A BEAUTIFUL HOODIE…

December 9th, 2012

Farhad Manjoo writes:

Most people won’t notice these details, but they add up to a remarkable garment. Before I wore American Giant’s hoodie, I couldn’t ever picture a hoodie looking unslouchy. This one makes it look like you spent a minute considering your wardrobe before you rushed out the door.

For a lot of people, this all might sound like overkill—a beautiful hoodie might strike you as oxymoronic and superfluous, and you’d just as well spend your money on high fashion rather than a slacker uniform. But even if you aren’t a fan of sweatshirts, American Giant’s business model is worth watching. Like American Apparel, the company has staked its brand reputation on making its clothes in this country. But American Giant’s rationale isn’t merely a patriotic one. Winthrop argues that by making clothes in America, he can keep a much closer eye on the quality of his garments, and he can make changes to his line with much more flexibility. An Asian manufacturer wouldn’t have been able to do all of the custom, intricate work that American Giant’s clothes required. On some of the hoodie’s seams, for instance, sewers have to run three different pieces of fabric under the machine, a move that required close collaboration between Manoux and SFO Apparel to perfect.

The upshot of this model is not only a revival of American manufacturing—you also get better garments at competitive prices. Winthrop wouldn’t tell me the exact cost structure for each of his sweatshirts, but he did give me ballpark numbers. A basic American Giant sweatshirt costs the factory $12 or more to make—about double what it would cost a foreign factory to make a much lower-quality garment. American Giant pays the factory about $25 to $30 each, and then it sells it to you for $60 and up. Compare this to a model under which you’d buy standard sweatshirt at the mall—say, this $58 Levi’s crewneck. The department store likely buys that shirt from Levi’s for about $30. Levi’s, in turn, pays the factory about $12 to $15 for it, and the factory likely makes it for $6. So you’re paying 10 times what the shirt costs to make, and Levi’s is earning $18 per garment. With American Giant, you’re paying five times what the shirt costs, and American Giant is earning $35. Since there’s no retail middleman, everyone does better under the American Giant model—the clothing company, the factory workers, and you.

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