AUG. WHOLESALE PRICES OFF 0.2%

Byline: By Joanna Ramey

WASHINGTON--The Labor Department reported Thursday that wholesale prices for U.S.-made women's apparel in August decreased 0.2 percent against July. Analysts say it reflects the continued struggle for manufacturers to stay competitive.
Analysts had expected a slight uptick in prices in August since retailers seemed buoyed by back-to-school sales. And though on a year-over-year basis women's apparel prices inched up 0.6 percent, analysts say the increase doesn't indicate a resurgence in apparel inflation. This year the 12-month comparisons in women's apparel prices have fluctuated slightly above and below the even mark. In July the prices increased 0.2 percent, and in June they were up 0.8 percent, but in May they were down 0.3 percent.
"I'm mildly surprised," said Jeff Sands, national apparel practice director for KPMG Peat Marwick, of the monthly price drop in women's apparel prices. "The sense I was getting was that prices were firming up a bit because stores had finally run out of inventory and needed to reorder. But there is no question there is still pressure on apparel makers to keep prices low."
With large brand-name apparel companies like Levi Strauss, Liz Claiborne and VF Corp. cornering more retail space, and the desire among retailers to do more private label, manufacturers need a way to stand out from the great mass of makers, Sands said. Absent a novel product, the one way they can be sure to get retailers' attention is through value pricing, he said.
Carl Priestland, economist at the American Apparel Manufacturers Association, said that even with back-to-school sales showing improvements against last year, retailers are still fighting each other for sales. This, in turn, continues to put pressure on apparel makers to keep prices in check.
"The competition is still out there," Priestland said.
Donald Ratajczak, director of the Georgia State University Economic Forecasting Center, said apparel makers are "vying for survival," which is translating into prolonged lower wholesale prices.
"Manufacturers are still trying to position themselves. What we are seeing is continued pressures to cut costs and then deliver those lower costs to the retailers," he said.
All apparel prices also posted a decline, dipping 0.2 percent for the month. Over the year, apparel prices were up 0.7 percent. Prices for men's and boys' apparel also declined 0.2 percent for the month, but were up 1.4 percent against August 1995. Prices for girls', children's and infants' apparel were unchanged last month and up 0.6 percent from year-ago levels.
In the overall economy, a jump in food and energy prices pushed the prices for all wholesale goods up 0.3 percent in August, the largest jump in five months. Absent the volatile food and energy categories, wholesale prices actually declined 0.1 percent.
Meanwhile, among the women's apparel categories with large wholesale price fluctuations in August were suits, which dropped 14.9 percent for the month and plunged 23 percent against year-ago levels. Prices for skirts were unchanged for the month and increased 0.6 percent over the year. Prices for sweaters, jackets and jerseys were unchanged for the month and increased 3.9 percent against August 1995. Dress prices increased 0.2 percent for the month and were up 0.1 percent over the year, while prices for blouses were unchanged in August and increased 3.9 percent over the 12-month period.
Wholesale prices for textiles increased 0.2 percent for the month and were up 1 percent over the year. Synthetic fiber prices were unchanged in August and up 1.8 percent compared to August 1995. Prices for processed yarns and threads increased 0.3 percent for the month and were up 1.1 percent over the year. Greige goods prices increased 0.2 percent last month and over the year. Finished fabric prices also increased 0.2 percent in August, but were up 1.3 percent from year-ago levels.

To Read the Full Article
SUBSCRIBE NOW

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus