Geoff Krasnov offers apparel/clothing/garment manufacturing and sourcing news.

Tuesday, November 09, 2010

The end of the world as we know it?

Seems that way! Every day we look at cotton fiber prices and say there is no way benchmark pricing can increase further, Last year cotton was $.55 a pound, today it is $1.52 a pound, a 276% increase. The Chinese have been buying futures as high as $2 a pound. Compounding the cotton issue is the increases in polyester fiber, up 25% from a year ago, and trending upward at a faster pace as some programs switch to higher polyester blends in attempts to stave off the cotton increase. Invariably, profit taking will add to the drama. Further exacerbating issues on the import side is government money printing, causing the dollar to slide against foreign currencies and increasing the cost of imported apparel products.

What can you do? Educate your customers by sending them links to articles or to this blog. The more retailers hear of the impending increases the more likely acceptance will come. Discuss the historic rise in costs at dinner parties or social events, creating more awareness. Start planning. Develop next years budget anticipating apparel increases in the range of 6-10%. Consider forecasting, as it will become the most important tool you will use to remain in stock. Manufacturers are not mind readers, and with inventories now more costly than ever, controls will likely tighten up availability.

Read the previous blogs to gain a history of what has transpired and please consider the importance of your level of communication with your suppliers.

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