Back in December, Slate’s Farhad Manjoo wrote about apparel company American Giant, who, he said, were undeniably manufacturing the greatest hoodie right here in America. Unfortunately, American Giant was not prepared for the attention.
The company slapped up a pre-order page on its blog, promising delivery in a few weeks’ time. Orders kept piling up. “We sold out of all of our January allotment, all of our February allotment, all of our March allotment, and to this day orders are pouring in, every day, like clockwork,” Winthrop says. Eventually the orders completely overwhelmed American Giant’s capacity to make and sell new hoodies—and it was at that point, Winthrop says, that he had to make a big, expensive decision about whether to permanently restructure the business.
To understand this decision, it helps to know the three-step process for making an American Giant hoodie. First, raw cotton gets knitted into spooled fabric, a process that takes about 50 days. Then the fabric must be finished and dyed, which takes about 15 days. Finally, the fabric is cut and sewn into a finished product. This last step takes about 45 days. In total, then, American Giant’s pipeline—the time it takes from ordering raw material to getting a bunch of sweatshirts—is about 3 1/2 months long.
And that gets to the key reason why American Giant’s stuff has been backordered for what seems like forever. Like any business, American Giant has to constantly predict future demand, ordering fresh materials that will only be available for sale three months from now. My story sparked an immediate spike in demand, but, back in December, Winthrop had no way of knowing whether the demand would be permanent. Would people still be interested in American Giant’s sweatshirts in April just because some yahoo on Slate had praised them back in December?
An unfortunate problem to have for a company.