The Breakdown: Why Does a Standard & Strange T-Shirt Cost $95?
In 2012, Standard & Strange co-founders Jeremy Smith and Neil Berrett opened a menswear boutique in Oakland, California — one that was dedicated to high-quality, high-craft garments from the U.S., Europe, and Japan. They were riding the high of the #menswear era, and when SPY first came to know Smith, in the late aughts, he knew more about manufacturing and materials sourcing than most anyone. Now, with another dozen years and a successful menswear shop under his belt, ask him about horsehide or buckles or weaving machines and he’ll shift from the tiny details to macroeconomics before you can say giddyup.
Today, Standard & Strange has shops in Oakland, Santa Fe, and New York that are, dollar-for-dollar, the best thing driving down the denimhead-workwear-rugged-craft-dude lane. The shop mostly carries third-party brands, but the company also has a handful of house-line goods, including its $95, blink-and-it-sells-out Wakayama Special Loopwheel Tee.
“Loopwheel is expensive as shit to make,” laughs Smith. “You have to pay for the building and pay the staff living wages to operate these amazing, sometimes 130-year-old machines, which are really slow.”
Smith took SPY through why the T-shirt costs what it costs — not just in terms of materials, manufacturing practices, and marketing, but why it’s exemplary of the Standard & Strange ethos.
Materials: $17.50
Smith starts with extra-long-staple cotton — a durable, premium fiber that, in his words, is “harder to grow and more expensive to harvest than what you get in a $6 tee from Amazon. It’s premium cotton alongside your Supima.”
High-grade cotton is essential for loopwheel knitting, a low-speed process run on vintage machines at one of two remaining loopwheel operations in Japan. First, the long fibers of the cotton have to be spun and combed to be ready to be made into the tubular, loopwheel fabric that gets cut and sewn into T-shirts.
“Loopwheel is not about efficiency,” says Smith. “If you want that, you give up character — the low-tension knit, repairability, and other intangibles that make it a lovely product.”
Smith buys the fabric for between $15 and $20 per meter, estimating that he gets 1.25 T-shirts per meter.
Sewing: $20
Then, the loopwheel fabric leaves the knitting facility and heads to a factory in rural Japan. Similar economics apply. The cost of living in rural Japan is significantly lower than in Tokyo, but Smith is still paying employees living wages to attract workers with a specific skill set.
Time spent cutting and sewing is fairly minimal — Smith estimates it takes 15 minutes to take the circular knit tubes of fabric and to cut and sew on sleeves and collars. Smith also notes that because of the low-tension knit of the loopwheeled fabric, the shirts need to rest for 24 hours before they make their journey to the States. And Smith has to pay for them to take up space for a day.
Shipping: $3
Shipping to the U.S. costs another $3 per shirt, give or take. Smith says that he could save money shipping on a boat, but he never has enough merchandise to fill a shipping container. Air freight from Japan, it is.
“I think the biggest thing that people don’t see is how much labor — how many hands have to touch the T-shirt — before it gets to you,” Smith says.
Retail: $45
Once the shirt arrives, the biggest costs are due to unpacking, photographing, modeling, web work, rent on the shops, storage goods, and, of course, staffing and online customer service. (Smith pays his workers a wage that allows them to live near the Standard & Strange stores. He also pays himself and Berrett a salary.)
“If you want to know a big reason why our clothes are expensive, part of that is literally due to my workers’ rent,” Smith says. “The American housing market is a speculative casino that’s totally outside my control. If I want my employees not to have to commute an hour each way by car, I need to pay them so they can afford to live within a couple of miles of the shops.”
For context, according to the Bureau of Labor Statistics, the average mean hourly wage in the clothing industry was $13.85. Smith pays his 20 employees — across shops in Oakland, New York, and Santa Fe — an average of $32 to $34 per hour. He also offers health care.
“Imagine if I paid $2 less an hour,” he says. “For 20 people, that’s another $80K I could put in my pocket. I could buy a house. Hell, why not make it $3 an hour, and then I could ball out? When you see heads of brands in Porsches, it’s often because they attack the cost of labor.”
Profit: $9.50*
Finally, once a T-shirt is sold for $95, it has cost $85.50. That looks like $9.50 in profit — in line with the 9-10% net margin that shops like Standard & Strange aim for — but there’s a catch. Two, actually.
Because Smith bakes salaries into the retail cost, the brand’s brass has already paid themselves, so instead of pocketing that net margin, they can reinvest the cash in the business, whether that’s more material or upgrading systems. They also add to their war chest in the event of an economic crisis.
“If we have some kind of economic event,” he says, “Fuck rent. Fuck everything else. We have to have four months of payroll on hand to support our employees as we get through it.”
Smith says Standard & Strange has to hit something closer to a 12% net margin annually before he or Berrett would take money out of the business.
“If your value system is based on taking care of people, art, and craftsmanship, then you want my T-shirt,” Smith says. “If I was in this to make money, I’d go pull an Everlane or shit.”
