NEW YORK – Clothing industry analysts predict clothing prices will rise 50% in the coming months.
Shoppers across the country are gripped with fear. Analysts predict that clothing prices will rise at least 50% in the coming months.
As the world economy recovers and demand for goods rises, a surge in labor and raw materials costs is squeezing retailers and manufacturers who have run out of ways to pare costs.
Shoppers are starting to panic. There’s already been a run on many stores in the south, including this Wal-Mart in Atlanta:
Cotton has more than tripled in price over the past year, hitting all-time highs. The price of other synthetic fabrics has jumped roughly 90 percent as demand for alternatives and blends has risen.
Brooks Brothers’ wrinkle-free men’s dress shirts now cost $138, up from $79.50. Levi Strauss & Co., Wrangler jeans maker VF Corp., J.C. Penney Co., Nike and designer shoe seller Steve Madden also plan increases.
More specifics on the price increases are expected when clothing retailers such as J.C. Penney Co. and Abercrombie & Fitch Co. report financial results this month.
Higher costs also will affect how clothes are made. Clothing makers are blending more synthetic fabrics like rayon and designing jeans with fewer beads and other embellishments. Shoppers also will have fewer color choices.
Some clothing makers will be recycling clothes from second-hand stores.
Retailers fear that higher prices will nip the budding demand. Stores that cater to low- and middle-income shoppers will have the hardest time passing along price increases.
Shoppers are already rebelling:
“‘I’m not going to spend any more than $50 for a pair of jeans,” said Vinny Vizmans, a stay-at-home Dad shopping at The Garden State Plaza in Paramus, N.J., last week. “I’ll wear the ones I got for years if I have to.”
Cotton prices began soaring in August of 2010 after bad weather cut harvests in major producing countries including China, the U.S., Pakistan and Australia.Restrictions on exports from India, the world’s second-largest cotton exporter behind China, have also produced cotton shortages. On top of that, worldwide demand for cotton has risen as the global economy improves.
Raw materials account for 25 percent to 50 percent of the cost of producing a garment. Labor ranges from 20 percent to 40 percent, depending on how complicated it is to make, Bassuk said.
On the production side, many Chinese factories that shut down temporarily in the depths of the recession still haven’t returned to capacity. As they ramp up, they’re finding they have to pay workers more because of labor shortages.
Some shoppers, better get out there now and get your clothes before the prices soar!