American Giant, a direct-to-consumer apparel company, makes what Slate called “The Greatest Hoodie Ever Made” -- among other bold reviews. But with a one-time backorder of more than six months and a celebrity following that includes Stephen King, Mikhail Baryshnikov and Fred Armisen, founder/CEO Bayard Winthrop might just be proving the moniker true.
“It’s the fabric, the hardware, the fit, the construction: when you feel it, you just instantly know it’s quality,” he says, describing the $89 hooded sweatshirt. Anne Palmer, Bayard’s first employee (who quit and joined her former co-worker’s start-up when it launched in 2012, Jerry McGuire-style), adds, “We call it the ‘thud factor.’ It’s this moment when you’re like, this is serious fleece.”
American Giant’s true success, however, lies in its overhead-slashing, word of mouth, direct-to-consumer approach: no retail stores, no marketing budgets, no full-page ads or TV commercials.
It was Winthrop’s 20 years of working in manufacturing prior to launching American Giant that taught him that “80 cents of every invested dollar is spent on things that are unrelated to the product itself,” he said. Which means that for the past few decades, consumers have been asked to tolerate high prices and low quality – and usually both when it comes to American made.
But then, a few years ago, Winthrop noticed a sea change. Online shopping was allowing for more choice, while at the same time, craftsmanship and ‘buy local’ movement was making a comeback. “Consumers started to say, ‘I want to pay for things that matter to me, and I don’t want to pay for things that don’t,” he says. Bayard saw an opportunity, sensing that an apparel company would do well in this space.
So he did some math, quite literally on a napkin at a coffee shop – and saw that if you cut out extra layers of cost like marketing and real estate, he could deliver a quality product to the consumer. The kind of product he remembers are great American brands like Champion, Levi’s, Wrangler, and Red Wing were making when he was a kid, before all the work went overseas.
“I have very vivid memories as a child, my father gave me his US Navy sweatshirt from the late 50s and 60’s, and it’s still fantastic today.”
With that, Winthrop launched American Giant with credit cards and a shared office space in the back of a friend’s warehouse. He recruited Palmer and then, in an unexpected move, hired a former product-engineer from Apple with zero fashion design experience.
“People thought I was crazy, but [I wanted] a fresh set of eyes, looking at all the component parts that go into making a great sweatshirt.” Pretty soon the team grew to four, they raised money from investors (including a former CEO of Pepsi), and they were off. Sales grew 10-fold from 2012-2013. And the company still struggles to keep pace with demand.
“We challenged ourselves to find a way to truly liberate American manufacturing,” Winthrop says. And despite his skeptics, he seems to have done it: “All our fabrics, from cotton in the ground, all the way up through knitting, yarning and dyeing processes come up through a Southeast supply chain and ends up in our main factory in North Carolina.” And as far as job creation goes, not counting the workers in his now five factories he contracts with, Winthrop now boasts over 20 fulltime employees.
Though he hopes that his customers appreciate all these details, Bayard is firm: this isn’t why you should buy his sweatshirts. His hoodie stands on its own.
Video produced by Sarah Lybrand; co-produced by Jessica Ashford & Emily Sharnhorst. Production by Michael Manas, David Dellaria and Matthew Smith. Edited by Sean Elms. Graphics by Todd Tanner and Adam Saul For Yahoo! Studios. Blog edited by Jessica Ashford. Executive Producers: Russ Torres and Peter Gorenstein.