American Giant CEO Says the Time Is Ripe for U.S.-Made Clothing

(Bloomberg) -- After years of preaching about the benefits of making clothing in America, Bayard Winthrop now has a much more interested audience.

The pandemic upended supply chains around the world, raising concerns about producing most of the world's consumer goods in Asia — thousands of miles from the shoppers who buy them. That's helped shed light on American Giant, the closely held company Winthrop founded in 2012, because it makes sweatshirts, jeans and t-shirts in the U.S.

His pitch to other companies is a simple one — making clothing in the U.S. can be done profitably, and an increasing number of consumers see the sustainability benefits of American-made goods. Bloomberg recently talked with Winthrop, who is also chief executive officer, about how the pandemic has impacted American Giant and the potential to make more clothes in the U.S.

Let's start with American Giant, which appears very much on trend with the boom in comfy clothes during the pandemic. How has the company performed over the past two years?

From a business standpoint, it has been good for us. It didn't start out that way. The first few months were rocky. But we're in the right product mix. We're lucky enough to have a much more localized supply chain.

Last year, we grew above 20%, despite the business being shut down for four months of the year. We're on course to beat that this year.

Given the supply-chain mess, more companies — even competitors — are reaching out to learn about your network. What kinds of things are you telling them?

I've always believed there was real flexibility and quality gains by staying local. I tell a story that when we have issues with a color being off, we have a way to be responsive that other retailers don't. They realize a color is off and [the products] are already on the water.

Speed to market and the better quality control that are available in a domestic supply chain can provide a counterweight to lower labor costs and lack of regulations [overseas].

If moving some production to the U.S. can be done, why isn't there more of it?

The big brands have gotten so fully committed to an international supply chain that they have zero incentive to be investing in automation and innovation domestically. We need policy makers to create incentives to tilt the scale back.

What are some changes you'd like to see in U.S. policy?

If countries want access to the American market, we should align on a set of standards that mirror the same restrictions we place on our domestic producers. We have appropriately high standards. Our international partners should have to similarly meet those standards.

You've been talking to people in the Biden administration about trade policy. What's your read on the White House?

The trick with all administrations is to balance between rhetoric and action. We've all heard that D.C. is heavily influenced by big donors, and that's true with Biden administration, too. One of the things you are seeing carried forward from Trump to Biden is quite a lot of agreement on trade policy with China and trade posture with China. That's an encouraging sign.

American Giant joined other U.S. companies to make face masks when they were in short supply last year. What do you want the big takeaway to be from what happened to supply chains during the pandemic?

My hope is policymakers start to understand that this is a point of vulnerability for us. My hope is brands realize this is wildly expensive for us. We have little way to react. We are completely being held over a barrel.

I want everyone to see there is an opportunity here.

Editor's note: This interview has been edited and condensed.

©2021 Bloomberg L.P.