With volatile cotton prices, Marks & Spencer and ITC Wills Lifestyle are using cheaper garments to attract consumers


AHMEDABAD: Several apparel brands, includingMarks & Spencer and ITC Wills Lifestyle, are using cheaper and blended garments to woo back consumers chasing low-cost options due to rising apparel prices.

With volatile cotton prices squeezing the textile industry’s profit margins despite up to 40% increase in retail prices, 100% cotton garments are being pushed out of shelves by those blended with man-made fibres such as polyester. “There is a lot of value engineering happening on apparels. Apart from passing on the price rise to uers, brands experimented with playing with different blends to come with a winning formula,” says Sharad Mehra who tracks fashion and apparel operations at Technopak Advisors.

ITC Wills Lifestyle, for instance, replaced a 80s ply giza cotton range with 80s ply non giza cotton, which is 15-20% cheaper and helps the brand to keep its margin and the MRP intact, Mehra says. “Some innerwear makers are looking at carded cotton instead of combed cotton,” he adds. Carded cotton is cheaper than combed by 8-10 %. Cotton prices shot up by 64% between October 2010 (when the new crop arrives) and March 2011, but crashed 50% from the peak level to Rs 30,000 per candy by July 2011.

Cotton currently hovers around Rs 40,000 per candy. Polyester, one of the most common man-made fibres, is still 15% cheaper than cotton, hence the rush for blends. Rajiv Dayal, MD of Mafatlal Denim, a vertically integrated textile company, says several mills that predominantly worked with cotton have introduced blends in their product basket, ranging from 10% to 30%, to contain prices.

Retail prices of apparel made out of cotton are 40% higher than last year in the case of local brands and 25% dearer for national brands. “Although cotton would continue to rule, price fluctuations have encouraged fabric manufacturers to innovate and blends have walked in, especially in the bottom of the pyramid where the consumer is extremely price-sensitive,” says Dayal.

Technopak’s Mehra says that British brand Marks & Spencer, which is in India through a joint venture withReliance Retail, now focuses on the cotton poly blend easy care shirt to build its volumes. “M & S was selling their tripack of shirts at Rs 2,499 which had a white, light blue and cream shirt. This season they are selling the tripack again atRs 2,499 but now it has three white shirts only.

The reason being the lower cost of a white fabric as opposed to a dyed one,” he reasons. M&S Head of Region (South Asia) Venu Nair, however, asserts that the retailer did not change any of its products as a response to the raw material price rise. “Cotton blends have been used wherever there was a need to enhance the overall feel, aesthetic or performance of the product,” he says.

Most premium brands, however, maintain 100% cotton in their fabric. Homegrown mass-premium menswear brand Turtle, for instance, did not alter its product mix although it became 15% dearer. Itplayed with volumes and entered into block deals to minimise pressures from cotton, Turtle Director Amit Ladsaria says. But clearly, man-made fibre is creeping into your garment.

Ahmedabad-based homelinen exporter Pradeep Overseas has developed a poly-cotton blend ‘Chief Value Cotton’, that changed its product mix to 60% cotton from 100% two years ago. In Europe and the US too, garment markets are flushed with blends.

Textile economist Robin Anson, who founded Textiles Intelligence, says manmade fibre’s share of global end-use fibre will reach 64.2% this year from 63.4% in 2010. By 2020, share of non-cotton fibres will reach 70%. Tirupur-based knitwear exporter Sanjay Kumar Gupta says exporters are trying to push blends to Western uers due to volatile cotton prices.