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US Apparel Retailers Are Raising Prices

2011/4/28 15:55:00 41

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Apparel Retailers Retailers And Consumers

Fitch said that because of the rising cotton prices and rising labor costs in China, American retailers will be forced to raise their clothing prices this year, which will be 15% higher than last year.

The credit rating agency said retailers are struggling to cope with the first wave of time since the 90s of last century.

Cotton price

The rise of the US consumers who had met the problem of rising food and fuel prices will face a sharp rise in clothing prices.

The price increase will affect many brands from Lo J Faith (North Face) to Levi's (Levis).

It will mark the end of an era of twenty years: in the past twenty years, the cost of clothing has been declining as western manufacturers have shifted more production to low-cost emerging markets.

Monica Aggarwal, senior director of Fitch, told the financial times that by the fourth quarter of this year, US retailers will raise the price of clothing by 10% to 15% from the end of 2010, Monica Aggarwal.

Retailers and manufacturers have been struggling to see whether the increased cost is passed on to consumers.

Aga Wall said, "considering that there is no data on clothing prices in the past twenty years, and no data on consumers' reaction to price increases", many retailers and manufacturers are not familiar with the situation.

Mid-range

Department store

JC Penney CEO Mike Mike predicted last week that the industry will raise its clothing price by 5% to 20% in the second half of this year, only in the second half of.

JC Penney sells many brands of clothing, including Ali Shi Fagafaga Bong (Liz Claiborne) and docks (Dockers).

Levi's Levi (Levi's) warned this month that its clothing price will rise by two digits.

It said consumers' response was "unpredictable" and warned that rising prices could lead to reduced sales.

Levi's's Levi's jeans usually contain 90% of its cotton.

Over the past year, the demand for consumer growth in emerging markets has pushed up commodity prices and exacerbated inflation in the West.

Cotton price

It rose 120%, hitting a peak of more than $2 a pound in early March.

And as workers demand higher wages to cope with rising cost of living and comfortable living in the middle class, wages for Chinese garment factories are rising.

Aga Wall estimates that the rise in costs will lead to a 0.3% to 0.5% drop in gross margins of US apparel retailers.

The gross margin of American apparel retailers is usually between 38% and 40%.

VF Corporation, which owns brands such as Costas outdoor clothing and Lee jeans, said in February that the cost of the company will rise by 4% in the first half of this year and 10% in the second half.

VF Corporation said the company would raise its product price, but warned that the price increase would not completely offset the upward pressure on product costs.

Aga Wall said that clothing companies would be more hesitant in raising the price of basic clothing such as T-shirts, because consumers had expectations of how much they should spend, but raising the price of more fashionable clothes would be easier.