Clothing Prices Expected to Jump This Year

Online, February 14, 2011 (Newswire.com) - NEW YORK, (UPI) -- Research firm Strategic Resource Group said U.S. consumers could expect a 10 percent hike in clothing prices this year.

The price of cotton has more than doubled from a year ago, reaching $1.90 per pound last week, The Boston Globe reported Monday.

Labor costs for manufacturers are also rising, while retailers that held back on making price adjustments during the recession are running out of options.

Materials account for up to 50 percent of the cost of a garment, while labor costs account for up to 40 percent, depending on the style, the newspaper said.

In China, some clothing producers shut down during the recession and are ready to begin production as demand recovers. The producers, however, are finding labor costs are higher than they were when the plants closed.

Eric Wiseman, chairman and chief executive officer of VF Corp., owners of The North Face, Nautica, Wrangler and Lee brands, said prices would increase across the board.

"All of our brands, every single brand, will take some price increases," he said.

Throughout the recession, low inflation had kept clothing prices in check. "We have been so used to deflation for years and years," said David Bassuk, managing director at AlixPartners.

Retailers also sense the jump in customer activity during the holiday season could be in jeopardy.

"Customers are going to be surprised," Bassuk said.