American Giant CEO Bayard Winthrop says its line of red, white, and blue T-shirts turned a profit, and now the brand is manufacturing sweatshirts for Walmart.
Back in June, Made in America mainstay American Giant announced a partnership with retail behemoth Walmart to sell a line of T-shirts, emblazoned with the phrase “American Made,” for $12.98.
At the time, I was a bit skeptical about the collaboration.
While I’ve long been a fan of American Giant, there’s no doubt that the company offers premium goods sold at a far higher price point than the average Walmart product. Even though American Giant managed to price its Walmart T-shirt far lower than usual, Walmart sells T-shirts priced even lower, even for $3.98.
But American Giant pulled it off.
Founder and CEO Bayward Winthrop recently told the Wall Street Journal that the Walmart line of Made in America cotton T-shirts proved to be such a success that American Giant is now preparing American-made sweatshirts for the retailer, to be sold for $38.98.
There were a couple of keys to make the collab work, Winthrop noted. First, it required innovation from American Giant, which automated parts of the production process and invested in machinery to make the most labor intensive part, sewing, more efficient. But the volume of orders still led to hiring, as American Giant still ended up bringing on 75 people to staff a Los Angeles factory.
Walmart also played a key role. The WSJ reported that Walmart bars suppliers from placing the American flag or using the term “American Made” on products that aren’t Made in America, which helped the American Giant T-shirts stand out on store shelves. But perhaps more importantly, the retailer agreed to a huge purchase order ahead of time, which gave American Giant the reassurance it needed to make the investments that ultimately drove down the cost:
Winthrop said that without Walmart acting as a backstop by committing to buy a predetermined number of shirts over time, American Giant’s suppliers wouldn’t have had the confidence to make the investments in automation and other upgrades that drove down production costs. A Walmart spokesman confirmed that the retailer essentially signed noncancelable purchase orders.
Winthrop’s comments to the WSJ echo remarks he made during an interview with U.S. Trade Representative Katherine Tai back in October, where he outlined how he was able to build an all American-made apparel company from the ground up.
Walmart’s confidence in American Giant’s ability to fulfill its purchase order was key to the partnership’s success, Winthrop said. “It takes a commitment of time and a commitment of volume, and Walmart to their enduring credit, committed to that,” he said at the time.
The American Giant-Walmart Made in America collaboration is sadly rare in the retail landscape. About 97% of all clothing sold in the United States is imported, and the remaining U.S. textile manufacturers continue to face an uphill battle, thanks in part to lopsided policy that favors importers over American manufacturers and workers.
But there are signs the tide is turning. President Biden enacted significant industrial policy during his tenure to encourage more domestic manufacturing, and President-elect Donald Trump has expressed a desire to implement further tariffs, which could help level the playing field for American makers.
Winthrop told the WSJ that he’s started to hear from big brands about potential collaborations should higher tariffs go into effect. But there’s no reason why companies couldn’t start now, especially given the success of the company’s Walmart partnership.
“If little old me can spin up a big program for Walmart,” Winthrop told the WSJ, “a big brand with all of its muscle should be able to do something similar.”