How a made-in-America brand is dealing with the Covid-19 pandemic
25 MARCH 2020
Bayard Winthrop, CEO of American Giant, is working to maintain partnerships with suppliers while pulling back on marketing outreach.
Retailers with local supply chains are at an advantage during the Covid-19 pandemic as disruptions hit global manufacturing infrastructure.
San Francisco-based apparel brand American Giant, wholly manufactured in the US, is working directly with partners to navigate the pandemic.
Uncertainty remains: online sales have dropped 40 per cent, and the brand has paused hiring and store openings.
Bayard Winthrop, founder and chief executive of apparel company American Giant, has been taking calls in his new San Francisco office: the driver’s seat of his black 2017 Toyota Tacoma truck. Parked within reach of his Castro home’s Wi-Fi network, his laptop sits on the centre console, and his phone connects to the car’s hands-free speaker system. His three kids, aged three, five and nine, remain inside the house with his wife, Alice.
Winthrop’s car has become a central point for the company during the coronavirus crisis in the US. The brand’s San Francisco employees began working from their homes last week with the city’s shelter at home orders. Its stores closed in the following days. With uncertainty ahead, the shape of the American economy has changed almost overnight, and government and medical directives and consumer behaviour have evolved rapidly. In addition to San Francisco, cities including Los Angeles and New York City are also sheltering in place.
While its e-commerce store, which is responsible for the majority of its sales, remains open, American Giant’s online sales have plummeted 40 per cent since the outbreak began to spread in the US. That’s left him to reconsider production levels and work with US-based suppliers to come to a mutually agreeable solution.
All over the world, company leaders are reevaluating their businesses, managing remote work and moving to cut losses or shore up operations amid coronavirus disruptions. Retailers and malls from Harrods in London to Printemps in Paris are expected to remain closed for weeks; brands including Chanel, Armani, Burberry and Ralph Lauren have cancelled or postponed shows and events, and companies including Prada and Inditex, owner of Zara, are reporting a steep downturn in sales amid the distractions of Covid-19.
While global supply chains are suddenly interrupted and unpredictable, the US’s apparel manufacturers are, for now, operating fully. American-made brands are finding that close relationships and proximity to suppliers and manufacturers — and their ability to be nimble with turnaround times and transportation — are helping manage the economic shock.
The perks of local production
Kristen Fanarakis, founder of Senza Tempo, a fashion line aimed at professional women, says she isn’t cutting back on orders from the factory she works with in Los Angeles to protect the factory, where she says workers are following social distancing rules with tables moved six feet apart, and a doorman in the building controlling entry. The factory has been making face masks with deadstock fabrics and donating them, she says, to fill in between client projects.
“The atelier is still running, and I haven’t pulled any of my planned production because whatever I make will be in style in three months or three years,” she wrote in an email. “Having a front-row seat to the economic meltdown of 2008 and retail haemorrhaging during that period left a deep impression on me. I knew that I needed to find a creative way to better insulate the business from inevitable economic risks. The entire model enables me to be more nimble than I otherwise could be.”
Los Angeles Apparel, an LA-based factory that employs about 475 workers, has switched a large portion of his production facility over to sew cotton face masks, which are priced at $10 retail and $5 for wholesale, says Dov Charney, the factory’s owner. Despite the demand for them, the first masks the factory made were not FDA-approved, he says, but he said he is securing more functional materials, such as an antimicrobial wash, and is in conversations with the US Department of Health and Human Services regarding standards.
The factory is hiring workers to keep up with demand, while working within health restrictions, including taking workers’ temperatures several times a day and practising social distancing, according to Charney. (Charney is the former founder of American Apparel, where he was ousted in 2014 amid allegations of financial management and sexual harassment. He denies the allegations.)
At American Giant, as Winthrop calculates production levels that make sense under the circumstances for American Giant’s hoodies, sweatpants, T-shirts and other US-made comfort clothing, he has reached out to 15 of his company’s main suppliers to ask for their flexibility in shifting or cancelling deliveries. “Every one of them was saying, we are standing ready to be helpful. We’re in this together,” Winthrop says.