This is an excerpt from a newsletter that we just received from Marcus last night. With all the concern about prices, I thought you might like to know what the manufacturers are telling the retail shops.
"What is causing the price increases? First, there is a worldwide cotton shortage, now in its second year. The situation was significantly compounded by the flooding in Pakistan, which decimated the local cotton crops. Cotton prices are up over 100% from this time last year. Additionally, there are labor shortages, dollar devaluations and a list of global economic conditions in general; together, these affect the pricing on all products coming out of China. Not only has this created a shortage of greige goods for printing in China, but adversely affected the cost of the greige goods available worldwide. While we do print in Korea, the majority of the greige comes from China.
Looking ahead, what can we expect? We have experienced shortages in the past, but this particular set of conditions is like no other we have ever experienced in our 100-year history. In addition, greed and corruption are fueling extreme price fluctuations, as greige goods producers hold out for the best price. This cannot last forever, and hopefully the market will stabilize in the first quarter of 2011. The good news is that we are just now hearing that the cost of cotton is going down. However, these lower prices will likely not be reflected in the market for another six to nine months; as with any commodity, cotton costs rise faster than they fall. The challenge is that we must produce goods at the today's pricing. It will be a difficult 2011 for all of us, both within the industry and beyond."
BTW... Moda has been holding their prices steady, even for their new 2011 lines. When the rep stopped by, she said that they were able to do this because they had been working with the same suppliers and mills for so long, that they had excellent relationships built up with them. Perhaps the good connections allow them to avoid the greedy suppliers? Only Moda knows...