Cotton is often called the 'poor man's cloth' but, if retailers are to be believed, it may not be so for long. Consumers, who are already burdened by high food prices and shooting property prices, will now have to shell out more for clothes as well since most apparel retailers are mulling price hikes, following a surge in cotton prices.
"There is a huge increase in the cost of cotton yarn that has gone up as much as 80 per cent in the past one year. So far, textile manufacturers were absorbing the price rise. However, now they have to pass it on to the customers," a senior official at textile major Arvind Ltd told Mail Today.
The firm supplies cotton knits and denim to brands, like Levi's, Pepe, Spyker, Lee, Wrangler, Color Plus, Arrow, Park Avenue and Killer. It expects prices to rise by 10 per cent in the premium category of these brands.
"This is the second round of price hikes. Price of fabric have already gone up by almost five to 10 per cent. However, apparel brands have not passed it on to the customers," a top executive at Allen Solly said.
"The second round of price hike at the suppliers end has forced retailers to follow suit and they are mulling price hikes for the February and March stocks. But we will first hike prices in the premium category," the executive added.
Retailers like Shoppers Stop, Reliance Trends and Pantaloon have also said that the prices of their summer collection would go up. "We are not going for a steep price hike so that sales are not affected. The hike will be on the premium segment and not more than 10 per cent," said an executive at Pantaloon, the apparel retail store of the Future Group.
According to industry estimates, at present the premium fashion retail segment in India is estimated at about Rs 2,000 crore. This segment is expected to grow at 25-30 per cent per annum. Since April, 2010, cotton prices started moving up. A candy of cotton (356 kg) was sold for as high as Rs 47,000 in October as against Rs 23,000 in the corresponding period last year.
Courtesy: Mail Today