U.K. Apparel Retailers Absorbing Costs

By Jim.Robinson|October 7, 2010

Cotton prices might be at their highest level since 1995, but British consumers probably aren’t aware of that fact. That’s because U.K. apparel retailers have continued to absorb rising costs rather than pass them on to consumers, especially for lower-priced items.

There has been very little inflation in apparel prices in recent years, but that trend is about to change. The price of women’s clothing has already increased more than five percent for this fall season, according to Verdit Research, and men’s clothing could rise by as much as eight percent in the coming year. Combined with an increase in England’s value-added tax, from 17.5 percent to 20 percent, the pressure will be on retailers to keep prices for entry-level products stable and make up the costs on higher-end products.

For example, in order to maintain the cost of its least expensive shirts at US$47, Charles Tyrwhitt — England’s largest mail-order shirt retailer — will raise prices of US$312 suits and US$155 shoes by “adding more value with workmanship and design,” Nick Wheeler, the company’s founder, said in a story published Oct. 5 on www.Bloomberg.com. Wheeler also said that reducing quality or adding polyester blends to the shirts would be a mistake for retailers under current market conditions.