The price of crude oil has been hovering around its 52-week low and over the past three years WTI crude oil has dropped by 50 percent. According to the Bureau of Labor Statistics Consumer Price Index report on Wednesday, all major energy components have declined over the past 12 months. The gasoline index has dropped by 22.3 percent and fuel oil by 29.7 percent over the past year.

The price of oil has caused drilling activity to slow, but with OPEC flooding the market and keeping supplies high, prices remain low. The Department of Energy reported on Tuesday that crude inventory had its biggest weekly build since April despite production cuts.

At the beginning of the year, many in the retail industry were encouraged by the low price of oil, believing savings would translate into apparel purchases. Jefferies analyst Randal J. Konik wrote, “Our survey showed personal savings and debt repayment are likely to remain top priorities for consumers as gas savings accumulate, but retailers could start to see a meaningful benefit as 55 percent of survey participants expect to spend more in consumer discretionary categories over the next six months, assuming gas prices remain low.” That didn’t happen.

The hope was that the money consumers saved at the pump would be used to make apparel purchases. According to, the national average of gas prices is 78.1 cents cheaper than one year ago. Retail sales however, peaked in March and have declined since.

Apparel brands and cosmetic companies may still benefit from lower oil prices, but instead of increased sales it will be due to lower raw costs as 40 percent of all textiles contain crude oil.

Great American Group in the Textiles Monitor December 2014 issue wrote that “synthetic fiber pricing had declined based on decreases in crude oil pricing. Prices for nylon and polyester filament yarn and chips experienced sharp declines at the tail end of 2014 and through the first quarter of 2015.”

During the recent earnings season, companies began suggesting that their raw costs may be dropping as a result of the sustained lower price of oil. Ralph Lauren said that it expects lower product costs due to lower oil prices. Nike said that it expects to see some benefit from lower oil. Neither company wanted to comment any further.

Cosmetics companies are also big users of oil products, even though they are trying to shift to plant-based oils. Unilever sells petroleum oil-based products like Vaseline and Ponds cream. Jean-Marc Huet, chief financial officer and executive director, Unilever NV said in the 2015 second-quarter earnings call, “You may know out of our basket of around 20 billion euro of commodities, around 20 to 25 percent is directly or indirectly affected by oil. That takes around four to six months to work through all the normal forward covers and get into our P&L.”

So, while some companies will benefit from lower oil prices, others are hurting as their oil field workers lose their jobs. Retailers that benefited from big increases of oil patch workers are sure to feel the pain when those same workers lose their jobs as oil companies begin cutting back. More than 100,000 oil workers have lost their jobs as the price of oil has declined.

This reduction in labor has hurt western retailer Boot Barn. Chief executive officer at Boot Barn James Conroy said during the second-quarter conference call, “Turning to our store base, and specifically those stores directly impacted by oil and gas. And as a reminder, we have 15 stores that we have identified as oil and gas stores, nine of which are in drilling markets and six are in refining markets. Conversely, we had weakness in ladies’ apparel and in work apparel, particularly flame-resistant merchandise, consistent with weakness in the stores in oil and gas markets.”

Other companies that benefited from increases in oil workers were Red Wing Shoes and Carhartt. Both companies are private, but both had to ramp up when workers began flooding into the Northwest for fracking. Rig counts have dropped 53.8 percent from last year according to the U.S. rig count from Baker Hughes. So it stands to reason that as fast this business was created, it is declining just as quickly. Neither Red Wing or Carhartt responded to a request for comment.

Kohl’s noted in its earnings for the second quarter that Texas and primarily the Houston market had been weak. Kohl’s mentioned weather, but then stated that market had been tough all year. Energy recruiting firm Swift Worldwide Resources said the deepest oil field cuts occurred in Houston.

While some oil experts believe oil could drop even lower to $30 a barrel, Dan Dicker thinks this is the last trip down, but he doesn’t expect prices to spike back up. “You’re at the point where not only won’t you see new lows. I think we’re here. It may sit here and it won’t rally very fast.”

Virginia Bodmer-Altura from Textile Futures said that polyester fiber made from PET (polyethylene terephthalate) should remain depressed. “If oil prices stay around $50 per barrel, PET prices should remain around 25 percent lower than last year.” That, plus overcapacity from China, will keep prices down. “Together these factors suggest polyester prices will stay low at least until the end of 2015.

While apparel-makers are only hinting at lower raw costs now, if oil prices remain depressed it is expected they will mention it even more in the coming quarters. Those retailers hurting from losing its oil field customers can only hope those workers find other employment quickly. Of course, the hope remains that consumers will finally begin spending those gas savings and do some shopping. Wal-Mart said its sales were helped by lower gas prices in the last quarter, but Target only said that its customers used gas dollars to pay their credit cards.

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