Archive for November, 2010

Rising Cotton Prices Hit the Pocket Book

Gone are the days of $5 tees and undies.  Shoppers will begin to pay more for clothing next year as skyrocketing cotton prices force companies to take their chances with price increases even as consumer demand remains slow.

Cotton prices have been driven higher by demand from developing countries, mostly China and India, where rising wealth is boosting consumption patterns.  Severe weather is also to blame, with heavy rains in China and flooding in Pakistan damaging many crops and limiting cotton supply.

Companies like Jones Group, which includes lines Nine West and Anne Klein, and Hanesbrand plan to raise prices on clothing by as much as 10%.  When cotton prices began to rise a year ago, retailers and manufacturers were uncertain how much of the cost would be passed along to consumers but with  cotton now up approximately 80% since the beginning of the year, apparel companies can no longer eat the costs.

Children’s clothing manufacturer and retailer Carter’s Inc., which includes OshKosh B’Gosh brand,  said in October that costs for its spring 2011 product rose 11% and that it expects costs to rise even further for fall merchandise.

“The price increases mark a sharp reversal in apparel price trends, which have been deflationary for at least a decade”, says Emanuel Weintraub, a retail consultant.  “The moves are setting up a “high-stakes poker game” with retailers”, he says, “who are reluctant to accept price increases while their customers remain in a thrifty mood”.

“Larger, well-capitalized vendors are more likely to have the bargaining power to convince retail partners to pass through the increases but some of the smaller firms could be forced out of business”,  says Mr. Weintraub.

Retailers have been shielding customers from the full impact of commodity price rises for some time now.  Weak consumer confidence means retailers are competing even more fiercely for the limited discretionary spending available.  That situation is unlikely to change from now until Christmas, with retailers clamouring to win the attention of cash-strapped consumers through discounting and promotions.

04/11/2010 at 5:30 am Leave a comment

CRAiLAR® Choosing Flax Over Hemp?

On September 20th, we announced that after successfully transforming hemp fibers into yarns and fabrics with the desirable qualities of cotton, we would now begin a strategic shift to use flax fibers as the foundation for the next phase of its proprietary CRAiLAR Organic Fiber technology.

So, why did we switch our primary feedstock from hemp to flax?

Our technology was developed to work on all bast fiber crops.  Hemp was the initial focus as it is an emerging industry in Canada.  Flax is a bast fiber crop so the CRAiLAR® process works very well without any modification. CRAiLAR® is a versatile technology and also performs well on jute, kenaf, and other similar crops.  At the end of April of this year, we announced that we had successfully spun not only a hemp-cotton combination but we’d also successfully spun a flax-cotton combination.  We found the CRAiLAR® Flax to be of very high quality and ideally suited for fine knit items such as T-shirts.  While hemp is also well suited for knit garments, the legal issues surrounding the crop in the USA combined with the farming learning curve that will be necessary to begin the agricultural supply chain, make commercialization of this fiber more difficult than flax.

Our recent spinning trials with CRAiLAR® Flax have been highly successful, which further validates the feasibility of flax as a practical, economically viable complement to cotton.  Therefore a strategic shift of
focus from hemp to flax was announced earlier this year.

To learn more about this strategic move, please visit our site to review our CRAiLAR® Fact Sheet.

02/11/2010 at 5:30 am Leave a comment

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