Retailers and brands will use a combination of re-engineered price points and January’s VAT rise to mask rising prices on leather, silk and wool from the consumer next spring.
Lifestyle brand Henri-Lloyd said it planned to increase the number of price points within each £10 bracket to “remain competitive” and soften the blow to shoppers - a strategy it said other brands were also pursuing.
Meanwhile, several mutltiple retailers, which did not want to be named, told Drapers that they planned to hike prices above and beyond next year’s VAT increase to 20% to offset yet more increasing costs of raw materials.
The fashion industry has faced massive rises in the costs of fabric and textiles this year, led by a poor cotton harvest. But the price of raw leather, silk and wool have been impacted more recently, heaping additional price pressure on the sector. Leather in particular has experienced soaring prices because of increased demand due to the recent trend towards the material.
Ian Cartwright, managing director of footwear brand Base London, said leather prices had risen by between 8% and 20% in the past year.
He said: “We’ve had to put prices up by between 4% and 5%. We swallowed the cost when the pound dropped against the dollar about a year and a half ago. That cost us three quarters of a million pounds, and there’s only so much we can absorb. We’ve put more detail and extras onto product though.”
Graham Allen, commercial director at lifestyle brand and retailer Henri-Lloyd, put the rise in leather prices closer to 100%, but added that the leather market was particularly volatile.
“Instead of pricing an item at either £50, £55 and £60, we are going with, for example, £50, £52, £54, £55, £56, £58 and £60. It gives more flexibility,” he explained.
The price of silk and wool have also increased, although not at the same rate as leather. Sources said silk prices had been affected by a dip in the productivity of silk worms.
Grant Liddell, retail director at freight and logistics company Uniserve, said: “It’s a simple case of supply and demand and that comes down to fashion… Prices will have to go up.”
Meanwhile, other multiples said that they would put more design detail into product rather than simply “trick” shoppers with the VAT rise.
Nick Mather, chief executive of lingerie chain La Senza, which uses a significant amount of silk, said: “We’re focused on providing value for our customers and we’ll change ranges to ensure we can do this.”
By contrast, smaller brands said they had no choice but to pass on their increased costs.
Nathan Brown, managing director at premium footwear brand Lodger Footwear, said : “Some of the larger players have been able to absorb the increases by taking something out of the quality, but for a higher-end brand, this just isn’t possible.
“We’ve explained this to our customers and they haven’t wanted to see us destitute or to compromise on quality, so they haven’t pushed back against price rises.”