Apparel Prices Rising as Fiber Prices Increase
Many fiber prices have been rising the last year including cotton which has risen 160% from last year from 64 cents per pound to $1.67 per pound, the highest prices since the civil war. In addition to cotton, wool has seen its highest prices in years with a 44% increase in price over the past year and many types of polyester have increased as the price of crude oil has increased. Although polyesters and synthetic fibers have seen a price increase, the increases are nowhere near the price increases of natural fibers. As fiber prices increase so to will garment costs which will affect consumers at the register with higher retail costs. Many of these latest increases in fabric prices will be experienced now and possibly increase further during the spring 2012 season. As many consumers are now finding more value in natural fibers, believing them to be higher quality, this inflation could seriously hinder sales in the coming year, especially with an estimated 10-15% increase in retail prices for this coming fall. (According to WWD 74% of women believe better quality garments are made from natural fibers but only 55% of women said they were willing to pay more for natural fibers despite the increase in price)
So what is causing these price increases?
Some of the increases in wool are due to the rise in demand as the consumer has shifted back to the desire for garments to be made from natural fibers; however, the increase is mostly affected by production decline. Many sheep farmers in countries like the US and Australia are choosing to change how they use their land and moving to less labor-intensive and more profitable farming such as corn and soybeans.
Cotton prices have also been driven up by an out of balance supply and demand ratio caused by the global economic recovery last year. In addition, there is a high demand from China as a result of the cotton shortfall on the world market. All of this coupled with the challenges in the growth and farming of cotton caused by flooding in areas like Pakistan, Australia and China in addition to India limiting cotton exports last year have affected the price of this material.
There is no telling how long the increase in prices will last but as mother nature continues to through curve balls in the world’s climate, weather and natural disasters, we may continue to see negative effects on many crops, including cotton.
What many companies are doing in reaction to the price increase is to combine synthetic fibers with cotton to create cotton blends. Blends using cotton, linen, viscose, synthetic and cellulose-based fibers like Lyocell, Modal and Tencel are being shown throughout all of the shows and designers are embracing these blends for their collections. Many designers are remaining positive about these new blends because it creates something new and different. There is still a trend that people will accept price increases if garments have quality construction, have a quality product and a quality idea, cut and style. One thing is certain, basic cotton shirts and blouses will be more expensive.
“Green” Fashion
Making a statement in green fashion has been a trend for a while now but has become more accepted and even demanded by consumers in recent years. Below are some new projects being developed in this important arena of sustainable and green fashions.
To read more about eco fashion visit this fabulous site. Eco Fashion World.
EcoDenim
EcoDenim from Colombiatex has created an innovative denim fabric that is partially made from recycled plastic bottles. The new denim is made from 32% recycled plastic bottles.
Alberta Ferretti and Emma Watson Unveil Pure Threads
Alberta Ferretti teams up with actress Emma Watson to create a “green” capsule collection called Pure Threads. Part of the proceeds for this collection will be donated to People Tree, a non- profit that Emma Watson supports, which collaborates with 15 developing countries and stimulates small companies to produce low impact clothing. The collection will consist of 5 pieces: Two dresses, a shirt, a long skirt and a pair of denim shorts all made from organic fabrics like poplin, cotton muslin and hemp.
What to Watch in 2011—Update
Urban Superstores
As mentioned in the original post from January 18th many of the discount super stores, such as Target and Walmart, were exploring city or urban concepts that were scaled down to fit city landscapes in order to expand into other markets. Now Target has a plan to open its first CityTarget in Chicago. This new store will be opening in the former Carson Pirie Scott building located on South State Street and Madison Street E in the historic landmark building. Target says it will preserve the historic building and make no changes to this “Chicago treasure.”
Target has also found sites for other CityTargets in San Francisco, Los Angeles and downtown Seattle.
Matthew Williamson Joins the Bridal Market
Bridal was a big trend we reported on January 18th in what to watch for 2011. Recently Anthroplogie launched BHLDN and ShopBop went live with the online Wedding Boutique. Now designer Matthew Williamson launches his own bridal line. He began testing the waters last year when he unveiled a capsule bridal collection for net-a-porter. The proven sales figures led to this new fashion-conscious bridal collection.
JCrew –Update
The “Go-shop” period ended last month for J.Crew. Despite entertaining other potential suitors such as Edward S. Lampert of Sears Holding Corp. and Urban Outfitters Inc to take the company private the “shopping” period is over and the $3 billion deal to take the company private will continue with TPG Capital and Leonard Green & Partners.
The story of JCrew and how it became a hot commodity:
On a side note, Edward S. Lampert turned to the Gap instead and purchased a 5.8% stake in the company last month. To read more on the Lampert’s Gap purchase go to:
GAP: Strategy for the Future
The Gap has been in desperate need for a re-vamp for the past few years. Recently the Gap changed out some of its executive staff in hopes of turning around the business. Last week the company outlined its plan for the turnaround.
- Shift marketing dollars to areas that will woo new, younger customers as well as minorities.2.
- Maximize the pipeline which has sped up as a result of the overhaul over the past year and provide more on trend product.
- Close 200 Gap stores by 2013 bringing the new global store total down from 900 to 700. (http://www.fashionologie.com/Gap-Closing-200-Its-900-Stores-Focusing-Younger-Customers-14945555)
- Drive sales through RFID technology that will help locate product for customers both online and in stores. (http://www.aimglobal.org/technologies/RFID/what_is_rfid.asp)
LVMH: The Buying Streak and the Saga with Hermes Continues and Continues and Continues
LVMH and Bernard Arnault have been in the news a lot recently between buying up a storm brands like Ole Henrikson, NUDE, and recently Bulgari to the Hermes saga and the Dior tragedy. The company has had some serious PR issues to contend with. The buying streak continues as Bernard Arnault buys the heritage luggage maker Moynat. Arnault intends to reinvigorate the brand which is older than the famous Louis Vuitton and there are rumors of LVMH possibly buying the luxury shoe brand Jimmy Choo.
Moynat was created an 1849 and was one of the first leather good companies of its kind.
To read more details please click below to read the fabulous blogs Fashionologie and CPP-Luxury: Business of Luxury:
In addition to the continued purchases of Mr. Arnault, the Hermes saga continues as Patrick Thomas, the chief executive officer continued verbally lashing out against Arnault. It is common knowledge that Hermes finds the purchase of its company’s shares to be vulgar and ungentlemanly. Bernard Arnault believes that a relationship between LVMH and Hermes could be mutually beneficial but the family owned Hermes feels differently. The Hermes family has tried to create a united front against Arnault as well as a holdings in an effort to protect themselves from a takeover but not all of the family members share the same sentiment and believe that there could be major drawbacks for individual family members.
Designer Partnerships
These days having your own line is incredibly hard to do despite the success of Alexander Wang and his budding empire. Even the designers that flash across the fashion periodicals as the next big thing have a long way to go before they reach financial success and security, which is somewhat of a myth these days. Self preservation is key and business partnerships are bred and cultivated out of a mutual need and benefit. We have seen designer partnerships at H&M, Sears and even Payless. These partnerships are mutually beneficial for both the retailer and the designer. Bringing more exposure, credibility and a paycheck to the designer as well as bringing exposure, cool fashion credibility and hopefully additional business to the retailer. This is a way to survive as a designer in this age of fashion, inking collaborative deals that are financially beneficial to both parties.
Last fall Sears announced a partnership with French Connection to help spruce up their apparel portfolio and make it more competitive with brands like Target. This past month Target announced a revival of the best of their designer partnerships returning and bringing the best sellers back for a limited time only. Now Christian Siriano, from Project Runway who also has his own line showing at New York’s Fashion Week, is teaming up with Spiegel and creating a capsule collection of special occasion dresses that will be featured in Spiegel’s The Dress Event magazine and online at Spiegel.com beginning April 4th.
On a separate note, lesser known London based designer Kinder Aggugini is the first to join Macy’s for a series to build up the chain’s Impulse contemporary department. Aggugini will be the first to design a capsule collection which will sell for two months at Macy’s this year. This capsule will be followed by more exclusives from four designers in the fourth quarter, including designs by Karl Lagerfeld. Matthew Williamson will be next on the list to do the capsule collection for Macy’s. Williamson also recently launched his own bridal line.
To see Aggugini’s collection click on Macy’s link below.
Fashion Tech
Fashion is ever-changing but the new trend in recent years is virtual and online. It seems everything is going online from social networking, videos streaming across the world, e-commerce business, fashion shows live streamed, ordering direct from the runway etc. The internet eliminates borders and creates a larger audience for your business. It is the sector of the fashion industry that is still scratching the surface. Online components and understanding the digital age is necessary for everyone in this new age of fashion. Although online removes the tactile experience one has with clothing and textiles, I am sure one day someone will develop a solution for that experience as well. (Hint to fashion students: Learn about the digital applications companies are now using, learn about programming, digital media etc—these are the opportunities that may be more readily available as traditional operations and roles within the industry are diminishing or eliminated.)
The Digital Trunk Show from Moda Operandi
The latest use of digital media and virtual web concepts comes from Moda Operandi which is bringing the trunk show concept online. The company launched this new concept with Alexander Wang’s fall collection last month on February 16th. This site hopes to break new ground which gives little lag time to the designer’s runway show and the consumer ability to place an order. (We had seen this concept last fall from Burberry as it allowed customers to place orders for some of the looks that went down the runway.)
The site also features a gallery of every look from the designer which they shoot in the designer’s showroom on models shortly after the show. Shoppers can then order by putting down a 50% deposit and paying the remainder when it is shipped. In addition to shopping, the site also offers editorials and designer profiles as well as reviews and trend reports.
This concept certainly makes fashion more immediate and gives designers an immediate response to which items will be hot sellers or popular to the consumer. This is only the beginning as we have seen an influx of digital media and online presence the past couple of years.
Moda Operandi is through invitation only membership.
Alexander Wang Online
As Alexander Wang continues to expand his empire he re-launches his website which will continue to promote his brand with behind the scenes access and product executed with a straight forward and interactive approach. There are several new exciting things that will be happening with the site so we encourage you to keep following it.
Employment
It is no secret that the recession has had a major impact on employment for all sectors of business and the fashion industry is no different. Over the past three years jobs have been cut and head counts reduced with no end in sight. As companies continue to react to the changes in sales and consumer mentalities, positions and job opportunities continue to change. New leadership and the changing of the guard has also taken place in several companies over the last few years which has also led to strategy changes and employment changes.
New York City’s fashion industry employment fell 7.3% for the first quarter of 2010 compared to the same time the year prior. The manufacturing sector of the industry experienced a loss of 2,500 jobs and the wholesaling sector also dropped 1,224 jobs. Despite the continued drop in employment it is not as steep as it has been in recent years.
Chicago Designers in the News
Maria Pinto’s New Gig
Maria Pinto, the Chicago designer who closed her doors after gaining national press from dressing the First Lady has a new job as the new creative director for women’s fashions at Mark Shale.
Cynthia Rowley’s Pretty Penny
Cynthia Rowley quietly launched a brand extension last November called Pretty Penny that offers support and seed money to budding entrepreneurs. Pretty Penny’s first beneficiary was Exhibition A which is an online site that sells limited edition art and other pieces at friendly price points.
Henri Bendel’s Legendary Designer Open-See: March 25!
If you are a designer of women’s accessories & handbags, jewelry, beauty, fragrance, gourmet edibles and gifts this is your opportunity to get discovered by Henri Bendel. This opportunity allows you showcase your designs to the Henri Bendel buyers.
This event is first come, first serve so be there early!
