Gone Are the Days…
Spread out that spring wardrobe budget this year, cause the price of clothing is on its way up,up,up!
You may feel your wallet a little lighter when shopping for your spring wardrobe this season. It seems the less you buy, the more your spending, and all of a sudden that summer wardrobe budget has run out! Probable that the cause of this is the rising prices of clothing that are on their way up this year. According to an article in WWD by Kristi Ellis on Thursday February 17 2011, clothing prices have rose 1 percent in January as compared to the month prior. The idea of clothing prices going up is causing discomfort in the industry because retailers are unsure whether or not consumers will easily adjust to the price changes. In the WWD article written Thursday February 17 2011, by Kristi Ellis they quoted John Lonski, chief at Moody’s Capital Markets Group. “I think what we’re going to find is that manufacturers and retailers will perhaps continue to attempt to increase apparel prices in response to sharply higher materials costs, as shown by the latest surge in the price of cotton. Whether or not these price increases will stick is problematic. We may well find the consumer will balk at paying significantly higher prices for apparel, and if the consumer cuts back on purchases of apparel, owing to higher prices, unsold inventory will mount and that will ultimately put downward pressure on apparel prices.”
The reason for the inflating clothing prices is because of the shortage of cotton for the last year, which has made the cost of buying cotton almost double. Floods in China, Australia and Pakistan damaged the cotton plants from all of these major exporters. India also restricted much of their cotton export to protect their own supply. Factors keep driving up the cost of cotton to the fashion manufacturers around the globe and now consumers are forced to relieve those financial scars. Alternatives have been considered and used for 2012 fabrics, cotton blends mixed with synthetic fibers, and other fibers such as linen and viscose. Wool prices have also increased by approximately 40 percent over the last year as well, although it “hasn’t seemed to affect the business yet ,“ says Martin Aveyard, design director at a vertical British woolen mill Abraham Moon in Tuesday February 22 2011 article in WWD written by Katya Foreman and Joelle Diderich. “In fact, people are placing orders earlier as they are worried wool prices will increase, and they probably will.”
With the rising cotton and wool prices, consumers will soon notice a rising price in the finish goods they are purchasing. Rick Darling, president of LF USA says in Tuesday march 8 2011 WWD article by Kristi Ellis, “the industry is coming out of a 30-year period of price deflation on the wholesale side, driven primarily by China’s market entry, which had major impact on lowering labor rates around the world.” Darling continued, “That day is over, Last year marked a complete turnaround… when China started to encourage significant increases in labor and that is going to continue, in our opinion, in the foreseeable future.” The retail world is preparing itself for some lost sales because of these growing prices. With the higher cost of raw materials and labour eventually the consumer will have to deal with the higher cost of purchasing the end product. We as a society are not used to paying more for clothing because of the deflating costs over the last 30 years, but now is the time and it may be a struggle at first, for everyone to adjust.
The recent rising cost of oil may pose more issues for the apparel industry. As gas prices rise the cost of transporting inventory will increase as well. Oil is now over 100$ a barrel and so a drastic increase in the cost to ship product to its stores and warehouses will eventually affect the cost of the end product for consumers if these high oil prices continue. These rising costs seem to be driving up the cost for more than just the apparel industry, food prices are expected to rise as well and the price of the coffee bean has doubled over the last year. These costs all affect the consumer and they will be feeling the wrath of these increases throughout the 2011 year. Costs of cotton, wool, raw sugar, and oil are driving up the price the retailers are charging. Tim Horton’s is expected to raise their prices this spring as well due to the rising cost of coffee. It is still early to tell how consumers are going to react to these increases, but if their reactions are anything like the reaction to the gas prices, which are at a 29 month high in Toronto, as reported at businessweek.com on March 8 2011, then retailers may be stuck in a rock and a hard place. The possibility that consumers may purchase less, especially since inelastic products such as gas and food are increasing, apparel may take a backseat to these other items for consumers. Clothing may become less important and the price increases may not be well accepted by the Canadian consumer along with all the other price increases they are going to have to face this year. Retailers may have to come up with alternative solutions to try and fix this problem and keep people shopping in 2011.
So what does this say for the fashionista’s of the world? Looking into alternatives to try and spread out the wardrobe budget. Reuse and recycle older pieces with new pieces to get the seasons look, or maybe try some vintage shopping. Picking out your favourite trends of the season rather than every trend may help the wallet as well. Less frivolous spending, and a bit more caution with your spending can allow for your money to go a little farther, buying timeless pieces can last a lifetime.