Apparel Retailers Check Out Prices

SOURCE: http://online.wsj.com/article/SB10001424052748704476104575439112892856830.html?KEYWORDS=retail
Published: August 20th, 2010

Cotton prices are rising, along with freight costs and labor rates, this is trend results in the need for retailers to raise the prices of their clothing products. However, the problem lies with the fact that the consumer is still accustomed to the low prices featured during our economies downfall. The competitive retail environment is very sensitive, and though one company noticed a trend of increased number of transactions, the transaction size was noted to have declined because of the lower average prices paid.


The only option many companies, such as Gap Inc., Aeropostale Inc., and Buckle Inc. see as feasible is to raise their prices. Stage Stores CEO Andy Hall replies to this possibility stating "The market has kind of taken a wait-and-see approach to how much they can pass on, or we can pass on, to the consumer. I am not very optimistic that in today's environment the consumer is going to take a price increase." As the article states, another teen retailer hope to justify the price increase by adding embellishments to its products, still a gutsy move. I know as a consumer I would not be happy with a significant price increase to a product that has not changed, so we shall see how this plays out in the upcoming months.


--Leah Stoltz