Strong Dollar Brings Greater Cost Pressure To European Apparel Retailers.

Beijing time on March 25th morning, the Wall Street Journal reported on Tuesday that Europe's fast consumption.

Increasing pressure is needed to raise pricing, otherwise profits will be lost because of the increase in outsourcing costs caused by a strong dollar.

This is another subsequent impact of the recent dramatic change in exchange rate in the business world.

Many large

Both exporters and exporters are glad that the euro has fallen against the US dollar, including many luxury goods manufacturers.

The continued decline in the euro exchange rate in the past few months has led to a significant reduction in their cost, and products are naturally more competitive in the US and other export markets.

But for some large garment retailers who are outsourced to Asia, they are selling dollars in the US dollar and selling them in euros. The fluctuation of exchange rate naturally means a greater disadvantage to them.

H&M, a Swedish clothing retailer, warned on Tuesday that a stronger dollar could lead to higher procurement costs for the rest of 2015.

However, the earnings report also showed that the company achieved profit growth in the first quarter.

Nils Vinge, director of investor relations, told the Wall Street journal that "many competitors need to raise their prices. Then we have the option of compressing our profit margins together with a price increase or keeping prices unchanged." Niels said.

It all depends on us. "

Simon Irwin, an analyst at Credit Suisse Group, estimates that the cost of H&M input in Euro terms is likely to increase by 18% over the next six to nine months. The company may need to raise its price by 3.2% in the second half of 2015 and increase 4.5% in 2016, Simon.

Some analysts pointed out that, compared with other competitors, H&M has a much larger exposure to the dollar's upward trend. Most of the company's outsourcing costs are in US dollars, but half of its sales are in euros.

Richard Chamberlain, an analyst at Royal Bank of Canada capital market, points out that about 80% of H&M's products are produced in the Far East. Most of the suppliers of these international brands accept payment in US dollars. Richard Chamberlain