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What does Pre-shrunk mean?

Also know as sanforization or sanforized, it describes pretreatment that ensures the garment will shrink less than 3% after being washed and dried.

Heddels explains Pre-shrunk

Fabrics usually stretch during production. Afterwards, during washing, the fibers “relax” and shorten to their original length, which can drastically alter the fit of a pair of jeans. Pre-shrinking eliminates this problem.

Travelling salesman Hal Burgess first employed the process in the 1970s when the hotel room where he was storing his jeans was flooded. He ended up washing the jeans in the hotel pool, where they shrank. Unfazed, Burgess simply sold the new, pre-shrunk jeans at smaller sizes.