Festival Blues: Garment prices to rise 40%

Buying new clothes this festive season will come heavy

on the pocket as customers can expect prices of garments such as a pair of jeans, trousers or shirts to rise by 40 per cent. Retailers and brands are passing off the 10 per cent excise duty imposed in the last Union Budget. Moreover there has been a 15 per cent rise in input costs and a 15 per cent rise in labor charges. In fact, a slowdown is expected by the year-end. So, attractive offers such as ‘Buy one get two free’ will be difficult to find around Dassera and Diwali this year even though most retailers are clearing old stocks to make way for the new ones on their shelves. What’s more, the soon to be launched festive collection will sport a heavier price tag. Earlier it was possible for garment producers and retailers to offer attractive schemes to consumers because of adequate supply as well as administrative and operational costs being under control. According to Vijay Purohit, President, Gujarat Garment Manufacturers Association supply is a bit restricted as due to labor shortage, many garment manufacturers, despite paying higher labor charges, may not be able to tackle rising demand.

Raw material costs have been the biggest concern for apparel makers since last August. Raw materials account for around 80 per cent of the garment production cost. Even though cotton prices are down, large clothing companies have no plans to reduce prices and pass on the benefit to consumers for propping up falling demand. The apparel industry also faces a time lag of seven months from sourcing yarn for fabric to production and retail sale. Prices can drop at the earliest only from next February.