The Truth Behind the “American” Clothing Manufacturing Industry

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This present sample essay is about a very popular hoodie from a few years ago – it was a standard zip-up number from San Francisco’s startup American Giant, selling for a whopping $89 a pop.

The "American" clothing industry and American Giant 

Its sales were propelled by a Slate article in which it was touted as “the greatest hoodie ever made” (as cited in Peterson). Since the outrageous demand for the hoodie began three years ago, American Giant has expanded into T-shirts, new “winter” colors, jackets, sweatpants, sweat shorts, and long-sleeve shirts for both men and women. The draw of the hoodie and the other apparel that American Giant creates is the durability, strength, warmth, and tailoring, which makes the fit more complementary to the average consumer (Peterson).

According to Bayard Winthrop, American Giant’s CEO, the hoodie is “shockingly well made” and required the design advice of Philipe Manoux (former Apple engineer) and Steve Mootoo (a famous pattern designer) (Peterson). Part of the appeal of the American Giant hoodie is, of course, that it’s made entirely in the United States. As companies are reshoring manufacturing plants all over the United States, and the demand for American-created products surges, startups like American Giant appeal more and more to consumers. But are all “American” companies using entirely American-produced materials in their products?

American Giant's buisness plan

American Giant’s website states:

“The apparel business is broken. Traditional apparel companies invest far more in distribution, real estate and marketing than in the product itself. To cut cost they manufacture off shore, and make products as cheaply as possible. At American Giant we invest in what matters to us and to our customers: high quality product, American manufacturing and exceptional service”.

The website notes the differences between traditional clothing manufacturer costs and those of American Giant, claiming that up to 80 percent of the clothing prices Americans generally pay is not for production, but things like rent at the store, insurance, staff payment, marketing, and branding (American Giant, “Why We’re Here”).

The “How It’s Made” portion of American Giant’s website is punctuated with actual film footage of cotton fields, manufacturing machinery, and employees sewing the quality clothing products it produces. American Giant claims that time, great design, attention to detail and the best fabrics and machinery are the secret to creating its unparalleled clothing products, as well as American cotton farmers, ginners, yarners, and sewers (“How It’s Made”).

American Giant's consumer base

According to Rebecca Otis of Salesforce.com’s Business2Community department, American Giants’ clothing line also appeals to the new digital and physical consumer; she cites its “quality, fit, comfort, and the can’t-live-without-it feel” as its main selling point. American Giant, in other words, passes the all-American clothing test – they create their clothing entirely in-country, although I’m sure some of the machinery they use is made in other countries – their website doesn’t say anything about that. But what about American Apparel? Are they truly as “American” as they claim to be?

American Apparel’s website states that their garments are designed, created, and manufactured in the “largest sewing facility in North America” (“About Us”). American Apparel is located in Los Angeles, and claims that its main basis for business is “that it does not, at its functional core, rely on the relentless pursuit of low cost labor to survive”.

So while American Giant is about the pursuit of locally-sourced, high-quality clothing, American Apparel’s goal is to treat its employees and clothing creators fairly and with respect (hmm – that’s unusual in today’s day in age), and turn a profit, of course! American Apparel is “sweatshop-free” meaning its workers are paid a living wage (“About Us”).

American Apparel supports free and fair trade, and it does have stores outside the United States, which helps create revenue streams that American Giant may not yet have a lock on. To reduce its carbon footprint, the American Apparel factory is located in a few square miles, ships products via empty space on passenger flights and busses, and recycles “almost all” its manufacturing waste – which it states is equal to “260 semi-truck loads per year” – as of 2014 the company claims to be “virtually landfill-free”.

Is the clothing really "American?"

American Apparel was established 15 years ago, and seems to be living up to its dream of sustainable, environmentally-sound, and American-made image. On the “Investor Relations” page of the website, however, the company states that it

“uses a vertically integrated business model which minimizes the use of sub-contractors and offshore labor.knitting, dyeing, sewing, photography, marketing, distribution, and design all happen in our facilities in Los Angeles”

which indicates that the company does receive some apparel pieces or materials from offshore labor facilities. While it does not elucidate on this subject – and why would it? – it can be assumed that it is not as American-sourced as some might be led to believe.

While American Apparel’s business model is admirable even if it isn’t entirely American-made, it appears that inside fighting among the company and its previous CEO Dov Charney might be causing the business to falter – in July of 2015 the company announced that it was laying off employees due to “nearly two dozen lawsuits” filed by Charney against the company -- $30 million needed to be cut over the following six months (Smith).

The company, according to Smith, had 239 stores and 10,000 workers as of July 2015, and “toning down the sexuality in the advertising” to include mothers and children. Charney, a company founder,  managed to be fired from the company twice and allegedly mismanaged it and committed sexual harassment; Charney has filed numerous lawsuits against the company – resulting in the company’s stock dropping to penny stock status (Smith). Walters of NPR noted that, prior to his leaving American Apparel, Dov Charney had “a reputation”: he is quoted as saying that he knew he was “going to rub some people the wrong way” even at an elementary school age.

Trouble in trading

Walters notes the nearly-naked models in American Apparel ads, the sexual harassment suits files, and cites “some serious trouble with Immigration and Customs Enforcement” (ICE) in his past. Charney is quoted as stating in 2013 that “There could be some products that could be made elsewhere, anywhere in the world…and it may come a time when my view of America may include Mexico City or Tokyo or Beijing or Jakarta” (Walters). Someone should tell Charney that clothing made out of the country would not be American-made. So, while Charney and American Apparel battled it out in the courts, the question of where the material used at the company is procured went by the wayside.

Dov Charney, as of January 27th, has lost his say in American Apparel, and lost his stake in the company entirely (Halzack). A bankruptcy court judge stripped Charney of all company association in the future and transferred ownership to the company’s lenders (Halzack). Sales for the company have declined since it filed bankruptcy in October of 2015, and its new CEO, Paula Schneider, stated that this is a result of typical merchandising errors, such as bad store locations and too much merchandise in those stores (Halzack).

Over 33 stores have been closed, and their employees let go – Schneider hopes to reform the company after it lost $300 million plus under Charney’s misdirection (Halzack). According to Halzack, “one of American Apparel’s strongest assets…[is that] its clothing is made stateside” and without Charney to interpret Jakarta, Tokyo, or Beijing as “American” countries, the company may still have a chance in the American apparel industry.

Another well-known “American” brand is American Eagle Outfitters (AEO) – who have never claimed to be designed or crafted only in the United States, but certainly make a lot of money off their “American” clothing brand. The company has over 1,000 retail stores nationally and internationally and sells clothing marketed to men and women aged 15 to 25 (Reuters). According to its corporate response “AE Better World,” AEO partners with apparel manufacturers in 19 foreign countries as well as some in the United States; clearly their clothing line is not entirely, or even mostly, American-made.

Social and environmental issues in the American clothing industry

On the subject of the “social and environmental issues” the company has observed in its global supply chain, AEO indicated that they are

“too complex, too widespread, and too deeply embedded for any one company to resolve working alone” (American Eagle Outfitters).

The company stated that it partners with the International Labor Organization and the Fair Labor Association, among others to make sure its clothes are made in a fair and safe manner for workers, while clearly placing the blame on those foreign countries’ social systems for anything that might happen to an employee (American Eagle Outfitters).

The irresponsibility of United States clothing brands, and others across the globe, show in the language of the American Eagle Outfitters’ website, and continue to plague the American clothing industry, as demonstrated in such past events as the Bangladesh clothing factory collapse that happened in 2013. More than 1,100 workers died in the eight-story Rana Plaza building collapse in Dhaka that year; clearly the building was an unsafe working environment to say the least. Many retailers had garments being created in the building, from Joe Fresh, which has made contributions to the families of those killed in the building.

A total of $40 million USD is necessary in order to compensate both survivors and victims’ families for loss of income and medical expenses from the disaster, according to O’Connor and the Clean Clothes Campaign. Among the companies who have not reimbursed or aided the families affected by the disaster in Bangladesh are J.C. Penney, Matalan (a British clothing chain), Benetton, and Carrefour (a French grocery chain second to Walmart in global retail sales).

Among the U.S. based companies who have not made donations are Cato Fashions, Grabalok, and The Children’s Place (O’Connor). While there are many reasons for making clothing in the United States, the safety and economic reasons far outweigh the costs in many Americans’ minds – why don’t clothing retailers think the same way?

The answer is profit and cost considerations. Of course,  there is always Etsy, a website dedicated to individuals selling their own creations, and home to many creative businesses who make quality products and sell them nationally and internationally. The importance of buying American continues to increase in the United States, and the impact on the economy was felt particularly strongly during the latest recession.

Illegal labor

Jobs going overseas were evaluated more thoroughly and some U.S. companies found that there were people willing to work for less or the same cost in the United States simply to have a job. The recession also made employers and government more aware of the need for reshoring jobs in the United States in order to help the economy along. 

According to the Institute for Global Labour and Human Rights (GHLR), 200 children aged eleven or younger at the Harvest Rich factory in Bangladesh were observed sewing clothes for Hanes, Wal-Mart, J.C. Penney, and Puma (Sachs & Goldsmith).The children stated in the report to GLHR that they were “routinely slapped and beaten, sometimes falling down from exhaustion, forced to work 12 to 14 hours a day, even some all-night, 19-20 hour shifts, often seven days a week, for wages as low as 61/2 cents an hour” – 30 cents less than what they claim would allow them to escape extreme poverty and live “with a modicum of decency” (as cited in Sachs & Goldman).

It is clear from reports such as this that there is a problem in various parts of the world with regulating the treatment and safety of workers, and even children, in factories which create clothing for American- and European-based retailers. The only way to be sure that a piece of clothing was made in the United States under good conditions and fair worker treatment is to conduct research into the company’s background and stance on offshoring clothing production. Even then one can’t always be sure, but greater corporate transparency and increased information access in the 21st century are all contributing to the honesty and forthrightness of American clothing retailers today.

Works Cited

American Apparel. “About Us.” American Apparel. American Apparel, Inc., 2012. Web. 29 January 2016.

American Eagle Outfitters. “AE Better World.” PDF. American Eagle. American Eagle, n.d. Web. 29 January 2016.

American Giant. “How It’s Made.” American Giant. American Giant, 2016. Web. 29 January 2016.

American Giant. “Why We’re Here.” American Giant. American Giant, 2016. Web. 29 January 2016.

Halzack, Sarah. “Battling Dov Charney was Just One of American Apparel’s Problems. Here’s its Plan to Fix the Rest.” The Washington Post. The Washington Post, Inc., 2016. Web. January 29 2016.

O’Connor, Clare. “These Retailers Involved in Bangladesh Factory Disaster Have Yet to Compensate Victims.” Forbes. Forbes, 2014. Web. 29 January 2016.

Otis, Rebecca. “Revealed: In 2016 Customers Want This.” Business2Community. Salesforce.com, 2015. Web. 29 January 2016.

Peterson, Hayley. “This Hoodie is So Insanely Popular You Have to Wait Months to Get It.” BusinessInsider. Business Insider, Inc., 2013. Web. 29 January 2016.

Reuters. “American Eagle Outfitters Inc (AEO.N).” Reuters. Reuters, 2016. Web. 29 January 2016.

Sachs, Benjamin and Goldsmith, Jack. “Children Found Sewing Clothing for Wal-Mart, Hanes, & Other U.S. & European Companies.” Harvard.edu. Harvard Law School, n.d. Web. 9 January 2016.

Smith, Aaron. “American Apparel Closing Stores, Laying off Workers.” CNN Money. Cable News Network, 2015. Web.  29 January 2016.

Walters, Amy. “Fast Fashions’ Challenge: Making Money with ‘Made in the USA’”. NPR. NPR, 2013. Web. 29 January 2016.