LUXURY FIBERS: DEMAND, PRICES UP
Byline: Michael McNamara
NEW YORK — Prices for luxury fibers continue to climb, and for the most part, no easing of the situation is foreseen in the near future.
Fueled by higher demand, poor weather conditions around the world or just fewer sources of supply, the increases over the last year have hit, in most cases, 30 to 40 percent. How much higher prices will climb is unknown, but the textile industry consensus is that these factors will keep most prices at least at current levels through 1995.
Many fabric executives said that because wovens, especially coatings, generally have a greater fiber content, the woven apparel market will feel the impact of higher prices more acutely than the knit market.
Still, they also said that apparel made from luxury fibers are considered “investment purchases” and that an increase of $15 or $20 on a suit already costing $400 won’t deter consumers.
“When we’re having these price increases, at the better level, they usually get picked up and carried along,” said Howard Bloom, president of Chetta B, a bridge dress firm based here. “I just think, in certain apparel categories, people will pay.”
“The increases have been here, they’re real and we have to deal with them,” said Bud Konheim, president of Nicole Miller Ltd. “We will try to maintain prices, provided it only sacrifices a small amount of margin.”
Price increases for the key luxury fibers include:
Pima cotton has risen to between $1.20 and $1.30 per pound, up from between 95 cents and $1 a year ago.
A kilo of type 3A raw silk, the most commonly used variety of the fiber, is selling at about $28 a kilo, up from about $23 to $24 a kilo last year. Two years ago, that same silk fiber was selling at about $20 a kilo.
Linen flax fiber is now priced around $2.50 to $2.60 per kilo, up from $2.30 a kilo last year. Two years ago, the fiber sold for roughly $2 a kilo.
White dehaired Chinese cashmere, used primarily in knit applications, went from $75 to $80 per kilo in January 1994 to $130 at the end of December. Since that time, however, it has leveled off to between $110 and $115 per kilo. Iranian cashmere, a coarser variety more commonly used in woven applications, is now between $40 and $42 per pound, up from $25 to $30 per pound.
Camel hair, a luxury fiber only slightly coarser than Iranian cashmere, has jumped to about $9 per pound, up from $7 per pound last year.
The three varieties of mohair — adult, young adult and kid — have gone to an average price of between $3.15 and $3.25, up from about $1.58 a pound last year. (For more on mohair, see separate story this page).
Here, a look at the prospects this year for several luxury fibers.
While upland cotton, the more common, shorter staple variety, had dramatic price hikes in 1994, pima cotton only started to increase in November.
Poor weather in Egypt and the former Soviet Union, two areas that in addition to the U.S. are key growers of pima cotton, was the primary reason for the price gain, according to Jess Curlee, executive director of the Supima Association. Supima is a conjunction of the words “superior” and “pima.”
When it comes to apparel, the fiber’s major inroads have been made in the men’s wear market.
“The women’s wear market in the U.S. has had a tough time accepting pima cotton,” Curlee said. “People in the U.S. are not accustomed to paying a lot of money for something that has cotton in it.”
Worldwide, however, pima cotton continues to gain. U.S. pima cotton production in the current season is expected to hit about 342,000 bales, said Curlee, noting that the U.S. will export, this year, about 375,000 bales, drawing the extra cotton from a reserve.
Curlee said he is optimistic the domestic market is picking up; U.S. mills are slated to use 85,000 bales this year, the most in 20 years.
“I think the mills are starting to see that they can do some interesting things with pima cotton,” Curlee said. “We are going to try and build on that, trying to get it into underwear and ready-to-wear applications.”
Most executives expect the use of silk in the apparel market will be level through the first half of this year.
“I think business will start picking up in the second half of this year,” said Jeffrey White, president of S. Shamash & Sons, an international manufacturer of silk fabrics. “While the price of the fiber has risen, the fabric prices have been relatively flat because demand has been soft.”
Also, while up, the prices are still far below the nearly $40 a kilo they hit in 1989.
White said the U.S. silk market has been soft due to an influx of cheap men’s wear and women’s wear apparel items. The stores, he said, “are flooded with inventory.”
According to U.S. Department of Commerce figures, imports of silk textiles and apparel in 1993, the latest available year, were $2.7 billion, up from $2 billion in 1992 and $1.6 billion in 1991.
“When 1994 is tallied, it will probably show $2.4 billion in imports,” White said. “So, as imports decline and as stores get cleaned out, we’ll see an uptick in business.”
In an effort to become closer to silk supply, Shamash has opened a degumming factory in Wuxi, China, two hours west of Shanghai.
“This makes us a vertical supplier, buying the gray goods and processing them ourselves,” White said. “The biggest challenge in being an international textile supplier is quality control.”
Executives said the high price for the fiber stems from the fact that linen continues to gain as a year-round fiber, and that Europe is still rebounding from its poor crop of 1991. However, those same executives said that as more acreage becomes earmarked for linen, costs could at least flatten.
Shamash, which made its first full-fledged foray into the linen market in July, when it established JS Linen, a division that sources and produces linen fabrics from around the world, is also reporting strong business, especially in linen blended fabrics.
“Right now, a fabric blend of linen and rayon is the hottest thing in the market,” claimed Shamash’s White, noting sales are especially strong in jackets and sportswear. “It’s strong anywhere from 85 percent rayon and 15 percent linen to 45 percent rayon and 55 percent linen. But we are also seeing a demand for 100 percent linen.”
Cashmere and Camel Hair
Although prices continue to climb, executives said they are not at the point where people are turning away from purchasing cashmere apparel.
“We’ve just gotten to the price point where cashmere used to be and should be,” said Richard Forte, president and chief executive officer of Forte Cashmere, a dehairer and comber of cashmere and an importer of cashmere sweaters. According to Forte’s estimates, the U.S. cashmere apparel market at retail is about $1 billion, with sweaters accounting for about $200 million.
“I don’t think we’ll be hurt too much by the price of cashmere,” Forte said, “In fact, the image of cashmere will be significantly enhanced. It’s not going to appear in low-end stores anymore.”
Boris Shlomm, president of Amicale Industries, added that cashmere last year came off an unusual period of low prices, resulting from low demand due to global recession in the early Nineties.
“We’re in a classic cycle,” Shlomm said. “Demand last year outstripped supply. Once prices stay high, demand at the low end will end, and prices will ease again.”
As for camel hair, often considered “the poor man’s substitute for cashmere,” it is becoming increasingly important in blends, particularly with silk.
“Now [camel hair] is beginning to be used more in fancy applications and getting more color,” Shlomm said.
Forte added that camel hair, traditionally used almost solely in weaving applications, “is gaining a wider acceptance in knits as well.”
Forte, for 1995, will be offering a line of camel hair sweaters.
“If prices for cashmere get too high, we’ll steer people to other luxury fibers, like camel hair,” said Peter Warshaw, president of Warshaw Woolens. “Still, while camel hair is great, it doesn’t have the impact of cashmere.”