Very expensive clothing for all

Cotton prices have skyrocketed over the past year and a half and have more than doubled in the past 12 months.  Let’s look at three key questions

1. Why is this and what affect has it had (and is it having) on the price of your clothes?

2. What can makers of cotton based products do to handle this?

3. Is it rational?  Some people believe cotton has been irrationally over-inflated in price and are looking at shorting.

The Why

According to the article in Textiles Intelligence… “the main cause is a massive hike in the price of raw cotton. In the 18 months between March 2009 and the end of September 2010 this rose by 127%, from 51 cents/lb to almost 116 cents/lb.  Cotton is in short supply because farmers cut back on plantings when cotton prices were low. Also, cotton usage is rising in response to strong retail demand growth in China and India. And a further blow to cotton prices has been struck by the devastating floods in Pakistan.” 

Pakistan is a major producer of cotton but growth has been tricky and cotton is a complicated crop to tend to.  Flooding in the region and other bad weather affecting crops in China and Australia certainly put a dent in the price and it hit demand (driving prices up). Buyers of raw cotton have to scramble to other regions in the world such as in India (which is growing in it’s cotton production) and then we have the classic example of supply and demand dictating prices.

Four ideas to manage the situation if you make cotton clothing.

• Add other materials into your cotton based products.  Instead of 100% cotton shirts for example, maybe you redesign them to be 10% polyester or some other materials.

• Work more closely with your suppliers to see what is possible to negotiate.  Perhaps consolidating 10 suppliers down to 6 or 7 and filling those 6 or 7 up with the additional orders could help mitigate on the other side the price pressure felt on the cotton products.  Give them more volume ask for better overall pricing.

• Rethink your 30 or 40 percent of your line – does everything need to be cotton?  What alternative materials could you use for 2012/2013?  Adapt the line to the times.

• Re-source apparel production to suppliers that perhaps you never used before but have larger production runs that can allow you to piggyback on the raw materials buy.

Is it Rational?

People tend to panic at times and that can also lead to irrational pricing but if you look at the graphic at the top of this piece, you’ll see that Cotton has been high in the past as well as in the early nineties and then came back down over the next 10 years.

If you take a look at the chart on this page it shows cottons has risen almost 4x that of gold and the case could be made that cotton is simply overpriced by a longshot and will come down.  There’s no doubt that the factors of high demand for cotton products coupled with China’s consumption of cotton and add in a buzz in the world about how cotton is going up up up, maybe we simply end up with a self fulfilling prophecy that pushes the price of cotton too high compared to what it should be based on real supply and demand.

We’ll find out in the next 1-2 years but in the meantime I expect that consumers will be holding on to their jeans a little while longer than they used to and retailers will be closely watching how many units they buy.  Better to sell out than get stuck with dead and perishable inventory.

http://sourcingthreads.wordpress.com/2011/02/10/very-expensive-jeans-for-all/cotton-5/

High cotton price - how did we get there?

10 years ago cotton was pricing at about $.43/lb and today it is around $2.13/lb

• In 2008 Cotton Market started to tighten (Supply & Demand).  At $.60 or $.70 it’s below cost of production for farmers.
• In 2009 the price dropped somewhat during recession – so farmers planted less.
• In first half of 2010 the market started to recover and prices went up.
• In second half of 2010 prices skyrocketed.

Why did this happen?

1. The Fundamental Balance has Tightened.  Mill consumption recovered faster than farmers’ ability to grow cotton.  Prices went up.  Cotton harvests are in the Fall and it takes a year to replenish and about 2-3 years to balance out.

2. China continues to be a huge consumer of cotton and has to go to market to buy it.  Mills are buying.

3. Exportable crops are sold out.  India didn’t release full capacity and took their cotton off the market.  Brasil in the Southern hemisphere is coming to market but is too small to make a dent in market quotes.  33% of 2012 crop already sold and it hasn’t even been planted yet.

4. Price volatility remains high making it hard for mills to commit at times.

On the Supply side:

Production should increase in 2011/2012 but this new cotton will not come to market until Fall of 2011.  China is hoarding cotton frantically.   Cotton futures (ICE futures) show the price coming down over the next two years from about $1.89/lb in 2011 to perhaps around $.96 in 2013, but we’re not going to see the prices of 10 years ago.  Also – government policy in the USA has been pushing ethanol which has warped the price of corn.  Farmers in many instances have also been forced to choose between growing corn or cotton.

On the Demand side:

Emerging economies (BRICS) driving demand plus recovery in industrial markets plus consumers spending less on clothes due to higher prices.

The reality is that clothing and anything made with cotton will simply cost more.  Here’s an article from CNBC hitting this very subject.

So what can Brands/Buyers do ?

Offensive cost optimization such as add seeing if polyester can be added in some percentage to their lines if possible.  Reduce the amount of cotton used until prices fall back a little.

Find a new Supplier of your cut & sewn goods that could have better pricing on cotton from having larger sources that bought in the past at a better price.

Read more from http://sourcingthreads.wordpress.com/2011/02/15/very-expensive-jeans-for-all-part-2

Product safety management system

After a wave of high-profile product recalls recently, manufacturing and retail businesses around the world have been forced to recognize product safety as one of the major concerns. From toxic metal contamination on children’s toys, to defective design elements in major-brand automobiles, product recalls have become routine news items in the twenty-four hour media realm.

The public, the government, and industry watchdog groups have all begun to demand a higher standard of social responsibility on the part of manufacturers, retailers and corporations in all sectors.

For sewn goods manufacturers, and especially those who source materials overseas, there are a few regulatory acts like The Federal Hazardous Substances Act, the Flammable Fabrics Act, the Poison Prevention Packaging Act and the Consumer Product Safety Improvement Act, of which the basic requirements of CPSIA compliance is that all products subject to a ban or safety standard must be accompanied by a General Certificate of Conformity (GCC). The GCC must contain the following information:

1)  Date and place of manufacture;

2)  Date and place of testing;

3) A suitable identification of the manufacturer issuing the certificate (including the name and contact information for the individual responsible for maintaining records of test results);

4) Certification of conformance with any and all applicable Consumer Product Safety rules, along with a specification of those applicable standards

Instituted late in 2008, the CPSIA allows for civil penalties of up to USD100,000 per violation, with a cap of up to USD15 million overall. Not only product recalls cut into profit margin, they also damage a company’s reputation and public image tremendously, and the hefty fines are too ignore.

Part of the solution, is the implementation of a Product Lifecycle Management (PLM) system, or a Product Data Management (PDM) system. These customized software tools offer the ability to track data points universally and in real time, to prevent mismanagement of important data, to oversee information from the time its components are manufactured; to the time it hits the shelf and find out precisely where in the supply chain the problem occurred.

When your main purpose is to create fabulous designs, to please consumers and to make a profit at the same time, then all of these regulatory requirements may seem like burdensome roadblocks. But, when dealt with effectively and confidently, your company’s compliance with high-profile regulations can be a public relations advantage.

Eczema and bodily irritants from fabric

When you wear a fabric very close to your skin for long periods of time, there can be negative effects. Some of the fabrics that are most closely tied to eczema outbreaks are the following.

• Wool. Many people who suffer from allergies must avoid wool clothing. The same holds true for some people who suffer from eczema. The woolen fibers can cause itching, rashes, and eczema occurrences. Other wool-like substances, which produce similar reactions, are cashmere, Merino, and mohair.
• Polyester. Though it may appear smooth, polyester actually contains tiny fibers that can penetrate the surface of the skin and cause intense irritation. Although most polyester and nylon fabric is lightweight, it is rarely very breathable, and the sweat and heat buildup on the skin contributes to eczema.
• Synthetic fibers. Other man-made materials such as acrylic, nylon, and various blends may produce eczema.
• Other clothing. Like food and chemicals, nearly every type of clothing has been blamed for eczema outbreak. Some have found that eczema increases when they wear denim and leather, possibly because of the buildup of heat. Obviously, rough material also causes skin irritation.

To avoid eczema-causing clothing, try wearing loose-fitting 100% cotton clothing. The lightweight, non-clinging, and breathable features of cotton will help keep your skin breathable and healthy

Quote:  I make fashion work for me

Little about Jimmy Choo

Ever since its founding by Francis Light in 1786, Georgetown played an important role as the place for foreigners to conduct their businesses and the shoe industry was developed since then.

According to the old cobblers, shoe-makers in Penang have mastered talents prior to the 1960s whereby luxurious shoes British wore were of leather shoes with hidden thread. It was time-consuming to make leather shoes and required excellent skills.  Some of the apprentices were still unable to produce a pair of good leather shoes even after learning for four years. A skilled shoe-maker could normally make only a pair of shoes of hidden thread in one day, and some might need a couple of days!

During the early days, majority of leather shoes were made of leather or sheepskin and the shoe-makers were required to sew the thread through the skin of these shoes. Such thread-hidden shoes were out of trend 30 years ago and are considered as precious antique shoes by modern shoe-makers.

World renowned Jimmy Choo used to be an apprentice at Hong Kong Shoe Store in Georgetown, Penang.  Jimmy Choo was born in 1961 in Malaysia to a family of shoemaker and it is believed that this was where his outstanding shoe-making skill was picked up from. After moving to London and training at Cordwainers Technical College - now part of the London College of Fashion -- Choo began to sell his handmade couture footwear in the late 1980s. Before long, his client list included famous names like Princess Diana, but his one-of-a-kind, handcrafted creations were out of reach for most women. The painstaking methods Choo used to create the shoes meant their availability was extremely limited. 

That changed when Tamara Mellon approached Choo in 1996 with the idea of mass-marketing fashionable, high-quality footwear for women. In 1997, the two opened the first Jimmy Choo Boutique in London and began selling ready-to-wear women's shoes that were designed by Choo and produced at factories in Italy. It didn't take long for the company to find success: Celebrities, already familiar with Choo's handmade creations, snapped up the new line and quickly made the shoes a fixture on the red carpet and pop culture.  

Jimmy Choo today offers a fresh selection of innovative, trendy shoes each season without abandoning the classic silhouettes that never go out of fashion. The company also makes handbags and clutch purses, which are frequently seen in the hands of celebrities.

Choo himself, who sold his stake in the company in 2001, continues to handcraft shoes in London under the Jimmy Choo Couture label. In 2003, Queen Elizabeth II made him an officer of the Order of the British Empire. Mellon and creative director Sandra Choi, who worked with Choo before the company's launch and is the niece of his wife, oversee the ready-to-wear collection. As of 2007, Jimmy Choo has more than 60 retail stores worldwide. The shoes are also available online and in department stores such as Neiman Marcus in the U.S. and Harrods in Great Britain, though certain styles are exclusive to Jimmy Choo boutiques.

From a personal side, you’d be surprise that Choo potters around at home in airline slippers!   He designs his own shoes and his cousin makes them for him in London.   He does wear high heels he made, especially when he goes to a club.  This is because English are much taller than him and he has to use a three inch heel with a half inch platform at the front.  

Quote from Jimmy Choo – shoe-designing is an art form, it comes from everyday life, but it must be architecturally sound and aesthetically pleasing.

Pray for Japan

As the rest of the world waits to see if Japan can avert a nuclear catastrophe, a small band of experts is putting their lives at risk to prevent the disaster.  Thousands of people living near the troubled Fukushima Daiichi nuclear power plant have been evacuated from their homes because of the risk of radiation leaks from reactors damaged by last week's devastating earthquake and tsunami.

But while most hurry in the opposite direction, about 180 plant workers are staying put -- despite the fact that doing so could result in serious illness or even death -- to battle the meltdown threat. These workers at the site are involved in a heroic endeavor despite the fragmentary evidence that in some places on the site there were life-threatening doses of radiation. They are doing enormously heroic work.  Bravo.

Pray for those in Japan.