Designers hunting for next season's newest and most innovative fabrics are likely to feel the impact of the weakening U.S. dollar and rising prices for energy and raw materials.
Fabric suppliers around the world are seeing their prices increase at many stages in the development process. Increasing oil prices affect not only the cost of manufacturing man-made fibers such as polyester and rayon, but also boost the cost of transporting the goods from factories to ports and onto boats or airplanes. European mills have been facing an additional threat to their profit margin in the form of poor currency exchange rates.
"Higher prices are a concern for everybody," said Joanne Satin, owner of Beyond the Loom, a domestic textile manufacturer. "From a manufacturing point of view, we're being surcharged by all the services that go into the fabric."
Satin said she has seen some of the biggest increases associated with transportation costs. The high price of oil has meant higher expenses for moving the goods throughout the product development life cycle, from a dye facility to weaving mills.
"The processes that go into producing fabric have all become more expensive,'' Satin said. "This price has been creeping up. Trucking fees are almost double from what they were five years ago."
Those designers, brands and retailers working with overseas manufacturers have adjusted to dealing with longer time frames, Satin said, allowing them to save money by bringing goods into the country by boat.
The cost of raw goods is another factor having an impact on fiber and fabric prices. Wool, for example, has seen prices jump. According to The Woolmark Co., one pound of wool cost $3 at the end of 2006. By June 1, the price had increased 27.7 percent to reach a high for the year of $3.83 a pound. Prices in August have since retreated to $3.41 a pound, but this still represents a more than 30 percent jump compared with the $2.57 a pound reported in August 2006.
Cotton prices also have been on the rise. The average price of one pound of cotton for December 2006 was 56.5 cents, according to the U.S. Department of Agriculture. In July, the average price for one pound of cotton had risen 12.8 percent to 63.74 cents.Another factor: Decisions made by the Chinese government on economic matters can have sweeping influence. Recently, the Chinese halted the subsidy on rayon, which has resulted in an immediate price increase.
"My average item, it may have affected the cost by 30 or 40 cents a yard," said Craig Fruchtman, a partner with New York-based textile converter JBC International Textile Group.
That cost increase will ultimately affect the price of middle-market goods, he said.
"When the rayon price increased, people didn't know what to do, especially when it came to the commodity products," said Parag Tahilramani, vice president of marketing for Kumarco, which produces fabric in South Korea and China. "What ended up happening is that people that had stock goods, they were sold out because they were the only people able to offer previous prices. But even they increased their prices. Prices have stabilized since, but it shows how fragile the market is."
Tahilramani said designers are waiting longer to make their fabric decisions. They want to see what's in the market and get a sense of what's working before they commit. Their unwillingness to take risk puts pressure on the mills and leaves little time for error.
"People don't have time for any mistakes," he said. "If something goes wrong, the whole order can be canceled on a whim."
Kathy Miller, co-owner and design director of Michael Miller Fabrics, acknowledged that designers have come to expect lower prices.
"There is an expectation that things need to be cheaper because of competition from China, but I think there's also a realization now of you get what you pay for," said Miller.
Following the fashion trends also comes at a cost. Phillip deLeon, designer and co-owner of print house Alexander Henry Fabrics, has seen an uptick in the popularity of print fabrics. Although it's good news for his business, it puts designers in the position of either paying for an exclusive design or picking a more common print design that they hope won't be widely used by others.
"Certainly, what they're beginning to showcase in the previews for spring, there's print all over the place," deLeon said. "But it's a huge challenge to find that print that will define you and separate you."Smaller designers may not be able to handle the minimum fabric limit for an exclusive design. Minimums are a constant problem for designers, particularly when dealing with overseas mills. That may be changing.
"A number of countries overseas are trying to lower those minimums and trying to keep surcharges down if you go below the minimum," deLeon said. "Everyone is eager to get more business so they're trying to bend their rules."
Ron Kaufman, sales executive with Robert Kaufman Fabrics, said designers have become more comfortable with paying higher fabric prices. He attributed some of this to the booming premium denim market of the past five or six years.
"I think it helped the overall market," Kaufman said. "People are appreciating things that are more handcrafted."
As the premium denim craze has waned, designers have sought to expand into other areas besides denim, but their love of fabric has carried over.
Eco-friendly fabrics are another area where designers are willing to pay a premium.
"The end consumer understands eco-friendly and is willing to pay for it," Kaufman said. "I think this is going to be a longer-term thing."
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