Higher Commodity Prices Hit Fashion

One of the things that makes the fashion industry so great is the fact that it is global.  Ideas and people swirl around the world and normally it equals better fashion.  Well, it also equals higher prices.  Commodity prices have soared lately.

Fashion is the "textile industry"--I think they give it that name so that men in suits don't feel like they're talking about "womens' concerns", but that discussion is for another day.  The cost of your favorite new dress directly correlates to the price of raw materials around the world.  In the last 12 months, prices have skyrocketed.

Cotton prices are the highest they've been since the US Civil War.  In the 1860s, prices were so high due to war and blockade.  Now, it is a combination of ruined crops in Pakistan and Australia, coupled with growing demand around the world.  Higher demand plus lower supply equals higher prices.  That means your dress is going to be more costly.

Its not just cotton that is pricier.  Silk, leather, cashmere, fiber for synthetics, etc.... have all gotten more expensive.  Much of it is due to higher demand, transportation costs and in the case of vegetable fibers, failed crops.  One of the largest sources of the rising demand is China.  With the Chinese economy growing, the demand for garments and other textiles rises and so does the price of such things around the world.

What are designers doing about this?  Midlevel designers have been rethinking their collections so that they use less or cheaper materials, in order to not have to raise their prices.  For example, Luca Luca has been trying to order in bulk and use less fabric variety to keep the prices down.  But, they were far enough into their Spring 2011 collection to where they've had to eat much of the cost increases.  This is bad for fashion in the long term--when the designers become less profitable, it will be harder for them to survive changes in demand for their products and to invest in new talent and methods.  This means lower quality items with less innovation.  Hopefully next season Luca Luca will find a better way to deal with this than to eat the cost--it can only do that for so long before they'll have to fold, and then no more pretty dresses from them....

High-End designers are simply passing on the rise in costs to their consumers.  So, if you want high-grade silk to line your blazer, you better be prepared to pay.

Information from Wall Street Journal and Luca Luca runway photo from Style