Desperately Seeking Stability
January 24, 2011-- Home Textiles Today,
"The consumer is already getting less for the prevailing price point, and the canny ones have surely noticed already."
Jennifer Marks EDITOR-IN-CHIEF
What's that crunching sound? De-specing. All as anticipated, of course. But there was palpable relief as the week progressed. Things are moving forward despite the turmoil.
Equally anticipated: a settling down of cotton prices. Nobody I spoke with expects that to happen before the third quarter - regardless of whether they lay the blame for volatility at the feet of hedge funds and speculators (as some do) or consider this a perfect storm of supply/demand/ weather events or (in many cases) both.
As for poly and other alternative fiber price increases, consensus holds they lock when cotton does.
Once cotton prices settle, most believe they will do so on the high side, relatively speaking. The consumer is already getting less for the prevailing price point, and the canny ones have surely noticed already.
One U.S. sales rep said his 100-sheet roll of paper towels now comes at the same price but offers only 82 sheets. Another recently looked at the fine print on his favorite 12- oz. beer and discovered the bottle contained 11.5 ounces of brew.
Several manufacturers cop to considering inflation a good thing. And after so many years of price deflation, who could blame them?
Maybe they're not alone. TJX president and ceo Carol Myerwitz told analysts during the company's third-quarter conference call a couple of months ago that inflation is "a positive move for our business."
But maybe that's a bit of gloss.
At turning points in the industry, there is always one retailer held up as emblematic of What's Wrong Here.
At one point it was May Company and charge-backs. Then it was Bed Bath & Beyond and charge-backs. Then it was Target and reverse auctions. Then it was Target and in-house product development. Then it was JCPenney and in-house development.
Now it is TJX and ... well, there's no easy word for it. Let's just say somebody's piling up shoes and belts and such where hometex inventory isn't. TJX was truly the singular retailer talked about at the show.
The big question mark: Pulling the trigger for back-to-college dorm stuff or no? Time is growing short. Ah, sweet mystery of life.
Related Content By Author
Online Moves From Afterthought To Main Thought For Textiles Suppliers