NEW YORK — After two consecutive years when pure cashmere and cashmere and wool blends were the leading fabrics in the dressy coat market, a fabric price hike of 25 to 35 percent is looming, posing a threat to future business.

Textile and coat executives say the jump in prices stems from the raw material growers in China, the primary source of raw cashmere. Most feel that increasing demand in the past two years has caused a shortage, thereby raising prices.

Boris Shlomm, president of Amicale Industries, said cashmere is coming off an unusual period of low prices that had been the result of low demand due to the recession in the U.S., Europe and Japan. As economic conditions improved, the demand for cashmere increased.

“The U.S. started to get out of its economic problems first,” Shlomm said, “and there was excellent value being offered to the consumer.”

This, he said, was followed by better business conditions in Europe toward the end of last year, as well as an increase in cashmere sweater production and consumption in China. He also noted that a secondary source of cashmere fiber — Afghanistan — has seen its industry virtually disappear because of the prolonged conflict there.

Shlomm said prices for the year are usually set at the Canton Fair, which was postponed in January because the market was in such flux and has been rescheduled to start this weekend. He said prices have already gone up 25 percent against last year, when Amicale’s goods sold for about $60 a yard, and thinks they could go up another 10 percent.

“It looks like we’re in a classic cashmere cycle,” Shlomm said. “Right now the demand has outstripped the supply. Once prices go up, the demand will decrease and prices will ease off again.”

He said the cashmere fabric business is divided among manufacturers and consumers who are purists and willing to buy 100 percent cashmere regardless of the price, and those who buy lower-priced blends of cashmere and wool and are therefore more likely to be affected by higher prices.

“We thought we had taken a very courageous and aggressive position in raw cashmere, but the demand is exceeding our expectations,” said Peter Warshaw, president of Warshaw Woolen.

Warshaw said in some cases his Chinese suppliers have stopped honoring their contracts for a number of reasons. One factor, he feels, is that there is more profit in spinning the fiber into knit yarns to manufacture sweaters. Another factor is that the Chinese population has become more affluent and demand for finished cashmere products within the country has increased.

“Right now it would be foolish to speculate how high prices might go or what kind of shortages there might be,” Warshaw said. “It appears that the fiber will cost more and will be in short supply.”

Warshaw said his firm is trying to buy cashmere where it can because at this point it is not covered for the year. Prior to the price hikes, Warshaw was selling goods in the range of $47 to $50 a yard.

“If necessary, we’ll try to steer people into using other luxury fibers, such as camel hair, mohair, angora or merino wool,” Warshaw said. “But nothing has the cachet of cashmere.”

Pier L. Guerci, president of Loro Piana, said he doesn’t expect to feel the effects of the price hike until later this year, a development that would then be refleHe said for this year the company had to increase its prices for pure cashmere only slightly. At $65 to $69 a yard, those prices are considered the highest in the market, but for the best quality, according to market sources.

“We’re booked to capacity for fall and we’ve covered all our needs,” Guerci said. “For next season it will depend on what happens when we go out in July to buy fiber for next year. We’re concerned that if things get out of hand there will be a substantial drop in volume.”

Guerci also described recent situations where he said the firm’s Chinese suppliers have canceled contracts or wanted to ship at higher-than-agreed-upon prices, but not in enough volume to hurt Loro Piana’s supply.

Meanwhile, manufacturers are waiting to see what happens, hoping that the fabric will not be priced too high for their products.

Ted Goldsmith, chairman of Bromley Corp., which makes the licensed Anne Klein, Anne Klein II, Evan-Picone and J.G. Hook coat lines, said while he has bought his first round of goods at prices comparable to last season, on any future goods, which he will need for reorders and later-in-the-season merchandise, he’s being quoted prices 30 percent higher than last year’s.

“The word is out to the stores, and the feeling is that most people are going to run out of the cashmere fabric they bought at the old prices,” Goldsmith said.

Goldsmith said his company is trying to decide whether to buy the same blends of cashmere and be forced to raise prices on future merchandise or lower the cashmere content of the fabric to keep prices stable. He said sales for fall are stronger than anticipated. He attributes that to stores’ awareness of the price hikes, which is leading them to book as much as possible now.

Steve Blatt, president of Searle Blatt Ltd., said he’s being quoted prices that are up 20 percent in the U.S. and 30 percent in Europe, although in the U.S. there are still some goods left at the old prices.

Blatt said that he bought a lot of cashmere early this year before the prices started going up, so he doesn’t expect to feel the effects until later this year when he starts looking for reorder goods.

Since Searle cashmere coats sell for $1,200 to $2,000, Blatt said he can afford to absorb increases up to 20 percent, although it could hurt his lower-priced Steve line, which sells blended fabrics at much lower prices.

“What I am worried about is that if the prices go back to $110 a yard, there will be no market,” Blatt said. “But I’ll worry about that if it happens. Right now business is great.”

Josh Lipman, president of Cuddlecoat, which makes the licensed Christian Dior coat collection, said cashmere was well received last season, and demand is up this year.

“We’ve secured delivery and price in cashmere for 1994, but there is strong concern going forward,” Lipman said. “I’ve never approached cashmere as the promotional football that some in the market have, and I’m prepared to pay more as long as it doesn’t go too high.”

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