Photo: monsieur paradis on flickr
Consumers are inundated with stories about food price rises.Now it’s clothing.
Today the AP has a story about a 10% increase in clothing prices over the next few months. That call is being made by Burt Flickinger III, president of Strategic Resource Group.
And the comments from clothing company executives might be even more worrying.
All of our brands, every single brand, will take some price increases,” said Eric Wiseman, chairman and CEO of VF Corp., whose brands include The North Face, Nautica, Wrangler and Lee.
Cotton accounts for half the production cost of jeans, which make up about one-third of VF’s sales, he told investors in November. Higher costs also will affect how clothes are made.
It’s obvious that with input costs rising there was an increase in clothing prices coming. The big story here to watch is whether or not clothing retailers, that have seen consumer demand rebound, will be able to pass on these higher prices to consumers without seeing a loss in sales. Last week, Bank of America Merrill Lynch’s Lorraine Hutchinson said clothing companies would have a harder time passing on these costs to consumers than other retailers.
The sector may be in for a rough patch if demand deteriorates when higher prices set in.