The co-founder of a Kiwi fashion label's furious at claims she's cheating customers.

A Spinoff investigation has found that local brand 'WORLD' sources some products from AS Colour, whose garments are made in Bangladesh and China.

Dame Denise L’Estrange-Corbet says that the article initially said that she cut the labels out of garments, which she claims to have denied to the website on Friday, three days before the article was published.

She told Larry Williams that The Spinoff has not apologised for their comments, and she is "absolutely" considering taking legal action against them. 

Earlier, she told Newstalk ZB that while they source t-shirts from AS Colour, she maintains the majority of their clothes are Kiwi-made.

"We are such enormous supporters of New Zealand made, but I just think 'why do I bother', because the media just want to rip you to shreds."

She says the brand is willing to make some changes in order to make sure customers aren't misled.

While the t-shirts contain a tag inside the hem that reads "made in Bangladesh"- price tags attached to them read "made in New Zealand".

Dame Denise claims the quote on the tag referred to the tag itself, not the clothing.

However, she says while she's never had any complaints, she's willing to compromise.

"I'll put a sticker over it. It's not a biggee, we've got 10 t-shirts per shop."

Dame Denise maintains 99 percent of WORLD clothing is made in New Zealand, only having to go offshore for t-shirts because they had no other choice.

She says they were forced to make the decision when New Zealand's only t-shirt factory closed down seven years ago.

"Very soon we won't be able to make in New Zealand any longer, and that is the way it's going."

She says she's met with the Prime Minister to discuss how to claw clothing manufacturing back from overseas.

Consumer NZ's calling fashion brand WORLD's labelling "misleading and disappointing".

CEO Sue Chetwin says that is grossly misleading.

'The bit of paper that is attached to the clothes says that it's made in New Zealand, and that's not referring to the item, that's referring to the bit of paper, and how would anyone know that was correct."

Chetwin says consumers don't mind paying the extra money if they think it's going towards the higher costs associated with manufacturing at home.

"But the reality is that some of these products, [t-shirts and sweatpants] which are actually very expensive, are not made here at all."

Chetwin says there's also the question on how much the brand is marking up their prices.

LISTEN TO DENISE L'ESTRANGE-CORBET TALK WITH LARRY WILLIAMS ABOVE