Denim Killer: American Giant just created the first real leggings designed to replace your jeans.

A common theme among today’s top modern luxury companies is the proclivity to take things one step at a time. In fact, this very characteristic might be modern luxury’s most significant divide with the fashion world. Pure fashion companies fetishize seasonal collections and constant newness; modern luxury brands generally favor months of R&D on prototypes before they’re individually released, and often avoid doing seasonal collections altogether. At a modern luxury company, once a product is put out to market, they’ll continue to chisel away, almost obsessively, as they refine, improve, and modify — all in full view. The idea is to bring each product as close to perfection as possible before embarking on other new ones.

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Of all the young brands that have emerged within the last decade, San Francisco-based American Giant (AG) might be the epitome of this line of thinking. Since its debut in 2012, CEO Bayard Winthrop has played his cards brilliantly, using the brand as something of a Skunkworks workshop to rethink casual wardrobe staples, and modify them in order to solve problems. It’s possible that Silicon Valley has rubbed off on AG. Like its tech firm neighbors, the brand approaches product development from a critical thought process: “What problems need fixing, and how can we make our products better than what’s currently on the market?”

Mr. Winthrop, then, has built a modern luxury clothing firm that is the opposite of a fashion company. He avoids the practice of flooding the market with new items merely to stay top of mind. In the process, he’s molded AG into a simple, unpretentious brand, and one that’s devoted, before all else, to online sales.

Today it is unmistakably successful. AG first caught fire shortly after launching with its men’s full zip hoodie. Rather than pushing yet another hoodie onto shoppers, AG sought to upgrade the form. It used a robust, heavyweight 100 percent cotton fabric as the canvas. It featured a modern, slim fit, and was durably constructed with features like reinforced elbow patches, and a double-lined hood to combat the chill. It was fully sourced and made in the US. And at $89, it was relatively expensive for what it was, which certainly helped to raise the standing of the product.

Mr. Winthrop and the AG team essentially elevated the full-zip hoodie from a slacker culture signifier into a high-quality piece of comfortable clothing that you wanted to tell your friends about. “The hype around this hoodie seems absurd,” one customer famously admitted. “But once you try it on, the quality really does take you by surprise.” It aligned perfectly with the rising desires of the market, and became a hot seller after a Slate writeup went viral, bringing in over $600,000 in sales in just 36 hours.

Mr. Winthrop declined to reveal current financials, but by all accounts, the company has been on a tear since the 2012 Slate report. To get a sense of its size, consider this: It produces around 10,000 full-zip hoodies each week alone. At a price range between $49 and $89 — and assuming these hoodies are all sold each month — AG is likely hovering in the $30-$45 million range per year in hoodie sales alone.

Today, Mr. Winthrop and his team have two big announcements to for us. First, they’re announcing their holiday partnership with Bloomingdale’s, which marks their first ever retail partnership and their first experience in a brick-and-mortar setting. Mr. Winthrop says that he’s been a Bloomingdale’s fan for quite some time, and when presented with the opportunity to partner with them, he jumped at the chance. “In my mind, they represent the best of the curated department store experience, delivering the best product out there to mainstream customers,” he told us. The arrangement lasts through the holidays, and there are no plans beyond that time for something more permanent with the retailer.

Still, it bears mentioning that Bloomingdale’s has itself ramped up their support for modern luxury brands of a certain type this year. Already, it’s partnered with LA-based Combatant Gent, and New York-based Knot Standard (both are contemporary men’s tailoring firms) by unveiling Bloomingdale’s shops-in-shop for both brands within the last month. These are modern luxury brands on the accessible and mass-interest side of things, rather than the purely niche. And given that pattern, the AG deal makes plenty of sense.

But while the Bloomingdale’s news a sign of the brand’s progression, it is the second half of AG’s two announcements today that we find most compelling. They’re unveiling a new workshirt, a new waffle henley, and a brand new pair of leggings. And within this product lineup, it is their new leggings, called The Pant, that we believe to be the most important talking point in AG’s news.

American Giant’s new denim killers.

We have been skeptical and sharply critical about the yoga pants market for some time now. We believe it’s far too easy for brands, both old and new, to latch themselves onto the tail end of the current activewear trend and release a standard pair of yoga pants that the market simply doesn’t need. The fabric is easy to source, and its stretchy nature is more forgiving, meaning that it takes little technical skill to produce a pair of leggings. Furthermore, since most leggings are designed for the gym the art of wearing yoga pants outside of the studio and into the office often feels like forcing a round object in a square hole.

It seems that Mr. Winthrop too has noticed this issue. Not one to rest on his laurels, and demonstrably eagle-eyed when it comes to spotting opportunity, he sought to offer a solution. The leggings market is bifurcated, he says, and leaves a lot to be desired. At the top end, prices are overly expensive, bordering on unreasonable (they’re ultimately still just leggings, after all). And at the low end, the quality is horrendous: poor fits, fabrics, and construction are standard — par for the course in fast fashion).

“To correct this problem and introduce something we felt great about, fabric and fit had to distinguish the program,” says Mr. Winthrop. “The ponte fabric we used is expensive and technical and really responds to the body’s form. The fit is comfortable and covering so that women feel like they don’t need to compensate with a longer top to feel secure.” As with every AG product, the testing process was rigorous. “We used something like 65 testers over many months to make sure we nailed the product across sizes and shapes,” he says.

With their new non-athletic leggings, AG seems to have found the answer to the denim versus yoga pants dilemma. The Pant is fully wearable on its own — a perfect jeans replacement that rids the look of a halfway-in, halfway-out feel that yoga pants so often give. According to AG’s description, they’re intended to be the “‘best-of-all-worlds’ stretch pant. Something that combined the comfortable feel and mobility of a compression exercise legging, with the polish, substance and shape of a street pant.”

The AG Pant, in other words, has a reason to exist — and it’s not to usher in some flashy new design. There’s real function at play here. And we would not be surprised to see these fly off shelves this winter.