It’s been a slow and steady hand driving American Giant.
The San Francisco basics firm, which produces its men’s and women’s line in the U.S., has made a point of marketing itself as the antithesis of most e-commerce brands out there. The company, which sells only direct-to-consumer (save for a recent six-week holiday collaboration with Bloomingdale’s) hasn’t taken venture capital money, has no plans to build out a wholesale business and seems disinterested in brick-and-mortar retail, at least for the moment. It has instead kept its head down focusing on the rollout of new categories, the most recent of which is this week’s launch of dresses.
The rollout is modest at three stockkeeping units: a tank dress retailing for $48.50, T-shirt-inspired dress for $59 and maxidress for $69. All three are composed of slub fabric made in the Carolinas and cut and sewn at a third-party factory in Los Angeles.
The next three years will see continued expansion into categories such as accessories and bags.
“I think that we really feel like what we’re tapping into is a real desire for customers to have an apparel brand that is choosing to do things differently in the industry,” founder and chief executive officer Bayard Winthrop said. “It is important culturally and from a product standpoint, so I think with that point of view, we believe we have opportunity in a whole bunch of categories.”
The strategy entails a few things, the keys being that products are American made at a price point that doesn’t limit the brand to selling only to high-end boutiques, the executive said.
American Giant, launched in 2012, has gained traction with its domestic manufacturing story. It’s difficult to gauge just how large the business is. The privately-held company doesn’t disclose revenue, although Winthrop said sales have been nearly doubling every year, with 2017 “off to a very strong start.” The ceo also pointed to the three factories the company owns in the Carolinas, where two-and-a-half years ago it had none.
On the subject of profitability before interest, taxes, depreciation and amortization, Winthrop said there’s a good point to be made there as it relates to the brand and how the business is being built.
“We think about growth in a pretty narrow way, which is that we want to acquire our customers profitably and by profitably, [we mean] we want to have a high degree of probability that they’re going to be profitable for us,” he said. “We are happily losing money now, but it is within our control. It’s something we’re deciding to do and so that’s an important distinction in our mind.”
Another important point is the lack of interest in a wholesale business — beyond anything akin to what the company did with Bloomingdale’s, nor is there interest in selling to the imprintables market.
“We just think the wholesale channel is having some pretty profound and fundamental challenges with it that aren’t going away,” Winthrop said. “I’m pretty allergic to wholesale.”
The company has a physical store at its San Francisco headquarters, but even growing that channel is something that’s not at the top of the list of priorities. Winthrop acknowledged interest in physical retail as a way to the tell the brand’s story.
“I am not one of those people that thinks retail is going away. I think the days of 300, 400, 500 stores are pretty much over, but I think there will be an ongoing need for retail,” he said. “We feel like we’re doing something pretty important. When everyone else in the room decided to bolt and go overseas, we decided to go a different way.”
Does that mean more American Giant stores some time soon?
“We’re just frankly too busy with our current business to think about that at the moment,” Winthrop said. “There’s a time where we will, but even then I think that looks like 10, 20, 30 stores.”
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