Higher prices: the big trend for back-to-school Stores are trying everything they can think of to disguise the fact that you're going to pay more for clothes this fall. Some are using less fabric and calling it the new look. Others are adding cheap stitching and trumpeting it as a redesign. And the buttons on that blouse? Chances are you're not going to think it's worth paying several dollars more for the shirt just to have them. Retailers are raising prices on merchandise an average of 10 percent across-the-board this fall in an effort to offset their rising costs for materials and labor. But merchants are worried that cash-strapped customers who are weighed down by economic woes will balk at price hikes. So, retailers are trying to raise prices without tipping off unsuspecting customers. "Let the consumer trickery begin," said Brian Sozzi, Wall Street Strategies retail analyst Retailers have long tried to mask price hikes - for instance, jacking them up more than needed so that they can offer a "sale" on the higher price. But the new strategies come as merchants' production and labor costs are expected to rise 10 percent to 20 percent in the second half of the year after having remained low during most of the past two decades. Costs can quickly add up: Raw materials account for 25 percent to 50 percent of the cost of producing a garment, while labor ranges from 20 percent to 40 percent, analysts estimate. Stores already have passed along their rising costs to customers by raising prices on select items. The core Consumer Price Index, which includes spending on everything except food and energy, rose 0.2 percent in July, the Labor Department said Thursday. But now that production costs are going up even higher, merchants are increasing prices on a broader range of merchandise. Because of their concern that shoppers will retreat, though, retailers are treading the line between style, quality and price. Some merchants are making inexpensive tweaks -- additional stitching, fake button holes, fancy tags -- to justify price increases. Those embellishments can add pennies to $1 to the cost of a garment, but retailers can charge $10 more for them, said Marshal Cohen, chief industry analyst with market research firm The NPD Group. "We're not seeing deflation or inflation; we're seeing con-flation," he said. "Stores are making consumers believe their getting more for their money." After the price of the fabric for its girl's corduroy pants almost doubled, catalog retailer Lands' End, based in Dodgeville, Wis., raised the price of the pants by $7 to $34.50. The company, a unit of Sears Holdings Corp., also added buttons and stitching on the pockets to dress them up. "Consumers are going to notice the price differences," said Michele Casper, a Lands' End spokeswoman. "But they are also going to get a lot of added benefits so they know they're not getting short-changed." Others are taking away things, but marketing it to customers as the latest trend. Spencer Elmen, owner of Cupid's Lingerie, which operates five stores in Arkansas, said he is seeing more items in his store that are even skimpier than usual, from underwear to mini dresses. He says that's because designers are finding clever ways to conceal the fact that they're clothes have less fabric. Elmen said $39.99 teddies, which are $5 more than that they were last year, feature a studded heart that gathers up the material to disguise the fact that less fabric is being used. He also noted that the corsets with fishnet patterns are priced about 5 percent more at about $49, even though they also have less material. "They're just being more creative with less fabric," Elmen said. Teen retailer Abercrombie & Fitch is advertising "Redesigned 2012" jean collection in its stores and on its website, touting that the jeans are "softer, with the perfect amount of stretch." They're also mostly priced between $78 and $88, about $10 more than last year, according to Jennifer Black, who heads up research firm Jennifer Black & Associates. Sozzi, the Wall Street Strategies retail analyst, examined the jeans and believes they are "thinner" and of "cheaper quality." That extra stretch, he says, simply could mean the retailer is saving costs by using less denim. Eric Cerny, an Abercrombie & Fitch spokesman, declined to comment. But Cerny reiterated what executives told investors in recent months: the bulk of increases on items will start to happen in September and the chain will not sacrifice quality to achieve cost reductions. Bill Melnick, director of strategic planning at SAI Marketing, which studies consumer behavior at major consumer brands, said most shoppers may not notice retailers' tactics to disguise prices. But he says shoppers won't buy if they can't afford it. "Shoppers are being pragmatic," he says, nothing that they think "'If it fits into my budget, then it's a sale.'" Rhonda Sayen, a Stephens City, Va., resident, said she checked out prices on new fall items and noticed jeans that were about $40 a year ago are now closer to $60. She also said she's spotted lower quality T-shirts at some of the stores. "I know prices have changed," said Sayen, who added that she and her husband are sticking to a $400 budget for clothing and supplies for her four children ages 3 to 18. "You ain't fooling me." http://hosted.ap.org/dynamic/storie...ME&TEMPLATE=DEFAULT&CTIME=2011-08-19-10-27-42 The summer of Obamanomics will not be soon forgotten. That much is certain. The holiday season will likely be a bust, and the first quarter of 2012 will be downright Darwinian. I wonder what national retail chains will close after three full years of Obamanomics. _
They cite increased labor costs (+10%) as the main reason prices are going up. I don't think that means they are paying the Old Navy cashiers more money.....I think that means the standard of living in Thailand and China and Malaysia is rising a bit and their overseas sweatshops have to pay a little bit more to the workers.
"After the price of the fabric for its girl's corduroy pants almost doubled, catalog retailer Lands' End, based in Dodgeville, Wis., raised the price of the pants by $7 to $34.50." Sounds like inflation. _
Material costs rising also come down to the same slight rises in foreign labor costs. Almost all the world's cotton now comes from China and India where the standard of living is rising slightly.
Well theres something to look forward to. My kids will be going back soon, time to empty the wallet. Perhaps they should give free clothes to all kids, so the ones who cannot afford the nicer brands wont "feel bad".
I dont know if you know this but the yuan is really starting to rise now......if you think prices are rising now just wait until next year when everything made in china costs on average 20% more
exactly....people dont realize that there is a silver lining to the currency crisis thats coming.....since americans will no longer be able to afford imports then there will eventually be a rebirth in industry in the US.....everything from clothing to electronics to appliances! Tarriffs need to rise also though!
Not really. The way it is more likely to work out is that they'll just shift to Bangladesh or Cambodia........lowest bidder.....
probably...I think china got so many jobs wasnt just the low wages, but the stability of their govt....stability hard to find int he developing world
that I agree with... but Obamas OutSourcing Czar, Jeffery Immelt, wont allow that to happen because his factories are now all in China, and he'll lose money.
Buying clothes for "back to school"? I don't get it. Back to school shopping when I was a kid (ye olde 90's) meant buying school supplies. Yet again, I wore a uniform anyway.
the main reason why tarriffs wont come back is because the ones that are making a killing making products in china are lobbying hard to keep things as they are....they contribute to both political parties so I am sure both parties listen and obey their wishes!
Well at least some types of jobs will be/could be returning. Or what we could do, is just "wipe" all this debt into the sun. Bring all the world's inflated dollars/yuans/euros and other currencies into a space ship and shoot it in the sun. We can kill inflation with our sun!
