Cotton costs impact retailers

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SALISBURY — The price of cotton has skyrocketed in the past two years, leading some retailers to get creative about their products or have no choice but to raise prices on some items.

According to the National Cotton Council, the cost of cotton has increased from an average of 62.75 cents per pound in 2009 to 161.7 so far in 2011, nearly tripling in just two years. What’s more, said one local business owner, the worst is yet to come.

“A lot of the prices have not had a drastic increase,” said Trey Kraus, co-owner of Carlton’s in Rehoboth Beach. “They will this coming spring. We’ll probably see a big rise next spring and summer. We’re all kind of waiting to see.”

At a time when holiday shopping is higher than it’s been in years, higher-end stores, such as Carlton’s and Nancy N Boutique in Salisbury, have been able to maneuver around raising prices too much by using different suppliers, finding new prices or, Kraus said, simply taking the hit themselves.

“We absorbed a lot of the cost increase ourselves,” Kraus said. “We’ve looked for new products that would allow us to maintain our target price point. In other areas, where it was a long-standing product we’re expected to have, we had to make a decision and, in some areas, we had to increase the price.”

Nancy Nyquist, who owns Nancy N Boutique, said she’s “never seen a woman pick up a sweater she liked and put it back down because of the price,” but she has noticed shoppers at her women’s apparel store are buying fewer pieces than before.

“I think people will see the price and grumble a bit,” she said. “I think they’ll still get the sweater, but they’re much more, what I’m seeing, instead of buying two sweaters, they’ll buy one. What they should be doing is buying classic clothing, classic styles. Clothing is an investment, and you should think of it that way.”

The startling jump in price is the first the retail industry has seen in 30 years, Kraus said, and before that, there had been slight deflation. However, he said his is an upscale store, and the retailers that would be hit the hardest would be, as he described them, “the T-shirt guys down the road.”

“There’s a lot more leeway in those trading in the above-average price-point area,” he said. “From the bottom, there’s nowhere to go. When the lowest gets raised, there’s no recourse. You can’t buy T-shirts any lower than they have been, so they’re going to be feeling it.”

For those seeking out winter clothing, the greater amount of fabric hasn’t resulted in a bigger jump. In fact, the cost of wool has stayed constant, Nyquist said, because “we haven’t invented a new animal.”

For retailers all over the area, the hunt is on for suppliers who have managed to keep their costs down, and Nyquist and Kraus both said they’ve had to get creative when it comes to looking for products.

However, sometimes, a 100-percent cotton item is wildly popular, and retailers have to keep selling it and raise the price. Nyquist said she had an item that has increased 17 percent in price.

“There wasn’t anything I could do about it,” she said. “I’ve told the customers I’m sorry, but it is what it is.”

Source: http://www.delmarvanow.com/article/20111225/NEWS01/112250304

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