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Feb 17, 2011
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Retailers beware! Tinker with fabric at your risk

By
Reuters
Published
Feb 17, 2011

Feb 16 - Blame the high price of cotton for T-shirts that might feel just a bit scratchier this spring, or pants that seem to stretch out after one washing.


Big-box players or fast-fashion retailers are more likely to lower the weight of cotton in their garments or opt for a synthetic alternative

As manufacturers tinker with fabrics to limit the use of pricey cotton, they risk compromising quality. Synthetics are less expensive than natural fibers, but associated with cheap clothing in the minds of consumers.

That creates a dilemma for some U.S. clothing brands trying to protect the bottom line and yet maintain "high-quality products". While some, especially lower-cost brands, will be more willing to cut cotton weights or consider a cheaper man-made fabric, stronger labels will refuse to compromise in order to keep their customers satisfied.

"Re-engineering" is the term heard in the industry today -- code word for determining what can be sacrificed in a garment in the name of cost savings and what cannot.
"No one will come out and say they're going to lower quality," said Roth Capital Partners analyst Liz Pierce.

"I do think everyone is going to look at their options to re-engineer products. But anybody who has a great brand understands the risk associated with taking a hit to quality," she said.

That means strong brands like Ralph Lauren or Coach won't be kissing their rolls of cotton goodbye any time soon. Instead, they're sticking by cotton and reconciled to inevitable price hikes at retail as the cost to make apparel rises between 10 to 20 percent.

But low-priced labels that operate on razor-thin margins and which are not known for quality, may be willing to take the risk.

"Those are going to be the ones who work harder to maintain that value perception by taking more out of the product," said Peter Brown, vice chairman of retail consultancy Kurt Salmon.

Big-box players like Wal-Mart Stores who offer $5 T-shirts and jeans that cost less than $20, or fast-fashion retailers whose styles rapidly change, are more likely to lower the weight of cotton in their garments or opt for a synthetic alternative when possible, experts say.

"The younger customer doesn't care as much," said Needham & Co analyst Christine Chen. "If the younger customer cared then Forever 21 wouldn't do any business."

SLIPPERY SYNTHETICS

Nearly three-quarters of all garments sold in the United States contain cotton, says trade group Cotton Inc, so there is a financial incentive for the industry to try to limit its use.

Cotton now sells for nearly $2 per pound on scarce supplies. The price has risen over 35 percent this year in the second wave of a rally that began in August 2010.

Man-made fibers like viscose, polyester or spandex are often added to garments to help them hold their shape, add softness and resist wrinkling. But too much can impart a tell-tell shine to garments, and there is still a stigma attached to synthetics in the minds of shoppers.

By Alexandria Sage

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