Clothing makers plan to raise prices in 2011 as they struggle to absorb the impact of soaring cotton costs, The Wall Street Journal reported. It cites companies including Hanesbrands, Jones Group and VF as planing to raise prices by as much as 10%.
"The world has radically changed," Richard A. Noll, CEO of Hanesbrands, told The Journal. "There is a clear understanding that prices need to go up in this kind of environment."
The price of cotton, along with other commodities such as rubber, is rising as demand from Chinese and Indian consumers meets a limited world supply. At the same time, floods in Pakistan and heavy rains in China have hurt world cotton output.
The rising prices come after at least 10 years of falling clothing prices, retail consultant Emanuel Weintraub told The Journal. Now, retailers will have to play hardball with clothing suppliers to limit price gains at a time when consumers are watching every penny.
"Some of the smaller firms could be forced out of business," Weintraub said.