U.S. clothing prices rose by 10% this spring

High cotton prices "World Factory" China's labor cost increases The era of cheap clothing is coming to an end.

Due to cheap labor and modest inflation overseas, American clothing prices have been declining for more than a decade. During the economic downturn, retailers and apparel makers cut down on extra expenses and use blended materials to reduce prices. However, with the recovery of the world economy and the rising global demand for goods, the rising labor and raw material costs have squeezed the profit margins of retailers and apparel manufacturers. Last year, the price of cotton doubled and reached a record high. Synthetic fiber prices have also nearly doubled as demand has risen. US retail consulting firm Strategic Resources Group ** Bot Furi Kanazawa analysts believe that in the next few months, the US garment prices will rise about 10%.

The highest price of cotton in the history of the US clothing brand Booker Bros. shirt from the original 79.5 US dollars rose to the current 88 yuan. Famous brands such as Levi's, VF, and Nike have raised their prices, and A&F, the famous casual wear manufacturer, will also issue a financial report this month, and it is expected that more details will be issued.

"All of our company's brand prices will have different increases," said Eric Wiseman, president and CEO of VF. His company's brands include The North Face, Nautica, Wrangler and Lee. The adjustment of cotton prices has become the main driving force for price adjustment.

According to the International Cotton Advisory Committee’s report, the price of cotton has now risen to its highest level in 150 years. Last Friday, it has risen to US$1.9 per pound, which has doubled from a year ago and is also higher than the US$1.89 during the American Civil War period. high.

Last August, global cotton prices began to soar after major cotton exporters such as China, the United States, Pakistan, and Australia experienced bad weather and suffered poor harvests. India, which is the world’s second-largest cotton exporter, has begun to regulate cotton exports and produce large quantities of cotton to make up for domestic shortages. In addition, with the recovery of the global economy, the demand for cotton worldwide has also begun to increase significantly. Apparel manufacturers have to change raw materials to synthetic fibers such as rayon in order to reduce raw material costs. At the same time, in order to reduce additional consumption and expenditure, manufacturers will also reduce the color choice of clothing.

China's garment workers have been paid to produce one piece of clothing, with raw materials accounting for 25% to 50% of the total price; according to the complexity of the clothing process, the labor force also accounts for 20% to 40% of the total price.

According to Garthings Consulting, many Chinese apparel manufacturers experienced a suspension of production during the economic crisis and are now starting to restart. However, because of the shortage of labor, they had to pay for the workers. Some retailers will shift their production sites to countries with cheaper labor, such as Vietnam, to reduce labor costs and thus prevent clothing prices from fluctuating, but they are considered to be of no avail.

The United States Garment and Footwear Association** Kevin Burke said that the current situation is already the limit. Small shopping malls will face a survival crisis in this price increase storm because they do not have the strength to negotiate with suppliers. However, even large global chain stores such as Wal-Mart are under pressure to raise prices. "There is no doubt that we will raise the price in the future, but we do not want this to be the first choice. We will add this to consumers."

Retailers will also consider whether they will retain strong holiday promotions in conjunction with consumer demand. Some people worry that high prices will affect consumer confidence in buying. Shopping malls targeting low- and middle-income people will face a difficult period after raising prices. "I don't plan to spend more than $50 on a pair of jeans," said a full-time housewife in a mall in New Jersey. "I'm going to keep my money in case I need it." Even the more affluent consumers may be Shopping is frustrated because of the increase in prices.

Author: Zhou Jinglu