see leaders on both sides of the aisle talking to businesses that are committed to manufacturing here. And the challenges and the opportunities they’re seeing. My takeaway is, you’ve got people there that are waking up a bit, that there are real changes happening in communities all over the US that we gotta be addressing. My personal view on that is that to the extent that Washington can help businesses make that decision and enable them to be successful, that’s the best role that they can play. I’m not a huge fan of some of the strong-arm tactics we’re seeing coming out of the White House right now, forcing companies or encouraging companies to not move internationally. I think it’s the wrong tactic… I’m talking about what I view as troubling overreach of the President himself, encouraging certain companies to not move overseas. I think that’s an inappropriate role of government. I think it’d be much better served by quietly partnering with the businesses that are actually doing it, and ones that are struggling with it and trying to make their lives easier in either staying here or transitioning back here. But from an optimistic standpoint, there’s a lot of attention focused on it right now. And those Democratic senators are spending time and energy thinking about it, and that’s a good thing.
In our case, I don’t have a ton of faith in Washington’s ability to get their act together and be helpful. And I think that the private sector, and business particularly, are where a lot of this change is going to come from. And I think in our case, we felt that we could do something domestically. And have been able to do that. And been able to do that well and financially healthily. And I would encourage business owners to open their mind to that thought. I think it’s an important think. I think keeping our communities working is an important thing. And I hope that businesses across industries at least spend a bit of time thinking about whether that’s possible in their specific business.
What was your biggest mistake when you first started out?
The biggest mistake probably was thinking that flipping the switch on quality was going to be easy. I think that was much harder than I expected it to be. There had been so many years of stripping quality out of the labor force in the Carolinas that baking that back in, kind of reigniting that pride and that capability just took a while. It took a while with the operators and the line supervisors and the factory managers longer than we thought. If you spend enough time basically stripping away where the only altar you worship on is the cost altar, that becomes muscle memory. It’s very hard to unwind that. And that’s baked into the plants, it’s baked into the supply chain.
What does it feel like when you see someone wearing an American Giant hoodie?
You spend five, six years pouring your heart and soul into something. You see someone wear it who found you and bought it and is proud about it, it’s about the most prideful thing you could ever have. It’s incredible. It’s almost like seeing one of your children out there. It’s fantastic. There’s nothing like it. You put that much energy and love into something, and seeing somebody return that back to you by supporting the brand is pretty incredible.
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