This week the US dollar, the currency of choice for retailers and suppliers sourcing in the Far East, rose to US$1.77 against the pound, leading to speculation that price rises of 6% could be in store for spring 09 product. Of course it is just that – speculation – at this stage. Major retailers and suppliers buy currency in advance, and how long or short their currency hedge is will have an impact, as will the performance of the pound going forward. Any price rises there may be could take a while to come through.
But there is anecdotal evidence to suggest that some are already feeling the pinch; one supplier commenting on www.drapersonline.com claimed to have already had to pass on price rises to multiples as a result of the movement, and at the time of writing 86% of respondents
to a poll on Drapers’ website claimed that the weakening pound would affect their business. Equally, those buyers heading to New York next week are likely to find those US labels, which last season looked so attractively priced, that bit more expensive if they haven’t bought their dollars in advance.
Of course, there is a silver lining for some. A cheaper pound means that UK brands should prove more attractive to overseas buyers, which may provide a confidence boost ahead of London Fashion Week, which follows hot on New York’s heels. We just have to hope that the international buyers come along with money to spend.
Lauretta Roberts Editor