Clothing prices to rise 10 percent starting in spring
Monday, February 14, 2011
NEW YORK (AP) — Shoppers looking to update their wardrobes may find their money won’t stretch as far.
As the world economy recovers and demand for goods rises, a surge in raw material and labor costs is squeezing retailers and manufacturers who have run out of ways to pare expenses.
Clothing prices had dropped for a decade as tame inflation and cheap overseas labor helped hold down manufacturers’ costs. During the recession, retailers and clothing makers cut frills and experimented with fabric blends to keep prices in check.
But cotton has more than doubled in price over the past year, hitting all-time highs. The price of synthetic fabrics has jumped roughly 50 percent as demand for alternatives has risen.
Clothing prices are expected to rise about 10 percent in coming months, with the biggest increases in the second half of the year, said Burt Flickinger III president of Strategic Resource Group.
Brooks Brothers’ wrinkle-free men’s dress shirts now cost $88, 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 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 using more synthetics like rayon and designing jeans with fewer beads and other embellishments. Shoppers also will have fewer color choices.
Cotton has jumped to a 150-year-high, hitting $1.90 per pound on Friday. That’s more than double the price a year ago and just ahead of the $1.89 record during the Civil War, according to the International Cotton Advisory Committee. But the Civil War-era price isn’t adjusted for inflation, and the cotton group says it doesn’t have an adjusted figure available. The government inflation calculator only goes back to 1913, but at that point $1.89 had the same general power buying power as $41.63 does today.