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Soaring price of synthetics adds to cotton crunch pain

Increased demand for synthetic fabrics triggers 10% price rise, while power cuts slow Chinese factories.

The fashion industry is facing renewed pressure on margins following a 10% surge in the price of synthetic fabrics and yarns over the past six months, which looks set to continue into the autumn.

The price hikes, which mainly affect fabrics imported from China and the Far East, come as a blow to all fashion brands and retailers, but particularly those that have managed the increase in cotton prices by turning to man-made alternatives.

Last week, streetwear brand Fenchurch went into administration, blaming cotton price increases as one of the major factors.

The price rises are being driven by increased demand both from the Chinese and Indian domestic markets, and from manufacturers seeking alternatives to cotton; rising labour, fuel and raw material costs, including crude oil; and currency fluctuations. They are affecting fabrics such as polyester, faux fur (see box) and viscose. The price of synthetic-mix fabrics, where a man-made yarn is mixed with a natural fibre, is also reported to have increased by 25%.

Helen Webb-Carter, fabric and trims manager at premium retailer Reiss, said: “Yarn suppliers are trading synthetics [as a commodity] because they can [with cotton and wool prices so high]. It is right across the spectrum of products. We have been forced to look at re-sourcing everything.”

For suppliers, the rise in synthetic fabric prices is making it difficult to quote consistent prices to customers. Ciara Jennings, director of fabric supplier T1 Textiles, said: “If I quote a price and a customer wants to sample something, that price can’t be held if they come back two or three months later. I’m only quoting for six to eight weeks now.”

Peter Driscoll, managing director of PCI Fibres, a specialist consultancy to the fibres industry, said prices for short staple polyester, often used in clothing production, had risen to $2.20 (£1.36) per kilo from $1.30 (80p) per kilo a year ago, and that viscose, commonly used in outerwear, had increased to $3.65 (£2.26) per kilo from $2.85 (£1.76) last year.

He added that despite new synthetic fibre factories opening, demand was still outstripping supply.

There have also been reports that, due to high demands on the country’s electricity supply, Chinese factories have been suffering from power cuts since returning from the Chinese New Year break in February, which has delayed orders and extended lead times. Late deliveries plagued the industry last year, and were another contributory factor to the administration of Fenchurch.

Meanwhile, factories in India closed last week in protest at a new 10% excise duty on branded clothing unveiled by the country’s Government last week.

Faux fur trend drives up cost of high-quality fabrics

All-over fur and fur trims featured heavily on the catwalks and at trade shows for autumn 11, but brands and retailers seeking to tap into the trend face an increase of up to 40% in the cost of faux versions due to surging demand.

Nick Williams, director of mainstream womenswear brand Marble, whose autumn 11 range includes faux-fur coats, said: “Cloth we buy has gone up from £10 a metre to £14 a metre. We’ve really crushed our margin so we’re not too expensive.”

According to Ian Gregson, sales manager at faux fur importer Yorkshire Fur, prices have risen by a further 10% on orders placed after the Chinese New Year. It follows three price increases on faux fur last year.

Barry King, director at faux fur supplier and manufacturer Ambassador Textiles, said manufacturers were already struggling to fill orders. “There are four or five furs in our range that we should have got in January that we won’t get until April. There isn’t enough to go around,” he said.

King added that there were issues surrounding supply during the last autumn season after value chain Primark ordered 80,000 metres of faux fur to trim its outerwear.

“It had a dramatic effect on the [availability of fur for the rest of the] market and we couldn’t get our orders filled,” he said.

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