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Just a few blocks from downtown Raleigh, North Carolina, on a narrow, nearly empty side street near the train tracks, there’s a 40-foot window in an expansive brick building. Peer inside on any given weekday and you’ll see roughly two dozen people busily at work on looms, fabric cutters, and die-cast sewing machines. It looks like a scene out of the 1950s. And while the business behind it, , is not that old, most of the machines are. “I had to rebuild all of them,” says Victor Lytvinenko, 33, the company’s founder. But first he had to learn how to rebuild them, which meant tracking down the retired workers, some of them in their seventies, who’d kept the machines humming before the apparel manufacturers started closing up shop in the 1980s and 1990s. “I drove up into the mountains and learned in their garages,” says the Raleigh native and former winemaker, who started sewing jeans in his apartment with his wife, 33-year-old Sarah Yarborough. “They were a part of the golden age of manufacturing, when people built this country.”

For the past decade or so, there’s been an explosion of domestic craft industries, everything from fly-fishing equipment (Montana’s ) to commuter bikes (Detroit’s ) to custom-built skis (Colorado’s ) to beer and spirits (too many to name). But Lytvinenko is among a new class of craftsmen reshaping one of the country’s most iconic industries: clothing. The list now includes companies focused on performance, like , which produces wool shirts and jackets in the Bay Area, and makers of casualwear, like ,  in Portland, Oregon, and San Francisco’s , whose cotton hoodie became so popular in 2013 that there was a four-month waiting list.

In the early 20th century, apparel manufacturing was one of America’s largest industries, employing an estimated two million people, and North Carolina was the epicenter. The state was one of the country’s biggest producers of cotton, and fabrics were spun at industrial-scale complexes like , which built four self-sustaining villages outside Greensboro to supply its factories with nearly 3,000 workers. The rest of the story is all too familiar: as economies globalized after World War II, 
companies found cheap labor and fewer regulations overseas. In the late 1990s, , which had long maintained a sizable U.S. workforce, closed 22 plants across the country, putting roughly 13,000 people out of work. By 2010, 98 percent of the clothing sold in the U.S. was manufactured abroad.

But the exodus of textile behemoths from North Carolina left an opening for small-scale producers to come in and literally pick up the pieces. In the past five years, aspiring denim makers found factories, machines, and skilled workers that were all going unused. The remnants of industrial cotton manufacturing became the raw materials for a new era of boutique apparel firms. The state is now home to facilities for American Giant; , which makes merino-wool socks for everything from hiking to mountaineering; and , which produces jeans, sweaters, shirts, and ties. Inspired by the growing market for craft goods, in 2008 Lytvinenko began selling his upscale jeans, which run anywhere from $225 to $385 a pop, in the company’s Raleigh store and online.

“Our initial target market was the people who shopped at Whole Foods,” says Lytvinenko. “I felt like they were willing to spend 20 percent more for something that is 100 percent better. There are a lot of people buying one pair of our jeans instead of two pairs from overseas.” His jeans are certainly more expensive—so are heirloom vegetables and small-label wines, he points out—but they’re made by hand with higher-quality denim. “Winemakers are producing something that tastes different each year,” he says. “We wanted to do something like that with jeans.” For his Jones Organic style, he convinced North Carolina farmers to plant the first organic cotton ever grown in the state, got nearby Cone Mills to spin the fabric, and made 200 pairs of jeans in his first run, which completely sold out.

That kind of dedication is paying off. Raleigh Denim nearly doubled its revenue each year between 2008 and 2013. And Lumina grew by 200 percent from 2012 to 2013. That’s in part due to Cone Mills. Its White Oak plant in Greensboro has been making some of the world’s most sought-after cloth since 1905, and it now supplies Raleigh Denim, Bluer, Detroit Denim, and Lumina with selvage denim, a material with a high-quality woven edge. “We actually found some abandoned shuttle looms in a field and restored them so we could keep up with demand,” says Delores Sides, director of communications for Cone Mills’ parent company, the International Textile Group.

Boutique producers know they can’t compete with the Gap, which can churn out a pair of jeans and sell them for $30. But that’s not the game plan. “We’re never going to be able to make a cheaper product,” says Lytvinenko, “but we can make a better product, and that’s where there’s room to grow. We’ve already seen that in other markets like craft breweries, coffee roasters, and chocolate makers. If you take out the middleman, you can start making something on your own.”