Rising Cotton Prices Expected to Drive Up Apparel Costs

Posted on May 19, 2010

The Wall Street Journal reports that that cotton prices are rising and the prices are likely to be passed on to consumers. Apparel costs are expected to climb. Cotton prices have climbed 55% since last year.
"We are facing a very serious problem in terms of increased cotton prices," Abercrombie & Fitch Co. Chief Executive Michael Jeffries said Tuesday. The increases are making it harder for the high-priced teen retailer to restore margins already eroded by steep markdowns and depressed sales.

Intimate-apparel maker Maidenform Brands Inc. says it is seeing rising fuel costs that affect not only what it spends on transportation, but also the price of the petroleum-based synthetic materials that it uses for many of its products.
There are several reasons for the rise in cotton prices. The WSJ says some farmers switched to other crops during the recession because cotton demand fell. Bad weather has also damaged crops in China, which is the world's largest producer of cotton.
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