Walmart, known for its rock-bottom prices, usually sells T-shirts for as low as $5 or even $3.60, competing with the cheapest retailers like Shein and Primark. Today, however, Walmart is making waves by introducing a T-shirt priced at $12.98—higher than most fast fashion retailers.
Launching just in time for the Fourth of July, the T-shirt is produced by American Giant, a direct-to-consumer startup renowned for its commitment to ethical American manufacturing and premium pricing. For months, the two companies have collaborated to mass-produce these T-shirts in the United States at a price accessible to the average Walmart shopper. The cotton yarns used in these shirts are slightly thinner than those in a typical American Giant product, but they are made using the same domestic supply chain, with cotton sourced from Southwest farms and garments sewn in factories in the Carolinas and California.
This collaboration is part of Walmart’s $350 billion commitment to American manufacturing through 2030, a move expected to create 750,000 domestic jobs. While large-scale production can help reduce prices, American-made clothing will never be as cheap as those from companies like Shein, which keep prices low through unethical labor practices and tax loopholes.
The relentless drive to cut clothing prices has led to overconsumption, accelerating climate change. Many consumers now view clothes as disposable, resulting in massive amounts of discarded apparel in countries like Ghana and Chile. By encouraging consumers to spend a little more on domestically made products, Walmart aims to reverse this trend, potentially influencing other budget retailers to follow suit.
American Giant’s Vision
Bayard Winthrop founded American Giant in 2011 out of a sense of nostalgia for the days when American-made clothing was synonymous with quality. Reflecting on his childhood in the 1970s, Winthrop remembers when American clothing was globally renowned for its durability and superior quality.
However, between 1990 and 2011, 80% of American apparel manufacturing jobs vanished as production moved to Asia, where labor was cheaper. Fast fashion brands like Zara and H&M capitalized on the burgeoning Chinese garment factories, pushing prices lower and forcing all competitors, including Old Navy, Forever 21, and Walmart, to follow suit by using cheaper, less durable materials such as polyester.
Winthrop sought to revive the tradition of high-quality American-made garments. He spent years building American Giant’s supply chain, partnering with local farms for cotton and investing in the few remaining U.S. clothing factories. Despite the higher labor costs and premium materials, which resulted in a T-shirt costing $50 and a hoodie $80, American Giant thrived due to the rugged and durable nature of its products.
Not content with his startup’s success, Winthrop believed that partnering with a larger retailer could amplify his impact on the fashion industry. Walmart, with its goal of revitalizing American manufacturing, turned out to be the perfect partner. “Our visions are so aligned,” Winthrop says. “Walmart understands that their customers are the same people working in American factories.”
Creating a $12.98 T-shirt
As Walmart strategized on expanding its manufacturing infrastructure, they noticed Winthrop’s efforts at American Giant. Walmart invited Winthrop to their headquarters in Bentonville, Arkansas, to discuss the challenges of domestic clothing production.
Winthrop identified scale as the primary hurdle. American Giant’s high prices stem from its small-batch production in a few local factories. In contrast, China’s sophisticated infrastructure can produce millions of T-shirts in a short time at low costs. For Walmart to produce clothes domestically, it needed to invest in the manufacturing sector.
This led to a partnership where Walmart would sell American Giant-branded T-shirts exclusively in its stores. Winthrop helped establish a network of farms and factories to produce these shirts. By using slightly lower-quality cotton and leveraging Walmart’s large order volumes, the price of the T-shirts was brought down to $12.98. “Supply chain partners are willing to take a lower margin if they are guaranteed revenue over time,” Winthrop explains.
The Cost Conundrum
The new T-shirts are now available at Walmart, with the retailer continuing to place orders. Winthrop hopes this will expand to other American Giant garments like trousers and jeans.
The question remains: will Walmart shoppers opt for these $12.98 T-shirts when cheaper alternatives are available? Despite the higher price, Walmart is promoting these shirts as American-made to appeal to customers’ patriotic sentiments and emphasizing their quality and durability to convey good value.
If successful, this initiative could disrupt the fashion industry. Winthrop hopes that other American retailers like Target and Old Navy will consider domestic production despite higher costs. “No retailer wants to be the first to charge more,” Winthrop says. “But if Walmart proves these T-shirts can sell, it shows consumers will pay a bit more for better quality American-made products.”
Ultimately, consumers’ willingness to pay a bit more could reduce overall clothing consumption, leading to a more sustainable industry. “Shein and Temu are so bad for the environment,” says Winthrop. “I hope this is a clarion call. Enough is enough. We can do this.”