|May 18, 2011||Filled under 4whatitsworth, Abercrombie & Fitch, EDITORIAL, GAP Jeans, Levi Strauss, RETAILERS, Rewash Jeans, Silver Jeans, Tyte Jeans, Urban Outfitters||
When jeggins first made their debut on retail floors my first thought was “how much is cotton these days?” It is not that I thought they were horrible, i like jeggings but when you work with women every day and you have a size 2 complaining about how skinny they look or their little cupcake peeking over their waistband I was wondering how in the world am I going to get women in these tight little jeans?
My job got a bit more intense confidence building went on overdrive. Now 3 years later there is less and less cotton in denim and I am missing my 100% cotton, destroyed and intricate washed denim that I cherish so much. Will consumers still be able to replace those favorite pair of jeans that are becoming more and more coveted these days?
There was a WWD article by Kristi Ellis and Aurthur Friedman that caught my attention on the rising cost of cotton and how the economy is changing the denim world and fashion for that matter.
“We face an unpredictable cotton market and unpredictable consumer response to rising prices,” John Anderson, CEO Levi Strauss.
“The higher cost of cotton could negativly impact margins and working capital as we work through 2011” Blake jorgensen, CFO Levi Strauss.
Alden Halpern, CEO of 4Whatitsworlth, a jounior denim company with jeans retailing from $24.00 to $34.00. (I know cheap right…my jeans average $189.00) anticipated the spike in cotton prices a year ago and stockpiled 4 million yards of fabric at lower prices with his factories inChina. Halpen said the strategy paid off and allowed the company to maintain prices, but he will still have to face higher fabric costs in the last three months of the year because his stockpiled denim SOLD OUT! Who is 4 whatitsworth?…Tyte Jeans & Rewash Jeans are few of the lines they make. So, how did 4Whatitsworth end up with a 40% increase? They cut their space in LA from 120,000 sq ft to 16,00, cut their workforce by 20%, moved 11 people to aNEW office in China and sold their stockpiled denim while restructuring their company.
More denim companies are relying on new blends and adding more polyester, spandex, rayon, spandex, lyocell, and looking for more cotton alternatives.
Split denim says that fabric accounts for 30% of the cost of a garment and Makers of True originals has seen 10%-15% increases in the “first cost” of a finished garment. Many companies like Split are trying to keep their retail amount consistent and absorb the increases themselves. however, consumers should be aware that companies can only hold off the increases so long and they must be prepared for apparel prices across the board to increase as the cost of goods sold is dramatically increasing.
So, after the cost of cotton is increased so is the labor… where are your jeans made now? “Bangladesh, Pakistan, Cambodia and Vietnam are gaining denim business…All major brands are moving to Bangladesh, in particular; if you can’t get cotton cheap, you try to get labor and washing cheaper and sometimes with out a duty on it” Michael Silver, Presidentof Silver Jeans Co.
Denimatrix, a division of the Plains Cooperative association produces jeans for Abercrombie & Fitch, Gap, Guess and Urban Outfitters. Carlos Arias, President, says “in the past companies could go to three or four places to find core fabrics but today, it is a “produce-to-order” business, which means longer lead times.”
So, the industry is changing and before you- the consumer complain about where your jeans are made or the extra $5.00 bucks you are shelling out for that piece of indigo; understand that $5.00 is a deal and support the companies you truly want to support rather than buying just to buy and spending 15 minutes complaining about them being made in China. They are made in China because the consumer won’t gladly pay a premium to be made in the USA! The power lies with in the consumer to choose “what to buy” and “how much” you are willing to use your dollar to say “I care”?