The insane popularity of a single sweatshirt has forced its maker to expand into four new factories within the last year just to meet the soaring demand.
The zip-up hoodie, made by San Francisco startup American Giant, costs $89. It had been on the market for 10 months when a December 2012 Slate article declared it "the greatest hoodie ever made" and suddenly sales exploded.
The pace of growth was so rapid that backorder waits grew to as long as four months. But people continued placing orders regardless of the wait.
At the time, American Giant had only one factory in Brisbane, Calif. The company has since expanded into a factory in Los Angeles and three more in rural North Carolina, just outside Raleigh.
"We've been chasing demand the entire year," American Giant CEO Bayard Winthrop said in an interview with Business Insider. "In September, we were finally back in stock — and then the rate of buying went up by four times."
With its expansion into new factories, the company has begun selling t-shirts, sweatpants and a women's line. In the meantime, demand for the sweatshirts hasn't slowed. The hoodie is currently sold out of most sizes and colors.
“We are absolutely throttled down on manufacturing,” Winthrop said. “We are maxing out all of our capacity at all of our factories. As much as they can give us, we are taking.”
So what's so great about this hoodie, anyway?
For starters, it appears to weigh more than two pounds. The fabric, which is 100% cotton, feels about three times thicker than most sweatshirts. And ribbed paneling along the shoulders and sides help create a tailored look, eliminating the boxy silhouette of most hoodies. Bayard said he spent about eight months designing it with the help of former Apple engineer Philipe Manoux and world-renowned pattern designer Steve Mootoo.
Customers appear to love the quality and fit, calling it “shockingly well made” and “absolutely fantastic” in dozens of reviews on American Giant’s website.
“This sweatshirt is seriously worth the wait, and awesome for the price, too. I'm considering ordering more to stock up for the rest of my life, but I'm not sure this one is ever going to wear out,” one reviewer wrote.
Another said: “The hype around this hoodie seems absurd. But once you try it on, the quality really does take you by surprise. It's unlike any hoodie —or any other piece of clothing — I've ever owned. A must-have.”
An equal — if not even bigger — draw to American Giant’s apparel over the fit and quality is that it’s all made in the U.S.
The company advertises that it’s “bringing back American manufacturing” and pledges to never outsource jobs overseas. It can afford the higher labor costs in the U.S. because it is a direct-to-consumer business and therefore avoids expensive overhead associated with brick-and-mortar stores.
To keep costs down, Winthrop said he doesn’t plan to open any pop-up shops, like many e-retailers have done. He also hasn’t made any investments in major marketing campaigns. He said the sweatshirts have all been selling by word-of-mouth. The company offers $15 for referrals to help that process.
“One of the great unspoken, dirty secrets about the apparel industry is that brands for the last 40 years have been investing a tiny amount in the product to sustain huge marketing and huge distribution costs,” Winthrop said. “In American Giant’s case, we do almost the exact opposite of that.”
Looking ahead, Winthrop said he plans on sticking to the basics: t-shirts, jackets, hoodies and sweatpants.
“When we think about next year, just being in stock — not expanding the product mix — but just being in stock will be a huge lever up for us,” he said.
Original Post from Business Insider found here:
Dec. 5, 2013, 11:06 AM