Sunday, August 14, 2022

FTC Takes Action Against Apparel Retailer Lions Not Sheep for Made in USA Labeling Fraud

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The Federal Trade Commission (FTC) found that apparel company Lions Not Sheep purposely mislabeled its products as “Made in the USA” when they were really imported. Photo via FTC

The company had slapped Made in USA labels on Made in China products, and its founder even talked about it on video.

Browsing the website of Utah-based apparel retailer Lions Not Sheep, you get the sense that the company isn’t just selling clothing, it’s selling a lifestyle — and a patriotic one at that.

Models look tough, many sporting tattoo sleeves and decked out in T-shirts and tank tops. Everyone is in great shape. There are a lot of American flags in the photos and products.

“You have two choices, to lead or be led,” the company writes. “We are a generation of leaders. We are a generation of lions.”

But according to the Federal Trade Commission (FTC), Lions Not Sheep also deceived consumers, selling products that were labeled at Made in USA but really manufactured in China. And this week the FTC took action, issuing a proposed order that includes a $211,335 financial penalty and requiring Lions Not Sheep to stop “making bogus Made in USA claims” and “come clean about foreign production.”

The FTC has rightly strengthened its Made in USA enforcement in recent years, and has taken action against several companies that have mislead customers, including big names like Williams Sonoma. But this case has an interesting twist, because the founder of Lions Not Sheep talked about it all on video.

On Oct. 8, 2020, Sean Whalen posted a 4:16 video of himself titled “MADE IN AMERICA”, with a Chinese flag emoji, the FTC reports. Then he proceeded to note that to make “Made in USA” claims for products, “marketers should substantiate their products are ‘all or virtually all’ made in the USA.”

Via the FTC

Then he does something sort of incredible. From the FTC’s report:

“Whalen explains he sources tshirts from China, screens them in the USA, folds them into bags in the USA, and then sends them to U.S. consumers. He states, ‘So our shirts are made in America . . . But those shirts are made in China, just like damn near every single made in America shirt you’re wearing is. This is how it works.’ Respondent Whalen closes by stating he could conceal the fact that his shirts are of Chinese origin by removing origin tags, but to do that he would have to ‘charge you more for the tshirt ‘cause I gotta pay the manpower and the labor to f—-g tear the China tag off and put the America tag on. Which maybe at some point in time we do . . . God bless American-made products; God bless China; God bless the entire f—-g world.’”

Wait, there’s more! Here’s the FTC:

“From May 10, 2021 through October 21, 2021, Respondents removed tags disclosing appropriate foreign country of origin from shirt products and printed “Made in USA” at the neck of the shirts…”

It’s worth taking a step back here to counter something Whalen said in his video: It’s just wrong that every shirt labeled Made in America is Made in China. While 97% of apparel purchased in the U.S. is made overseas, there is still 3% that is legitimately manufactured here.

And those truly Made in America brands deserve a whole lot of credit. American Giant built an entire supply chain from scratch to make its products, which include T-shirts; All American Clothing, All USA Clothing, Goodwear, and American Roots (which is even union represented!) are just a handful of the companies that come to mind that make T-shirts in the United States. There are many more.

These companies could offshore their production and cut costs, just like countless other apparel makers. But they purposely have chosen to manufacture here. That requires these companies to follow much stricter labor and environmental guidelines and overcome other hurdles.

Consumers looking for a Made in USA label are aiming to support these companies for manufacturing in the United States — creating jobs and boosting local economies — and even are willing to pay extra money for American-made products.

But Whalen wasn’t a lion, leading the way by creating new factories and supply chains like the companies listed above. He was a sheep, following everyone else in importing products from overseas.

Made in USA deception is just so infuriating. Companies like Lions Not Sheep know that a Made in USA label has marketing power, but they don’t want to do the hard work to actually manufacture locally.

Their lies are hugely unfair to the companies that are making things locally, and hugely unfair to the customers who are trying to use their money to support American manufacturers and workers.

Bravo to the FTC for taking action in this case. We hope the agency continues to investigate and take action when companies deceive consumers about Made in USA — especially considering most aren’t likely to admit to it on video.

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Christine
Christine has always been fascinated by the industrial world. She comes from a family of industrialists and has always been surrounded by machines and factories. When she was younger, Christine would often sneak into her father's office to watch him work on his designs. She loved the way he could take something and make it better. Now Christine is following in her father's footsteps, working at an industrial company that builds machines for factories all over the world. She loves her job and finds satisfaction in being able to improve production lines and help companies become more efficient.
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