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Gingersnap
02-14-2011, 11:20 AM
Clothing groups warn on cotton surge impact

By Jonathan Birchall in New York

Published: February 13 2011 19:31 | Last updated: February 13 2011 19:31

US clothing companies are warning of a jolt in consumer prices in the latter half of this year, affecting everything from socks to evening dresses, as the soaring cost of cotton ends a prolonged spell of price deflation in the sector.

Some US clothing brands have started passing on an initial wave of price increases in their spring collections, after last year’s initial escalation in cotton prices.

But the groups say they expect far sharper rises later this year as the surge in commodity prices moves through the production process and into stores.

Cotton hit a record high on Friday, topping $1.90 a pound amid a shortage of the fibre.

The cost of the commodity has risen 150 per cent since the start of 2010.

Efforts by manufacturers to reduce costs by switching to cheaper alternative materials have also led to sharp price increases in polyester and other synthetic fibres.

Wesley Card, chief executive of Jones Group, whose brands include Nine West and Anne Klein, told the Financial Times that after single-digit percentage price rises in some areas in the spring, consumers would be looking at “price increases pretty much across the board” by the end of the year, with percentage rises as high as double digits.

“It’s going to be relatively broad-based because it affects all denim, no matter what price point, all items including cotton and footwear as well,” he said.

Mike Ullman, chief executive of JC Penney, the mid-range department store, has said the company avoided price increases this spring but faces challenges in the autumn.

“If the cotton price is going to be double what it was a year ago, it will obviously affect retail prices,” he told the FT.

Executives say the clothing industry is as yet unsure about how consumers will react to price rises, after becoming accustomed to prices that have fallen steadily during the past decade due to the emergence of low-cost overseas production and the rise of China.

John Anderson, chief executive of Levi Strauss, said last week that it was too early to calculate the impact because “the consumer hasn’t had a chance to respond to those [prices] yet.”

Mr Card at Jones Group said price increases could vary from as little as $2 on a pair of low-cost jeans at a discounter to $15 on an $80 jacket at a department store.

“It is hard to see where the price elasticity is going to meet resistance at this point,” he said.

Financial Times (http://www.ft.com/cms/s/0/b2664d96-3799-11e0-b91a-00144feabdc0.html#axzz1Dx0OAe5l)

linda22003
02-14-2011, 11:22 AM
Time for a stock up trip at Eileen Fisher. :)

Gingersnap
02-14-2011, 11:31 AM
Time for a stock up trip at Eileen Fisher. :)

This could actually be a good thing in the long run. All this cheap labor has produced really low quality clothing over the past 10 years. If people pay more, maybe they will demand better quality at the same time. Maybe we can move away from "disposable fashion".

If things really change significantly, I'll consider upgrading my sewing machine next year. I've been toying with the idea for a few years anyway.

noonwitch
02-14-2011, 12:57 PM
I don't know. Clothes are cheap right now because they are moving to clearance faster. People don't buy clothes when the economy is bad, at least not expensive clothing in adult sizes. Why would the manufacturers raise prices on clothing if they aren't sure they're going to be able to sell it?

lacarnut
02-14-2011, 01:04 PM
Time for a stock up trip at Eileen Fisher. :)

I just stocked up on an ETF (exchange traded fund) for agriculture commodities (RJA) that includes cotton, wool, etc this am.

Inflation is getting ready to bite us in the butt.

lacarnut
02-14-2011, 01:11 PM
I don't know. Clothes are cheap right now because they are moving to clearance faster. People don't buy clothes when the economy is bad, at least not expensive clothing in adult sizes. Why would the manufacturers raise prices on clothing if they aren't sure they're going to be able to sell it?

Many raw materials like cotton have increased in price over 50%. Manufacturers can not eat that big of an upsurge in price. Crop failures due to very bad weather conditions this year, hoarding and demand are the reasons for the increases.

hoplophobe
02-14-2011, 04:43 PM
Glenn Beck was talking about this more than 2 years ago.

http://www.glennbeck.com/content/articles/article/196/9251/

Talking with the writer of this column:

Load Up the Pantry
http://online.wsj.com/article/SB120881517227532621.html?mod=googlenews_wsj

One interesting point he makes during the interview:

A number of the items that your family, a typical family is going to live on, things like, you know, spaghetti, dried spaghetti, cans of tuna fish, cans of soup, this kind of stuff, is rising in many cases by 5 or even 10% a year and there’s no particular reason to think that’s going to fall. In fact, it’s much more like — that rate of inflation is likely to increase. On the other hand you are keeping your money in the bank and you are earning 3% before tax if you are lucky. Particularly, you know, as a result of the subprime and all the rest of it, interest rates have come down. You are losing money in a savings account. You are falling behind inflation. You know, you get 3% before taxes, you are getting 2% maybe after tax and yet the things you need to buy have just gone up by 10%. You are running to catch the bus and the bus is speeding up.

Putting off buying jeans and shoes and other items? Buy them now and store it away for later use.

Rockntractor
02-14-2011, 05:31 PM
I bought enough military surplus work clothes this winter to last me several years.

Starbuck
02-14-2011, 05:33 PM
I just stocked up on an ETF (exchange traded fund) for agriculture commodities (RJA) that includes cotton, wool, etc this am.

Inflation is getting ready to bite us in the butt.

I don't think I caught on to this soon enough, and I'm afraid that RJA and it's cousins may not go as far as some think. I show, like, a 70% rise in RJA in a year, but maybe it'll keep on going.

I did get in on XLE (energy) and XME (mining and equipment) on time. I'm still sitting on them.....

Ya gotta do something to offset what's gonna crang us between the eyes.:)

fettpett
02-14-2011, 05:51 PM
I bought enough military surplus work clothes this winter to last me several years.

how do the pants hold up?

not that I could find them in my size :(

Rockntractor
02-14-2011, 05:58 PM
how do the pants hold up?

not that I could find them in my size :(

They hold up better than most and I am hard on clothes, most of what Iv'e been buying is German and Italian military from Sportsman's Guide.
I just bought thirty pair of these training pants, they are very comfortable.
http://www.sportsmansguide.com/net/cb/6-used-german-training-jackets-blue-lt-blue.aspx?a=336769

lacarnut
02-14-2011, 06:16 PM
I don't think I caught on to this soon enough, and I'm afraid that RJA and it's cousins may not go as far as some think. I show, like, a 70% rise in RJA in a year, but maybe it'll keep on going.

I did get in on XLE (energy) and XME (mining and equipment) on time. I'm still sitting on them.....

Ya gotta do something to offset what's gonna crang us between the eyes.:)

The Chinese are loading up on commodities and buying mining companies. So, I think they have plenty of room to run. Palladium (PALL)and silver(SLV) ETFs have almost doubled in the last year. Also, Denbury (DNR) is a fantastic energy company. They inject CO2 into these old wells which still have 40 to 60% left after they were capped. Gold and silver have not been to shabby the last 6 months either.

Madisonian
02-14-2011, 06:16 PM
They hold up better than most and I am hard on clothes, most of what Iv'e been buying is German and Italian military from Sportsman's Guide.
I just bought thirty pair of these training pants, they are very comfortable.
http://www.sportsmansguide.com/net/cb/6-used-german-training-jackets-blue-lt-blue.aspx?a=336769

I would have thought by now you were old enough to have graduated from training pants...

http://ecx.images-amazon.com/images/I/31dntwE3ddL._SS400_.jpg

Rockntractor
02-14-2011, 06:18 PM
I would have thought by now you were old enough to have graduated from training pants...

http://ecx.images-amazon.com/images/I/31dntwE3ddL._SS400_.jpg

I knew that was coming!:D

Madisonian
02-14-2011, 06:39 PM
I knew that was coming!:D
Figured you rather see it from someone like me than Poli.:p

Rockntractor
02-14-2011, 06:40 PM
Figured you rather see it from someone like me than Poli.:p

He is shameless, he/she will still use it!:D

fettpett
02-14-2011, 06:40 PM
Figured you rather see it from someone like me than Poli.:p

you got the wrong ones

http://instoresnow.walmart.com/uploadedImages/In_Stores_Now/New_In_Stores/1805_product_girls_kc_pullups.jpg

Madisonian
02-14-2011, 07:18 PM
you got the wrong ones

http://instoresnow.walmart.com/uploadedImages/In_Stores_Now/New_In_Stores/1805_product_girls_kc_pullups.jpg

If Rock is ecologically minded, there are always these...
http://www.seventhgeneration.com/files/images/products/large/prod_baby-training-pants_3t-4t_260x282.jpg

Chlorine free even.

Rockntractor
02-14-2011, 07:25 PM
If Rock is ecologically minded, there are always these...
http://www.seventhgeneration.com/files/images/products/large/prod_baby-training-pants_3t-4t_260x282.jpg

Chlorine free even.

Why would they put chlorine in them in the first place, wouldn't that give black babies white butts?:confused:

Starbuck
02-14-2011, 11:49 PM
The Chinese are loading up on commodities and buying mining companies. So, I think they have plenty of room to run. Palladium (PALL)and silver(SLV) ETFs have almost doubled in the last year. Also, Denbury (DNR) is a fantastic energy company. They inject CO2 into these old wells which still have 40 to 60% left after they were capped. Gold and silver have not been to shabby the last 6 months either.

Ooh, thanks. DNR just took off these past few days, didn't it? Maybe I'll get a chance to buy in when it settles a bit..........I just wish it wasn't DNR (Do Not Resuscitate:))

Enerplus,( ERF) pays a whopping 6.91% dividend, and pays it out monthly. That, and (PFF) with a 6.70% dividend also payed monthly anchors our portfolio nicely.

lacarnut
02-15-2011, 12:54 AM
Ooh, thanks. DNR just took off these past few days, didn't it? Maybe I'll get a chance to buy in when it settles a bit..........I just wish it wasn't DNR (Do Not Resuscitate:))



Yep and I bought it when it was around the $16 mark. I think it will keep going up because of the tremendous amount of oil that they are just starting to extract out of the old wells in the Delhi LA fields.

Apocalypse
02-15-2011, 09:11 AM
We have clothing manufacturers left here in the states? I had thought they all fled to China for the cheap labor.

Odysseus
02-15-2011, 11:23 AM
We have clothing manufacturers left here in the states? I had thought they all fled to China for the cheap labor.

The US still manufactures more goods than China, at least in terms of total value. But we have outsourced way too much.

lacarnut
02-15-2011, 11:39 AM
The US still manufactures more goods than China, at least in terms of total value. But we have outsourced way too much.

True. Believe it or not, the US is the largest manufacturer of goods in the world. However, we do have lousy trade agreements where our products are not even allowed to be imported into their country or they place high tariffs on our goods. A little of what Donald Trump says makes sense. However, no one wins in a trade war.