American Giant: Bayard Winthrop

Hey, really quick before we start the show, we have an announcement about a really exciting new thing we're launching. A newsletter. And like our show, the newsletter is designed to be interesting, informative, inspiring, and most importantly, Fun. It's 100% free, and to sign up, just visit gyras.com. That's G-U-Y-R-A-Z. Dot com. I got a handful of brands in my life that

I like giving them my money. 'Cause I admire what they're doing and it aligns with my own values. And I think that is probably behind it is There's this intuitive sense that The Amazonification of our lives. Is not great.

And then we're getting this disconnected. reality from the people and the places that make the things that we need and love and We gotta turn back on that a little bit. Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements.

they built. I'm Guy Raz, and on the show today, how an idea for apparel made entirely in the US launched the brand American Giant. As well as what's been called the greatest hoodie. Ever made. You've likely heard many businesses talk about purpose. And purpose could mean a bunch of things. Commitment to quality, or healthy living, or

Bringing people together, right? But at the end of the day, and I say this with the utmost respect. A business is about being sustainable, or to put it a bit more bluntly, it's about making money. It's about scaling, and it's about finding the most efficient way to do these things. Which is what makes today's story so unusual, so remarkable, because almost everything American Giant does flies in the face of convention. Starting with where and how they manufacture their products. American Giant is an apparel brand, they're best known for zip up hoodies, t-shirts, and jeans.

And everything they make and virtually everything they source? is American. The cotton for the flannel shirts and denim jeans, The dies they use, the rivets, the buttons. All produced in places like Los Angeles, Chicago, and North Carolina.

This is an expensive proposition. The company could make a lot more money by simply outsourcing to China or Vietnam. But That would defeat the purpose of the business. The whole point of American Giant was to build a brand that was entirely American made.

And why? Why would someone be obsessed with this idea? Well for starters because it is really, really hard. But more specifically, Fired Winthrop, the founder of American Giant, Couldn't find the thick and soft cotton sweatshirts that he used to wear as a kid in the 70s and 80s when, believe it or not, 70% of clothing sold in America. was made in America.

So He decided to make them himself, and he also decided to see if he could create textile jobs in some of the very same places that lost them in the 80s and 90s. Today. Barely three percent of all clothing sold in America? is made in the US.

An American Giant has managed to become one of the very few US-made activewear brands. And Bayard has proved with a lot of difficulty that you can build a sustainable and profitable clothing business. Without outsourcing. You might make a bit less money, but He'd argue.

the long-term benefits massively outweigh the money. Bayard grew up just outside of New York in Greenwich, Connecticut. His parents split up when he was young and Byrd went to live with his mom, who was a real estate agent. Growing up, they moved around every couple of years, and Byrd remembered not having a lot of stability. I did at a pretty young age get pretty fixated on this idea of being stable financially. And in that town

Wall Street was kind of the thing and and starting I think in my sophomore year in college I Got a summer intern job at a bank. In in New York City. In New York City. Um and fairly doing fairly media work that first summer. The bank was called Donaldson Lufkin and Jen Ratt and I was working in Um essentially the mailroom, the sort of private wealth kind of back office part of that of that bank.

And that kicked off I think three summers of internships that eventually landed me a job in their investment banking program, which was a a pretty prestigious program at a pretty prestigious bank. And It was one of a couple of professional moments that was a real kind of aha.'Cause when I finally got that job it became clear to me that I was ill suited for that as a career. To to get into finance and banking. Yeah. Which is a grind. I mean, especially when you're starting out, it's like

Sixty, seventy hour. hours a week, right? Just a grind. But if you can stick it out, you can make a lot of money. Well we we did make a lot of money. Um

And it was a grind. How how difficult. the life was as an analyst, uh you basically didn't get days off. And that That took its toll, but

You know, I I have to say uh That experience was phenomenal. I have tremendous amount of appreciation for that job because it taught me how to work hard. It taught me how to be accurate, taught me how to get things done and over the line. But at the same time I was surrounded by a bunch of folks who had gone to Harvard and Wharton and Michigan and Stanford who were econ majors and were way smarter than me.

Um were outperforming me. And I think that began to kind of creep between to my head that I just was not in the right place. And I think about it a lot and that it that's a gift. If you can early on figure out even if it's what I don't want to do or what I shouldn't do, it's a real gift. And that certainly was that. I I After my my tenure in that program, I decided to

get out of banking, which was a big decision for me because I'd worked so hard to get the job. Yeah. But it had become clear to me that it was the writ. So you you Stay there for about two years. And you decide You're gonna leave New York and not just leave New York, but go to the West Coast, go to the opposite side of the country.

First of all, what what do you remember about that time? I mean you're probably twenty five. What was it about the West Coast that seemed interesting to you? You know, I think it was purely The desire to be start new and be free.

And ended up in San Francisco and a total happenstance. It a really good friend of mine called me one day, I answered my phone at my desk and he said, Bayard I said, Yeah, he said, You sound totally different. I'd made the decision to leave work. He said, You sound totally different. He said, It's funny, I'm I'm leaving. Denise said, would you ever move to San Francisco? I need a remain. And I had no plans. And so I said sure. And Uh, we got an apartment together. But I think the real motivation guy was

Just wanting to Let go. of all of these things that I had sort of built as part of my narrative and say, it's wrong and I'm gonna try something new. It was kind of that Intensely liberating, but that poorly thought out, also. And and it was just like yeah, I'll go and figure it out, right? I mean, which you can do when you're twenty four, twenty five.

W and I I had a fair amount of cushion financially from two years at DLJ and That made it easier. Yeah. I you know I I began to form a philosophy then.

having kinda gone through that experience at DLJ where I really wanted to crank down on everything in my life.

In my professional sector, so I got into a posture that said I'm gonna do whatever I can to give me maximum flexibility on work, which included taking a lower salary, which I ultimately ended up doing at the at the first job I got, but You know? driving an old an old car and and not buying stuff, including, you know, clothes and other things like that, really trying to live as modestly as I could to give myself

So you get to San Francisco and this is like nineteen ninety three. So this is the dawn of the internet era. You and you had just come off a job on Wall Street, but I guess you were really looking to get into like products like a like working for a company that made something.

Interest came from. A part of it was in the two years at D L J in the summers that led up to that. That work was almost theoretical. It was analytical in nature. It was looking at spreadsheets.

Um it was not at all tangible. And so I I had no interest in in technology or the advent of the internet or none of that. I was I I wanted to go in the opposite direction. I really wanted to find a company, a brand that made a physical product. And that's really what I focus my Energy on. So you you I guess through like a

series of friends of a friend. You ended up meeting This guy who is one of the owners of a company called Atlas Snowshoe, which I looked up, they are liter literally Snow shoes. W is it were you like uh I don't know, is it like a ski or a snowshoe or like what was your interest in that? Neither a skier nor a sh uh snowshoer. I don't think I'd

I'd been on a pair of skis more than once or twice when I moved to California and had never been on a pair of snowshoes. But that that company, Atlas Snowshoe, was a a remarkable little company. And when I found out about it, it was a couple of guys. One guy out of Stanford's product design program and a and another guy who had actually conceived of the idea. of building a modern snow shoe. There had been no innovation really at all in thirty or forty years, and they had designed uh interesting uh harness for your foot that gave you a mechanical advantage when you use the snowshoe itself. And they launched a company around that. And I was their I think their first or their second employee.

Um but It was all I could have dreamed of a couple of really smart guys making a product. Trying to get a company stood up in a l warehouse in a bad part of town of San Francisco and it was just I felt like I'd fallen into a tub of butter. I mean it was just the it was the absolute you know, realization of what I'd hope for.

And it's really from the ethos that those two instilled in that business. And Yeah, I had a front row seat to that, really. seeing those guys be sticklers for for design and and manufacturing that that was something that never left me. And what do they have you do? I mean you came from a job on Wall Street. Did you do sales, marketing? I mean, I'm assuming it was a small company, so you had to be like a Swiss Army knife. What do they have you Do with the company.

moving desks, sweeping floors, cleaning toilets, do just doing anything I could, you know, the the business. They had done something funny. They they'd been interviewed by a reporter for the San Francisco Chronicle and and they were nobody at that point. They were just getting started. And the reporter said, Where can I get this thing? And when one of the guys said, Oh, they sell it at Marmot Mountain Works in Berkeley, which was not true. They the surges were not there. And uh and suddenly uh a bunch of people started calling and uh the owner of Marmot Lot called up these guys and said, I keep getting all these customers, I I should get some peers in. So th they were beginning to see some growth. And it was just the two of them and one guy helping to build snow she's Mario. And

So I came in and said, Listen, I'll do whatever and you basically have to pay me nothing. I think I I offered to work for fifteen thousand dollars a year or something like that. And they finally agreed, but very quickly. as the business started to grow, as you you point out, i they needed everything. They needed help in building the sales force, help in running the the production floor, and so Um Just by

By being in the right place, I got to take on a lot of those functions and and maybe most importantly for me. All these theoretical things I've been learning. At the bank, I was now applying and finally understanding um how they impacted business. So understanding why a cash flow statement mattered and what margin meant and how it impacted the fun the the financial performance of a business and all those things. And so uh I eventually ended up overseeing a quite a bit of the business just because I was

someone there that was willing to work really, really hard and I loved it and I never left the office and uh So anyway, it was a period of rapid learning and also just real joy and passion for me. It was a really important chapter. They got, I guess, acquired by K Two Sports in ninety six. And and this is now kind of the dawn of the dot com era, right? And so and so at that point I I read that you

went in that direction. Like you worked for a couple years as as the head of an internet company called WebChat that that it it was itself acquired in nineteen ninety eight. That's right. So what did you do? After I mean I would think that maybe there were other tech companies you were looking at or other opportunities in that space. Did you

Do that. Uh no. In fact, um so we got acquired. And um I I was so ready to get back to a tangible thing.

Web chat it seemed like though it was a good financial m moment for me. it was a return to banking and that I was dealing with a product they didn't truly understand, wasn't passionate about. And so

Um I didn't even consider tech. had met another guy that had gone through the Stanford product design program and His name was Stein Strand, and and I had met him Um when I was at Atlas. And Steen and I became close.

And You know, fast forward a few years later. I had sold. Web chat. I was sitting out on Clement Street in San Francisco and had just come out of a bar with some friends.

And I saw a guy go. Flying by on a skateboard and then he turned around and said, Bayard, it's it's Stein. And we reconnected. And he told me about the business he was trying to launch and little by little kind of began to suggest to me that maybe

I could join him. And um So that that's what I did. So this was I think this company was called Freeboard. Yeah. Free board literally like skateboards.

That's what it that's what it was. Well, Stein had become obsessed with this idea of snowboarding. He loved snowboarding. He started to work on a project at Stanford. Um that was trying to mimic the action, the sliding and edging action of a snowboard on pavement. And he did that through a incredibly complicated but innovative and and brilliant design.

Uh uh Escape especially a skateboard. Just like a snowboard. And and that probably became free board. Yeah.

turnaround and sixty. Yeah, just imagine the way a snowboard functions, right? You slide on its base and you edge on its edges, and if you're on the base you can spin three sixty if you want to, or more importantly, you can go down The steepest hill and just Drop speed by edging in, essentially. And so That innovation was an incredible product. Um but it was dangerous and difficult. Oh my god, it's I'm looking at a video of it now. It's so dangerous. Yeah. These guys going down these hills. I mean if you fall off a snowbore, you're falling into snow. Well, exactly. You're falling into the concrete. Yeah. So think about things that maybe you should consider before you dedicate your professional life to something.

Yeah. Product in that category. And the innovation. and just wanted to get back into a warehouse and back around making things and I I didn't think for a minute about whether this business could be Yeah.

Two million dollar business stream. two million dollar business. I just wanted to do it. I mean you were there for all As the president of this company,

It seems like a really Narrow. Yeah. Yeah. But maybe I'm wrong.

Yeah, no no no, you're right. Getting it to any substantial size. Was Very difficult. Because of the inherent

constraints on a d dangerous product that's hard to learn. On the other hand The people that learned how to ride it were were in a Totally fanatical about it. Um and so

What was relatively easy was to build it to a sustainable size and keep it there. And I think for a long time we held on to aspirations that maybe it could get bigger, and it took me Seven years. I think to come to grips with the fact that okay. This is capped.

And It was clear to me that that that Mike might My time had run out there, that it was time for me to do something different. And when you left Freeboard, uh I mean it sounds like it just y you you came to the conclusion, this is two thousand eight. that um it probably

wasn't gonna become a massive mainstream product. Um and so you went on to work for a company called Chrome. And tell me about that company also based in San Francisco, imagine. Yeah. I just felt like I'd I I wanted to be operating on on a larger playing field. And I had gotten to know the owner of a company called Chrome. He was a very successful entrepreneur in his own right. He had built a A business that resold running shoes.

And then went into the footwear manufacturing business and bought Chrome. So he bought Chrome, because I think Chrome was founded in like the mid nineties. who had identified an opportunity in the market for bike bags that you can just at the time it wasn't specifically messenger bags, it was they were big mountain bikers, just something to carry that felt anatomically correct while you were riding. And they built these beautiful bags. They actually ended up they wanted a way to release it across your sternum. And they went to a local dump and and started to cut seatbelt buckles out of old cars and used these seatbelt buckles at the chest. And that sort of quirky solution ended up becoming this iconic badge that you would see riders riding with old seatbelt buckles on the chest. So they were the ones who who were the first ones who had the seatbelt buckle on messenger bags? Correct. Yeah,'cause I I know crumb. I mean it's like that like winged lion logo or whatever griffin. Yeah. Yeah.

Yeah, and so it was this awesome company and it and it was small and was the industry leader uh for these really beautiful handmade, hand sewn bags in Colorado. But they were a couple of entrepreneurs. They weren't business guys really. And and Rory came in and said, Listen I I think there's an opportunity to take this brand into apparel and into footwear and and make it a very important thing to do. And and so he did. And and he he brought me into help drive that process to

To expand the product offering, grow apparel, add footwear. and to expand its distribution and that felt to me like a heck of an opportunity. Great brand, great reputation for quality, an owner that wanted to Do big things. And so that felt like a A good moment for me. So your job was to I mean you become president of Chrome.

And what I mean, this is two thousand eight, so this is in the middle of a financial crisis. This is still pre direct to consumer. Obviously you could do direct to consumer, but it was still early days. So you were mainly Selling like Your your customer base was mainly like

Cyclists. Yeah. Kind of urban hipsters. People that were

biking or skateboarding or taking the subway to work and were carrying messenger bags and wearing clothing that was attached to kind of urban culture, I would say. And then that group began to expand out a bit to include skateboarders and and other things that were part of that core youth fashion movement. I I know that um about two and a half years or m close to three years in You must have started to have some disputes or The owners. What what was going on?

You know I think. I was evolving. Um I was starting to have real conviction about This was all happening at a time when The internet was exploding, to your point, e commerce was really coming on the scene in a fast and furious way. And I began to

get real conviction that your currency with your consumer was based on Your brand values and your quality. And I felt it. That it's core what Mark and Bart, the founders of Chrome, had built. Was a

Total. dedication to quality and a total dedication to local manufacturing. And that was I felt. A really important part of building

a foundation from which you could grow. And that if you lost that foundation, if you lost that commitment to quality, you lost that value system that supported local manufacturers. your core customers would leave you and when they left you eventually you'd lose everybody. I had seen moving manufacturing overseas. I'd done it myself. I did it at Atlas. I did it at Freeboard. And I was had this growing

discomfort with both my disconnection from the product when something came from You know, somebody that was you know, where I'm sitting today, the the person that stamped our snowshoe Cleats. It's three blocks from me. And I used to walk in there every day and pick up cardboard boxes filled with stamped cleats.

That connection to him, to his business, to the five people he employed. When that stuff all began to ship overseas, I felt this loss Of quality and connection and integrity around the product, but also more importantly the personal connection. When I I made ultimately I made a really impassioned pitch at a board meeting to Rory and his board that we had to basically make a stand on on staying committed to local American manufacturing and really, really high quality. And from that foundation, we build a great, great brand.

And just to clarify, they were moving manufacturing overseas for obvious reasons. It's just much more cost effective and efficient and If they could replicate, you know the quality or get pretty close to it, their margins would be much higher and they would have maybe a more sustainable business. I mean that was their argument, which is not an unfair argument.

It's a really sound argument. I mean I think h his his position was We're gonna get this thing into RAI and and a bunch of other mass retailers drive margin and we're gonna ship manufacturing overseas. And to your point, and they decided to move it to China or they were moving progressively the ma all the manufacturing to Shenzhen and Guangzhou. Um both the apparel, the footwear, and the bags. And I sort of laid it all on the table there and and just believed that we were making a mistake from a business standpoint. I also felt there was a moral part of it too, and and uh and that we had a responsibility to lead and Uh he disagreed.

I mean they must have thought that you were very naive. Oh, I'm sure I probably was. I mean I probably was guy, you know, I think I think that you have to be a little bit, I don't know, naive or crazy or something to try to defy a trend like that. But there was something in my bones that told me that it was the right thing. Um I knew that I wanted to be associated with a company that felt really proud about the products we were making and how we were making them and that to me meant

with men and women that I knew and talked to and could visit and that were, you know, my neighbors or down the road from me and I wasn't gonna be a part of something that I understand that, but that made you a total outlier, right? Because I I think at the time and even now, a lot of people could probably would have said to you, look, we can still be proud of our product. We can still visit those facilities. They're just not gonna be in the US. We we but we need we're we're business at the end of the day. We're not a

charity we're not a pr you know, a a nonprofit, we have to make money to pay our employees and This is the only way it can work. Uh I agreed with everything you just said up to that last point. I think you do have to do all those things. That's absolutely right. And um but there are multiple ways you can make it work. And and in my mind, you know, there's another piece of this, which is at that time, I think it's more true now than it was then, is there was this emerging consumer desire and interest in in local and farmers markets and Yeah, craft fairs. Yeah. And I I felt that that spoke to a larger shift in mindset and maybe even a growing sense of loss.

among consumers for great quality products that we grew up around. And so if you exist on a on a foundation of a commitment to a type of of a supply chain like American Made or really high quality that gives you a leg up. you could stand out and do something unique and something that that customers would really value. And I I I didn't know then. Whether that would be

two percent of the audience or five percent or ten percent or twenty percent of the audience, I'm not sure I even cared that much. I just felt that The challenge in in consumer products is carving out a a piece of turf that you can defend with a relatively unique value proposition to your customers. And I felt that opportunity was wide open for Chrome and It definitely resonated. It just was it was just my head was in a different place.

So y so given that you were just committed to this idea. Which made you an outlier. It was not tenable. You were not gonna be you couldn't really run the company if the way you saw things was so different than the way the owner saw it.

Yeah. I you know, I I remember Uh it was December. Um My wife had just had our first child.

December of two thousand. December of two thousand and ten. Mm-hmm. And Um Rory asked to meet me at I think 5 a.m. at the Starbucks.

And I remember saying to Allison before, I said, I think I might get fired tomorrow. And And uh We both like no. We had it we'd have the Chrome was doing well. I think it probably was the best year in my career I'd I'd I'd put to bet up to that point.

But anyway, so the next morning. After about an hour of polite conversation. In the dark at a Starbucks. Uh Roy said so we're making a change. And uh so my spidey sense had proven accurate about that.

They needed somebody who was gonna buy into what they wanted to do. Yeah, and it makes sense, right? I mean, if I was him too, I think you can't you can't have a CEO running your company that is is fundamentally misaligned with the way that you want to build the brand. And and to your point earlier, he His approach was super logical. In fact, probably more logical than mine was.

So this is December of Two thousand ten, and probably had a couple weeks to wrap things up. Did you have a plan? Did you I mean I don't you probably didn't anticipate this, or maybe you did For a few months or something, but Did you just think we'll m I'll go

Find something else or Yeah, what was your initial thoughts in early two thousand eleven? Well, it was it was a little terrifying. I mean I had a newborn newborn baby. Um and Christmas.

coming up and, you know, ten days later or whatever it was, it was a it was a really discombobulating time. And I I remember I sort of I I kinda laid out for myself three possible routes. One was I could Get a group of people together, a group of investors that had worked me in the past and buy buy a company. That was one thought. Another thought was I could go run another existing company. And the third thought was a good start.

My own. What did you did you have conversations with people? Did you called everybody I knew and Uh, called every investor I knew, called every entrepreneur I knew. And pretty quickly The idea of buying a company w slipped away. There was just no obvious companies that I could find that were for sale, or I couldn't obviously get investors together.

I had a couple companies that came up that were looking for CEOs that were sort of interesting. But at the same time This idea that I had kinda lodged in my brain at Chrome was rapidly coming into focus for me. The concept of making something Of the best quality and and thinking about growing up in the seventies and

The American products that I loved and that I felt said something about me as a consumer, the blue jeans, the kitchen aid mixers, the Red Wing boots, the Wool Rich shirts, these things that were iconic in my mind. They're still in my closet. These iconic American, well-made, indestructible, beautiful things. And how there that wasn't in the market today, period. You know, back then those products were not just

shining examples in the world of quality, they were also the shining examples of value. People used to think that the products that were made in the US lasted forever, they were very well made. That paradigm is gone. And so for all of those reasons I began to get really obsessed about

Starting my own company. And I remember I called my oldest brother in the middle of all this. I explained him what I was thinking, which at that time was sort of a faint outline of making launching an apparel business primarily online, all entirely made in the US of the highest quality. And told him why. And I remember he was quiet for a minute and he said, You you gotta do that.

When we come back in just a moment. How Bayard found the money to get started and why one of his first calls was to someone who knew nothing. about apparel. Stay with us, I'm Guy Raz and you're listening to how I built this. Hey, welcome back to How I Built This. I'm Guy Raz. So

It's 2011, and while most companies are outsourcing their manufacturing, Biard has decided that he wants to start a brand new clothing company where not just every piece, but every thread Is made in the US. I had a gut instinct that it was gonna be hard, but it was possible. And I did what I do, which is I kinda got on planes and got in cars and I started meeting with anybody that would meet with me.

And began to get a sense About what was still around. In the US in terms of capability. And it it became clear that That knitwear which is

knits as opposed to wovens, which is basically the two kind of categories you have in your closet, knits or t shirts and sweatpants and sweatshirts and things like that. That knits, that capability was still in okay shape domestically. Woven's less so. But I began to get enough faith that there was enough there. That we could launch, certainly a sweatshirt. And just to again to put this in context, this is around the time of like and I don't want to get into the politics of of this stuff, but it's like

You know, the rise of the Tea Party and and you know, w whatever the reasons behind that, some would argue that some of that was a reaction to to the collapse the manufacturing base and then, you know, eventually what would happen to our politics in in this country. Were you paying attention to any of that, any of the sort of the populist movements or conversations around People being frustrated, left behind, whatever it might be.

Definitely the latter part, that idea that there was a whole bunch of people out there that um had jobs where they could get up every day and and make a decent living and serve on the school board and and put food on their table at night and that those jobs were going. That was on my mind a lot. I really hated the political nature of those discussions. I I view

Those types of things is patriotic and nonpartisan. in their very nature. Um and this idea that's a very important thing. Let's say the conservatives have claimed a patriotism, I find to be

Just wrong. I think that uh we're all you know, most Americans are deeply patriotic and they might have different approaches to it. Um So I I didn't care about the politics. I cared a lot about What was happening to rural communities and urban communities all across the country and believe pretty fundamentally that

If we continued. Or continue down that path. We are going to start to create you know a country that And people that are. You know, have college degrees and

Can go on to be a Bankers and people that don't and that are getting left behind. And I that's That's a driving force for me now, it certainly was then, and that with that I thought about a ton. So You have this idea to make

An American sweatshirt, right? And First of all How did you go about it? I mean, you you said okay Everyone's on board. Everyone's like, Bayard. You're the guy. If there's anyone to do this

You're the guy, go for it, follow your dreams. And no one was on board, guy. My my wife and my oldest brother. That's about it. But How did you just Just What was the first step you took? I mean, yeah, you had experience, but you know, first of all, how are you gonna finance

Uh a sweatshirt. Business. So There's a few different questions in there. I think in the beginning the concept was American made clothing. of the highest quality.

You know, soup to nuts made here. If you go to China today and you and I want to launch a let's say a jacket business, we can go order 100,000 jackets in pink and two hundred and fifty thousand jackets with a hood with in orange and We can do a turnkey, just write the order. That you can't do that domestically. Couldn't then, can't now. What you have to do is you have to assemble a s an actual supply chain of all of its component parts. The zippers, all those pieces. Right. The fabric. Yeah, and and

And most brands, virtually all of them, and most retailers are not in that business. They are in the purchase order writing business. And so you have to become a manufacturer again, the way they all were. You know, they all were manufacturing businesses twenty, thirty, forty years ago. Today they're not. They're marketing and and and purchase order writing businesses. And so that was the concept. And that then turned into a what can I make? And I was I was interested in in what I think of as the American canon, you know, the most important pieces of clothing that that identify American style and that to me was the blue jean, it was the flannel shirt.

Uh it was a T shirt. And it was a sweatshirt. And those were kind of the four. Yeah, I at that point I I just it was one of those four things and I sort of looked at all of them and and flannel shirt felt impossible to me. Uh blue jean felt.

Yeah. little less impossible, but so incredibly difficult for our early nascent business. and a t-shirt didn't feel particularly substantial, so I kinda default into a sweatshirt. And so that became the thing I wanted to make is our is our flagship product.

And So I that was sort of the product piece of it that I was really focusing on and and and looking a lot at the underlying supply chain underneath it. And then separately as I thought about financing it. I began to reach out to my network of people and One of the m most important

father figures of my life was growing up in back in Greenwich was a man named Don Kendall who had Really built PepsiCo. Um He became the he was the CEO of Pepsi once. Became the CEO of Pepsi and started out as a syrup salesman. And he had been someone that I was a very important professional and personal guide. And I would periodically meet with him and tell him what I was up to. And I when I was performing this idea, I had a coffee with him and told him about it. He said I'm gonna

Write your first check. And he did. He wrote me, I think, a twenty five thousand dollar check. I don't know whether he said it or whether it was implied. He said if you go do what you say you're gonna do with the twenty five thousand, there's more behind that and He was true to his word and I guess I was true to mine and and and he over time began to invest more and really became the

the professional and financial backstop to the business in those early days. So that money was gonna be enough, I guess, to get you started, to design the sweatshirt, right? And what was the design gonna be? I mean A sweatshirt or a hoodie. How did you think about what your sweatshirt was gonna be?

So one part of it was just looking at what I remember of the kind of the heyday of of American sweatshirts, which in my mind were sort of the fifties and the sixties with Champion and Russell and building these really beautiful Heavyweight. Hundred percent cotton.

Thick. sweatshirts that got softer and better over time versus what was in the market. Then And so I knew conceptually I wanted to get back to some of the the things that I thought were so great about the best of American fleece.

And then the other thing that we they did that was maybe smart was I hired a guy named Fleet Manu. who was someone I'd known for a long time. Philippe Manuel. Philippe Manu. And uh he is one of the smartest people I know, one of the hardest working people I know. He was an apparel designer? No. He quite the opposite. He'd spent his career in uh medical devices and working on the early Apple iPod. He worked on the on the glass surface on the the iPod. And you thought he was the right guy. I mean, I thought he was very smart. I thought he was passionate. And what I liked was he had no apparel experience. As counterintuitive as that sounds, I really wanted somebody to come in that had completely unencumbered eyes where he he and I could ask very open-ended questions about what what made a great sweatshirt.

So I got with him somebody that started with no preconceived notions about anything. Not what was possible, not the way things do things, not the way the designers are trained or merchants are trained. I wanted somebody to come at this totally fresh, and he did, and he challenged basically every single assumption and we Piece by piece by piece began to assemble what we thought was gonna be a pretty great product. twenty eleven, the dawn of the direct to consumer age. So you're getting into it right at the really at the right time. And you because you decided I think from the beginning, this is gonna we're gonna sell this direct to consumers, right? We're gonna go online and do it that way, at least initially.

Yeah, not only that, but exclusively, I really I I thought at the time, which proved out to be wrong. That there was great economics to clean up. if you could launch a a direct to consumer business and Try to, you know, pass on. as much value and quality the consumer without any distribution costs as cost as we could.

I mean it's interesting. I remember being in San Francisco around this time with a friend walking through like Union Square and my friend saying, Brick and Mortar's dead. There's gonna be no brick and mortar and and parts of San Francisco that might be true. But in general that was wrong, right? I mean everyone said brick and mortar is dead. But now of course.

Not necessarily a bad model, but it's more competitive in that there are advantages to having a foot in both. Yeah, I think I think that um myself included just misanalyzed the problem. I mean, I think we physical stores And resellers provide a critical piece of the puzzle, which is just exposure to customers that an online brand only has a much harder time doing and and it's expensive to try to do that online. And I just didn't That wasn't even part of my calculus. Didn't even consider it and I was just totally blind to that. So

You you found the company and by the way, the name American Giant. How'd you come up with that name? Yeah, I'll tell you a qu really quick funny story about that. when you are starting an a a company and naming a company, you have to go through this agonizing personal process of what am I gonna name it? And then you have to once you come up with a name you might like, you have to make sure that your URL is available and that there's no trademark infringement or any other thing. I started to keep it. notes and lists and pads of paper in my car next to my bed and everywhere.

That I might Shot things down. And I had gotten it down to I don't know, three or four that I thought were okay. I didn't love'em. Um I was sitting at a coffee shop, I was on a phone call with part of the supply chain I was starting to build and I was kinda daydreaming on the call.

And I had uh my mother's mother uh grew up in northern Maine and if you looked out of her uh window of her house you could see These two hills. They were called the sleeping giant. And I was

thinking about that, kind of reminiscing about that, and the name American Giant popped into my head and I was like gosh, that's That's great. And I love this idea of

A quiet but strong thing. And sort of felt there were correlations to American manufacturing kind of have has been Left alone, but be strong if it got reawakened. So I got on my computer and and did a USP TO search.

And saw on there that it was available. For automotive. But not for apparel. And I was just crushed.

And the next day I drove to my My trademark attorney's office in um Sacramento. I met with him, I said hey I uh I had this name, it's taken. Is there any and he looked it up and said, No, this guy just renewed like a month ago. He just renewed his his trademark on it. You're not getting it. Four apparel.

for apparel and I was just bombed. And so I anyway I was driving back to the city from Sacramento, I was on the Bay Bridge. And I I just couldn't let it go. And so I got the the phone number attached to the trademark. Filing I call the number. And somebody answered the phone.

I said, I uh Do you own the trademark to American Giant? And he he was like kinda taken aback. Yeah, I do. And I said, Well, I told my story. And I said is there any chance you would sell it to me? And he was quiet for a few minutes and he said, I'll tell you what, I

I'm a lawyer. I wrote a thriller. in the kind of John Grisham. Vane. called American Giant. It's like a legal thriller.

And I've always thought that I might one day. become a New York Times bestseller and people buy T shirts or something with the name of the the novel on it, but that's a pipe dream. And if you rate me a five thousand dollar check, you can have it. I almost drove off the road.

Anyway, that guy, Keith Berkshire, has become a Dear friend of the company, he just emailed me two days ago, said he was gonna go to our store in Boston. I love it. He's a part of the you know, the as you know, any of us that have ever started a company, there are these moments that feel like it was meant to be. Well, Keith is You told him your vision over the phone. Yeah. What a great story. It's a great story, yeah. Um

So Here's my question. Like you it took you it would take you a little less than a year Before you had the first product and I want to get to how you made it. I mean the goal of course is to h is to get to the point where you can sell something

I mean, you want everything to be in the US, right? That means Yeah, the zipper, the the fabric, the the stitches, and then the the labor Was that even possible? Was there even For example, like a zipper?

manufacturer that made zippers in the US? Mm. I mean the real answer is I didn't know. Um we began some of the early work with a group called the S Group in Portland, Oregon. A guy named Gary Peck runs that operation up there. And Gary had worked for Adidas for many, many years, had worked in the American made division Adidas and had a lot of knowledge. And Gary was a really integral part early on as the S group was helping us.

steer through the difficulty of figuring out exactly the questions you're asking, where to go for what. They're like a consulting group. Yeah, they're kind of like a turnkey, like um you want to go make up and fill in the blank, a pair of boots. They can help you design and develop and then source that product. And so we began to through him I began to meet more and more people and But the fabric piece of it We couldn't figure out. We couldn't we we were after a very specific if you hold our what's called our classic full zip sweatshirt, if you hold it, the fabric is pretty unique. It's very tightly knitted. It's got it's 100% cotton. It's got a very dry feel to it. And to get that fabric knitted

I don't want to get too wonky with your audience, but it requires a certain type of knitting machines and those machines had gone over to Japan a long time ago. And so we were really struggling with how to get that made. And in the middle of all that I had met In a town called Gaffney, South Carolina.

A company called Carolina Cotton Works. And the man that ran that company was a man named Pai Ashby. And Pai saw something that I think lit a spark for him and He we sat in his conference room on the second floor of that building and Paige looked at me and said, I'll get this figured out for you and he did.

What did they make? Carolina Cottonworks is a originally was a washing facility that just washed fabric. Um grew it into a f what we refer to as a finishing facility. So they put color into cloth. and they put texture in the cloth. Um in our case, napping. And napping is if you ever think about a a bath towel, that's essentially a French Uh Terry.

If you ever stare at it, you can see that the loops of the knitted fabric are intact. Yeah. When you nap that fabric, it it's literally thousands and thousands of needles that pick those loops. They kind of Cut them. And that's what creates kind of a fuzzy backing, let's say, to uh the inside of your sweatshirt. Yeah. Paige got us connected to a group called Clover Knits in Clover, South Carolina. Clover knitted the cloth and Paige figured out how to get it napped and finished to our specs.

And it's a It's not an overstatement to say we would not be here today if it hadn't been for Page and his leadership and Paige passed away a few years ago, but um He was a remarkable human and a remarkable businessperson and a good friend and really got us off the ground in a way that we couldn't have done on our own.

Alright, so you You have this deal with them to make it. And They produced the first run of sweatshirts, right? And and these were zip up hoodies, and I guess I should b at this point, just full disclosure, Bayard. I own a few of your sweatshirts, in fact.

for this interview I'm wearing one now so I can feel it as you describe it, because there's those double stitches and it's heavy and it's Just a thick solid sweatshirt. Um so I know them well. W when you Got this first run in.

What did you do like how did you just like put them on the website? Did you reach out to media to get some attention? Like how did you get people to become aware of this thing you were trying to do? Well the the basic business idea was if you built a really great sweatshirt and did it in a way that

both the brand and your consumers would be proud of that that customers would care. So that basic idea was what we wanted to launch the business around and so we poured everything into the product basically. And I sent out you know, a thousand emails to everybody I've ever met in my life saying, Hey, I'm watching this company, please buy a sweatshirt. And so we did that. And so we launched, we shipped our first sweets. Men's only at the time. In in February of two thousand and twelve, we got a little bit of press. And

We had friends buy stuff. But it was still tiny guy. I mean I think we sold I don't know, maybe ten thousand dollars worth of sweatshirts a month. And they were expensive compared to compared to the mass produced. You know, sweatshirts made overseas. They were

I mean, like if you could buy you go to you know Uniclo, and you could get one for like fifteen bucks, right? Yours cost what? Seventy five, eighty bucks at the time. Right. Maybe a hundred, close to one hundred. And and that was because the cost to manufacture them was gonna be naturally it was gonna be higher if you were

If you were sourcing almost everything from The United States. Well it was Really every component part. In fact we we underpriced the sweatshirt at the beginning by by quite a bit. Um the fabric itself was

expensive. The the zippers are expensive. The ribbing. I mean, I can give you chapter and verse on all these different parts, the double line hood, the metal aglets, the custom poles on the zipper, all these things. They are expensive. The needle in in in hiring You know, we we really wanted crafts people sewing these things. We didn't want just ton and gun sewing. And so at every part we were investing in the in the product. And asking our customers to trust us on that because they weren't walking into a store to feel it, right? They had to they had to take it on faith that when it arrived in their house in a box that it would meet their expectations.

And I think concurrently you opened uh A store, right, around that time? Well when I started the business, I opened up in in the back of a of a friend's factory and just rented a desk. But eventually we when the business started to get going, we rented a tiny little building on twenty first street in Mission in San Francisco. And we put five desks upstairs and we built a little Essentially a warehouse downstairs where we could store

The sweets. And then a little at the front door, a little bit desk where someone could come in and buy stuff. So you had a little if you walk down twenty first street, you could walk in and try on a sweatshirt and buy one. And we did all of our shipping out of there, and we did all of our everything out of there. But it was good to have a place where people could walk in because you could interact with people and see when they tried it on, was there the response? And so there was this feedback loop there that was great.

But it was it was really small. So that first year You're trying to sell to whoever you can. And By the end of that year, and this is when I first

Heard about. this product. It was it was December of twenty twelve. An article in Slate comes out by Farhad Manju who who used to be at at the New York Times This article was titled This Is the Greatest Hoodie Ever Made. Which doesn't get much better than that. I mean that's a pretty ringing, rousing endorsement.

Yeah. I was working at N PR at the time and I I interview you. When that came out we talked about the sweatshirt. Um what did that

Article Duke I imagine just th things blew up like For a time. It I mean changed everything. I I um I had met Forhard We had approached him and said, Listen, we think we're doing something kinda interesting.

Why don't you look at this and compare it to a bunch of other sweatshirts and see what you think. And He was a tech reporter for Slate at that time. And I think this kind of grabbed his fancy a little bit. It was a Some part of Tech Story'cause of the e commerce angle, I guess, but It just felt something different for him and I think he

intended to give it a couple of hours and move on. And he came to the city one day and met with me and he ended up spending I don't know, four or five days with us and really immersing himself in the whole thing. And wrote this. really detailed article that was Not only

an exploration of the business model, but the sweatshirt itself and I think he was moved by what he saw and the product and wrote this article that When it went out, and to your point it was early December of two thousand twelve. I'll never forget it. The article hit. I didn't know it. I got a phone call from the people that were hosting our e commerce platform and said you

Are you aware of what's happening here? I was no, he said. Something's happening. We are trying to get inundated. Yeah, we're getting inundated. But inundated was a the understatement of the year. I think we were getting something like a hundred orders a second. Wow. And We didn't have that much inventory. When we come back in just a moment.

Biard scrambles to meet demand, and soon after A key partner leaves him with Thousands of orders to fill. and nowhere to get them made. Stay with us, I'm Guy Raz and you're listening to how I built this.

Hi guys, my name is Deidre. I live north of Baltimore. My favorite episode is Dogfish Head Craft Brewery. Many of us tend to gravitate towards that area in the summer where they Establish their business. They just have a incredible story. So thanks. If you want to share your favorite episode of how I built this,

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Hey, welcome back to How I Built This. I'm Guy Raz. So It's 2012 and American Giants hoodies are the subject of a viral article, but at the very moment customers are beating down his door. Bayard realizes that he just doesn't have that much inventory.

And not only do I not have that much inventory. The contracts that we had for future yarn and knitting and finishing were finite too. We had maybe, I don't know, so another Call it ten thousand. Yeah, not even probably five thousand sweatshirts on order. And so within the span of like twelve hours, we sold out of everything that was downstairs in our in our facility in in the mission, heading into Holland. Yeah.

And and in fact, you know, one of the guys I worked with had come in a week prior saying we have way too much inventory for holiday, so that was gone in an instant. And the next day we kinda all gathered and said, What are we gonna do? We said, Why don't we put up a blog post that said if you wanna get a sweatshirt, fill out this form, which people did. Fill out filled out a form in droves. And and within twelve hours. bought all future production.

So sweatshirts that we were not gonna ship until March People were buying today in December and saying, Ship it to me when it's done. So that sol sold out instantly. And then we sat in a room and said, Well We gotta order more. How much are we gonna order? And

That was a Good luck with that conversation, you know. By the time that new stuff was gonna land, it was gonna be hitting our warehouse in the middle of summer. uh that article would be old news and it'd be ninety degrees in New York City. And so We made a guess and Off we went.

And what ended up happening just to complete that story is He wrote a follow on article. About I don't know. eight or nine months later. And the title of that article was

The only problem with the greatest hoodie ever made is you have to wait nine months to get it. And so that took us from our being completely swamped and like shoved us under, you know, another hundred feet of water because that article went as crazy as the first one did. And uh Those two really created havoc for us for you know went on for about Three years. Yeah. There's a backlog.

For almost three years. Yeah, and I think everyone asked about that, right? Which is like why can't you get in front of it? And the thing that I think people don't really appreciate is when you sit in a room and try to figure out what demand is gonna look like in six months, it's incredibly difficult. And so you make your best guesses and we Chronically underestimated demand and I think what that did was it was crazy. spending too much money. Yeah, if you get it wrong, you just you'll bankrupt the business. And so we so you end up being conservative in those bets.

And that conservatism ended up in sellouts and the sellouts added to demand. And everyone thinks like, Oh, that's great. It is partially great. We we um luckily our our customers really stood by us and and we were very transparent with The challenges that we were having getting back in stock, but It's not a great feeling when you feel like you're chronically disappointing your customers and not not able deliver what they're what they're asking for. So but yeah, it went on for a long time. How long

Did it take? To make one sweatshirt. Yeah, so so I'll I'll just see the whole step by step process. So um the big regions of cotton production are California, Texas, and the south east, um, north and south Carolina. So that cotton gets grown. Um, it gets harvested typically in late October, early November, and m goes to a gin, if you remember your um Yep. Your old history lessons about Eli Whitney. The ginning process removes seeds and leaf litter. It used to be done by slave labor in the United States, was a big part of the southern economy. Now it's done through automated ginning machines, which are are kind of dotted all over the United States cotton growing regions.

So it goes and gets ginned. So in this example that I'm giving you, we get ginned at the Enfield Gin, which is in Enfield, North Carolina. And that gets cleaned and then bailed. And so that gin takes in raw cotton and out the other door goes a bale of cotton. And that cotton gets label, so you get varietal, you get moisture content, color, but a whole bunch of quality controls, much like a grape and a wine. Yep. And then that bale goes to a storing facility where it sets for anywhere from a month to eight or nine months until it gets pulled into a yarning production facility. They have to turn to yarn. In our case. That goes from North Carolina where it was grown across the border into Gaffney, where there is a company called Parkdale Mills, and they convert that And that's a highly automated process. But that yar can't be turned into a sweatshirt. It's supposed to be turned into something else. Um that spun yarn would then go to Clover, South Carolina. So another factory. Another factory. This is a knitting knitting facility. So it takes the raw yarn into knitted cloth.

And to f basically fabric. Correct product. Correct. And that fabric sheets of the fabric okay. Sheets of that fabric that look like the color of cotton grown in a field, so it's sort of like a dirty white, maybe? Yep. It's they call it grayish color. And it's it's sort of a tough fabric, rolls of that raw fabric then would go to Carolina Cottonworks right down the street from where Clovers and Clovers, South Carolina, now back to Gaffney. Um where it gets dyed, napped, and finished. And so smoothed out. Smooth. And it in the in our case, the back of it, the front of it gets some sanding, the back of it gets napped. So that fabric gives you that dry hand feel that you can feel in your sweatshirt now and the napping gives that soft and cozy interior. Now you've got finished fabric in a roll that looks like basically what you're wearing.

And the final step is that goes um north about a hundred and forty miles. Back to North Carolina. Back to North Carolina to a facility that we own outside of Raleigh where that fabric is cut. And sewn into a final Sweatshirt. And what emerges out of that facility is the finished product that you're wearing. There I mean just the the number of steps from field to to finish, it's going through so many different places. So the costs add up.

over time and the time to do it, right? I mean so Given that this is all done domestically and all of those people involved are domestic employees or workers of those factories. you know, by the time it's ready to be sewn into uh into the garment The cost of that role is

must be relatively high. Yeah, I mean I you know, I I think if I took you through or supply chain step by step. It's hard not to emerge out of that process and think, Boy, it's it's underpriced maybe. Uh the amount of craft and knowledge and people that touch it is remarkable. I think it's important that we as You know, just

People understand how hard it is to get food produced or uh or products to get produced that we consume. And I think we've lost touch with a little bit of that. But it is amazing to see it up close and to see all the people and all the skill that goes into making a sweatshirt or a or a or a T shirt. Um Who what were the reasons people were interested in buying the product. Was it was it a sense of patriotism? Was it like I wanna support made in the USA? Was it or was it something different, or was it

A bunch of different things. probably what you uh experienced was this article that came out that w seemed totally unique and different, went totally viral, you couldn't get it. But I think in addition to that, I got a handful of brands in my life that I like giving them my money. 'Cause I admire what they're doing and it aligns with my own values. And I think that is probably behind it is

This gets back to the earlier comment about this sort of nonpartisan patriotism that I think a lots and lots of Americans feel that There's this intuitive sense that The Amazonification of our lives. And that we're getting this disconnected.

reality from the people and the places that make the things that we need and love and We gotta turn back on that a little bit. And I think that's Probably part of it too. One of the things I wonder about is as you were introducing this product to people, Of course.

uh one of the reactions was going to be, this is too expensive for me. I can't spend a hundred dollars on a hoodie or a hundred and twenty or whatever How did you explain to potential customers why the price was what it was and why that was worth it for them. Yeah, we we still get that, right? I mean our stuff is expensive. Any way you look at it's expensive and and it's in many cases too expensive for a lot of customers of ours. You know, we don't we can't sell to the Um

You can't make a eight dollar sweatshirt. It's not possible. It's impossible. Uh an eight dollar special is not possible, but but You can't make a twenty dollar sweatshirt. Is the role of volume and commitment.

If you had a significant commitment from a major brand or a major retailer. The pricing paradigm changes pretty fundamentally. Even with the cost of labor in the US, like even though just the built in costs are higher because American workers Um are paid more.

That is true. And and that that's that you cannot get around that. So the cost of labor in the United States compared to China is Uh they're not really comparable. Um and And I think I'm not going to be able to Um

We should be addressing some version of that in our trade policy, but there's an inherent cost structure by making the United States that is forever going to make it more expensive than say manufacturing in China. But you can close the gap down massively if there was volume and commitment there. But so so ha but to your original question, how do we communicate that to our customers? You know, I think we we try to communicate on our website. We try to talk to the media and we hopefully deliver on the quality, but our customers understand that they're buying and supporting communities and neighbors and when they buy products from us. And that hopefully that that that is part of the value proposition, right? And by the way, there's no judgment attached to that. I there are many people that that need to shop at places where they can get a you know, a sweatshirt for nineteen ninety nine and and it's important that they could do that. But I think for people that have the ability to make choices there.

I think that that is part of the value proposition. That if I can direct my dollars towards something that I think is is going towards something I believe in and is consistent with my values is part of how Think about value when they buy a sweatshirt or a t shirt or a pair of jeans from us. Um you acquired

uh a manufacturing company called Eagle Sportsware, which which means that you essentially became a manufacturing business. I mean you earlier talked about how most apparel companies are just purchase order companies. They're just filling out forums They're probably designing it and then it's just made everything's just made for them in China or wherever. You are actually you had to become a manufacturing company in order to do what you wanted to do. Mm.

Yeah. So the real quick story there is we were making all of our stuff in a facility about twenty minutes south of where I am today called SFO Apparel. And that facility is is run by a guy named Peter Mao, who was very important. And when that slate article hit I went down and saw Peter and said Peter I I need All your capacity.

Through the end of the year. And in any normal circumstance, that would be the best news ever if you were a domestic sewing facility. And Peter said, Okay, let me Spend the weekend, I'll talk to my team, I'll get back to you on Monday. And he called me on Monday and said, I've just gotten a phone call from Under Armour.

and they have a container ship of I forget what it was, jerseys or something that had a problem with it. And they needed Peter to fix'em. And he said, I love American Giant, I love you guys, but You've been around for a year and this is under armor and I can't turn this business down. Yeah, you shrunk our capacity down. I think we had two sewing lines at the time it took to like keep one open for you. Yeah. And so in the middle of all that, we

We're panicking and I remember I I met with Mr. Kendall and This is K uh Kendall the the guy who's your Yeah sorry this is my my primary investor and and our kind of guiding force. And he said to me Do the customers want the product? It's like the most basic question. And I said yeah, they're you know, we're having a hard time supplying them. And he said, Well then you can't have your

Manufacturing be a constraint. And so we ended up buying a a facility in Middlesex, North Carolina, um, which is a f a sewing facility called Eagle Sportsware that now sews. Uh probably sixty percent of our product. Wow. Bayard um in March of twenty twenty four. A book came out called American Flannel.

By a guy named um Steven uh Kuritz. And a lot of this book i is about you and about Um, it's about basically about uh entrepreneurs who are trying to make clothing. in the United States and how hard that is. And part of it talks about this this saga that you went through too.

Create a flannel shirt. Initially when you launched American Giant in twenty eleven, This was Like in your vision, you wanted to make a flannel shirt. But it wouldn't it would take like seven years to figure out how to make a flannel shirt in the United States. I think most people think think of that and they're like, a flannel shirt? What's so hard about making a flannel shirt? What what's the challenge there? Why can't you make this in the US?

What was so hard about that? Well yeah, so Where do you begin, right? Yeah, I mean I think uh when I originally thought about the business, I thought of, you know, uh there are probably four iconic American silhouettes. There's the t-shirt, there's the sweatshirt, there's the blue jean, and there's the flannel shirt. And of those four

the flannel is the most complicated and and uh much more complicated than I even give it credit for. The difference is just to try to keep it really simple, when I was young the great flannel shirt she bought from Woolrich, um LL Bean, that lasted forever and they were beautiful and got more and more patinaed as they aged and got softer as they aged. Those were yarn dyed flannel shirts.

And yarn dyeing is a is it's kinda half art, half science. Um that the individual strands of yarn are Died. And then woven into the fabric to create the flannel pattern. So it's not like dyed, you don't just make the shirt and then just stamp a flannel. And print flannel on it. And that is what you buy today is is most of it's printing it. Absolutely, yeah. And so I wanted to do a yarn dyed flannel shirt in the United States.

So you have to actually buy the yarn and then dye it. Um unlike the c the knitted fabric that we spoke about earlier, but it has to be individual strands of yarn need to be dyed. Wow. And so I got it in my head. that I wanted to do a yarn dyed flannel program. And

I reached out to the New York Times and there was a reporter there who worked in the in the fashion uh team named Steven Kurz. and s asked him if you wanted to come along for the journey. I didn't had no clue whether we were gonna be successful or not. And he's a guy that grew up in Western Pennsylvania under the shadow of Woolrich. Grew up in a mill town. and had witnessed the decline of that brand and the offshoring of its production, and I think it It struck a note with him.

And he said yes. And he ended up following us for a year. Basically, as we went down this incredibly arduous path of assembling the component parts necessary to make a yarn dyed flannel.

And Um we released it in time for Christmas. I think it was two thousand seventeen. And Steven wrote an article for the New York Times called The Annals of Flannel. That

track that journey. And I think Steven got approached by two or three publishing houses to turn it into a book. Mm. But I think I'm not sure. You know, I think the thing that's interesting about that book is it poses pretty fundamental questions about

You know, what happens to a country if we don't make things anymore? And uh I'll I'll shamelessly plug Steven's book because he did a he did a heck of a job and I think I think Stephen King said it was without question was gonna be one of his favorite books of twenty twenty four, so And and and if I w if I just will say I think

It's a good example of I think this n the non partisan nature of of domestic manufacturing. You got people on the right and the left that care really deeply about this stuff, and I think. That's as it should be.

You've been at this since two thousand eleven and even before, but but publicly pushing for making things in the US. And there are there you know, there's some brands that were doing it, American Apparel was doing it for a while, but You've been on this. out there talking about this. Have you seen any movement? I mim have you seen manufacturing.

At least in the apparel. Business. You know, moving towards making more stuff in the US or has it not really Happened yet. Well well h here's the thing. Uh

About forty years ago. We made a bipartisan decision. To place consumption at the center of our foreign policy. Yeah. Getting

consumers the cheapest prices and the most choice was the absolute best thing to do. As opposed to putting Manufacturing. at the center of our foreign policy. And I think that the n a lot of that policy makes some sense, right? That we now can get flat screen TVs for cheap. Lots of choice. But there's also a lot of consequences of that policy, which has resulted in real devastation to lower middle class jobs to urban rural communities that have been just decimated.

If you have a four year degree and you can be a consultant or or work in banking or you know, you're doing well. You'd be in the stock market, you've done great. If you have not done those things, if you've if you've got a high school degree and you have a job that's gonna put you into the trades or manufacturing. The last forty years have been absolutely devastating. And that doesn't end well for a country.

And Um I think that was a fundamental mistake. It was a bipartisan mistake. We cannot build a country. on the back of consumption arriving at your door, eight dollar pair of sneakers the next day.

We are going to hollow out the middle class in this country in ways that have long term very bad consequences. I think the good news is that consumers are waking up to it. Policy makers are waking up to it. And so Have we seen movement? I think you're definitely seeing movement in D C. Certainly the Biden administration's doing that in a pretty important way. And the Trump administration was as well, actually. Two pretty opposed administrations, obviously. They're quite consistent on trade policy. Um Bob Leidheiser, who is the uh US trade representative under Trump, and Ambassador Ty under Biden, actually see the world quite similarly.

And are doing good work. Ambassador Ty particularly doing good work at beginning to restore some protections to domestic manufacturing that are gonna have good long term consequences. There's a lot more work to do. But she particularly has been at the fore of driving real change that we're gonna see the benefit of in the coming years. Yeah. A couple years ago.

You guys. took on a strategic investor who gained a controlling stake. in the company, Miguel McKelvey. Who co founded We Work. Um

Tell me about Why why y you sort of made the decision to partner with him. Well, Uh I assume it's

appropriate to talk about this, but I got a a phone call one morning when I was out walking my dog in the presidio in San Francisco from you, Guy. And you had reached out to me and said, You and I hadn't spoken for a long time, I don't think And you had said that you had a a guy that was interested in US manufacturing. And was kind of poking around and someone that you I felt was a good human and was wondering if

You could make an introduction so that I could share some of our scar tissue with him. Yeah, he was Miguel McKelvey who who had been on the show. he was looking to start a a sneaker company'cause he played basketball. in college and he wanted to make the sneakers in the US and I said, Oh You should talk to Bayard Winthrop who makes everything in the US. He could be a really good resource. And he wasn't looking to invest or buy anything, he was just looking for some advice on where he could make the shoes. Yeah, and it you know, like all these things, you you spend enough time banging your you know, head and fist against the wall, you learn stuff, right? You learn who who can do what things and

what things are possible domestically which aren't, um where to spend time, where not to spend time. I was trying to you know, as you know, Miguel's a he's a great person. And uh and so it was just those were invigorating conversations to be able to speak to somebody that has done interesting things and was thinking about the problem well and was you know kinda trying to enter into the industry and so those are really good conversations. And I began to sense that, you know, the conversations though were kind of in the micro about footworth where they're more broadly about his interest in in trying to improve uh work environments for humans. And you know him, he's a very philosophical deep thinker and the conversations often took on that form and I remember one day I was

Why don't we do something together? You know, you're You're thinking about this in a way that's different than me, but that's very much consistent and aligned with what we're trying to do here. And I think you have a huge impact. and I think it would allow you to explore some of the things that you're interested in.

And that conversation over the course of a long time evolved into into him saying that was something that he'd consider and then ultimately happened and Um I think it was two years ago now or three years ago. He's your main investor now. And he's now our main investor and and I think it was a condition on his investment that he wanted to be able to really have a long term view about How to build something great and be able to do the things that he felt were important and so it was really important to him that he could

he could have controlling interest in the company. And so uh and so that's what he else we did. It's just been a It's been a fascinating thing for me to have a thought partner who really thinks about things quite differently than I do. Um but has made me a lot. Smarter and and

I think more thoughtful about how we're approaching the problem. May I give you an anecdote. In our facility in in North Carolina, he came in one day and said about labor. And the challenge of getting labor. There. And um

Miguel said, Well, you know, who's the typical worker here? And Miguel said, Well, you know, it's It's all women the faction, ninety eight percent women. Um And we also do a lot of them have kids. Yeah. We a lot of them have to like get kids after school, yes, be home after school, yes. And so Miguel said.

Why don't we convert a couple these offices into an after school program. Put in some computers. Why some snacks. In North Carolina. In North Carolina. We haven't done that.

But that was a suggestion eight months ago. And It hit me like a ton of bricks guy. I was like, well. Yeah. Yeah, what's what's that gonna cost me? Fifty thousand dollars maybe?

You know, I I worry about whether I've got free coffee and snacks in my office in San Francisco, but I had it didn't even occur to me to do that and North Carolina. So we're looking into that. Exact thing. And so that kind of thinking

is pushing us forward. You know, you mentioned earlier you mentioned this idea of scale, right? And so to produce something inexpensively, like to make a an eight dollar T shirt. You can do that if you you know, make a bunch of'em in in Asia and then put'em in a container and ship'em over here. To do domestically much harder

But is there a world where you can actually You use scale. And domestic labor here in the US and s and Produce something competitively priced? No.

Question about it. It can be done. Absolutely can be done. The key Factors

Or Volume. And durability of commitment. What I mean by that is if you had a major retailer.

Three or four in this country. or a major brand. That said. I am going to make a commitment.

Two A T shirt, let's say. And I'm gonna commit to it in a reasonable volume. Maybe that's some small fraction of the number of t shirts you sell in a year. But I'm gonna do it domestically.

And I'm gonna be steady in that commitment, measured in in years, not months. So that the Supply chain. Partners knew that there was going to be steady volume over time.

That has a fundamentally transformative impact on cost. And that therein lies the irony. Is that There is a real chicken and egg with domestic Textile production.

That it is all offshore. And so the businesses that are left are constantly trying to land the next You know, five thousand piece order. Yeah.

But if you had a a a way to drop in A order quantity measured in the hundreds of thousands of units. It changes price in the most basic levels and blows up entirely. The negative paradigm. Of

Why American manufacturing is so wildly persp you know expensive it's only available for the elite. So in theory. A t shirt, right? That retails on your site for fifty bucks, which is again, we know the supply chain, the cotton's American. It's spun in four different factories. It's made in a in a facility North Carolina. The cost of that

could go down. considerably if you had, you know, a factory that could that was On order to produce Two hundred thousand of them? Yeah, I mean I I could produce a great quality hundred percent cotton T shirt that you would love.

That would retail for Fifteen bucks or less. Made in the U. Made in the US. Entirely domestically of great quality. Wow. Yep. That that's the that is the impact of and and the the thing is is what we need is we need a

retailer or a brand to step up and lead. So I mean What kind of impact can consumers have on this? I mean if if consumers make the decision to instead of buying, you know, four shirts at H M, buying one shirt that's American made, they could have a significant impact on how

Big retailers. Behave? Well I think there are There are a number of constituents that are gonna impact domestic manufacturing. Consumers are the least important in my mind or should bear the least responsibility because

As we keep talking about, there are many, many, many customers out there that don't have the luxury to spend forty bucks on a T shirt. Yeah. And I don't want to be in a position where we're asking someone like that to make trade offs that they otherwise may not be able to do. I think the people that really play roles are brands like American Giant or You know, pick any other brand that you may admire.

Are they trying to have some values component and to be clear If you make stuff in the United States, you get the human rights benefits, the environmental benefits, the worker safety benefits that are baked into domestic law. In a way that if you make it somewhere else, like Bangladesh or China. There are nowhere near the levels of protections for those brands. No matter what greenwashing may be coming from those brands, there's nowhere near the level of protections there.

So to lead with values that they Instagram about to apply those into actual supply chain decisions. That's one group. The retailers. particularly the big retailers out there. have a huge role to play. Um between whether they're gonna be helpful in this regard or or not. And then the third are policy makers.

If you think about let's just pick an example, car fuel efficiency. We we we make decisions to say we're gonna ratchet up fuel economy standards over time. Our policymakers could easily be doing a similar thing with constraining a little bit. where we allow our brands to manufacture based on some criterion that we can agree on, like human rights records, living wage, environmental standards.

Um we do a really inadequate job to do that. But I think those are the three most important ones, probably in this order, probably policymakers number one. uh probably retailers number two and brands number three and then consumers I think are fourth and and the least important because I think consumers have gotta act rationally and and they should. Bayard, when you think about the journey that you've been on, right, and and where the brand is today. And you know, its future, right, where it's heading. How much of

where you got to today do you attribute to to the hard work and the grind and and how much Do you think has to do with getting lucky, you know, people being interested in craft made goods and you know Meeting Miguel and just

what do you attribute your success to? Yeah. I mean I it's a good question. I I think It took me a long time to realize this guy. Um I think you and I have talked about this off the air that it took me, you know, into my fifties. to realize the importance of affiliating with and working with people that I like that I think of good values. And so I think that that's mattered a lot because I've surrounded myself thankfully rather a bunch of people that wanna have an impact. that have a sort of nonpartisan patriotism in them.

And so I I think that's helped. It's kind of got me into a ecosystem of people that are good and are trying. But I boy do I attribute a lot to luck. you know, meeting Paige Ashby or uh having Farhad write that article or having you introduce me to Miguel or whatever it might be.

Uh, those are just h hard not to contribute those to Lucky to be at the right place and the right time. Hard work helps, you know, all those other things help. Great product helps. But you know, look I think anyone that tells you otherwise is lying. I think luck plays such an important role in in any A company's success.

that's Bired Winthrop, founder and CEO Of American Giant. And by the way, if Bayard's name sounds a little familiar, like you might have heard it in a history book somewhere, Well that's because he's actually a descendant of John Winthrop, the first governor of the Massachusetts Bay Colony.

Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And don't forget to sign up for my free newsletter at guyros.com. This episode was produced by JC Howard, with music composed by Ramtina Rablui. It was edited by Casey Herman with research help from Catherine Cypher. Our audio engineer was Robert Rodriguez. Our production staff also includes Neba Grant, Alex Chung, John Isabella, Elaine Coates, Carrie Thomson, Chris Massini, Carla Esteves, and Sam Paulson.

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