I just got a e-mail telling me that there will be a price increase on Gildan 2000G on Sept 1st, 2010. This is the 3rd increase in 2010. It hasn't been just this company. My 3 back up companies have had increases as well.
I got this message too.
My sales rep said it was something to do with all the cotton farmers. Apparently there is now more money to be made in pare seed because of eco fuel and so on so they will all be planting this next year. Therefore there is less supply of cotton and still a huge demand, equaling costs of cotton products to rise.
In response to the first post in this thread, the price increase you are hearing about is likely the wholesale distributor just now raising prices. We initiated a price increase earlier in the summer that some wholesalers chose to not pass on immediately. There has not been a "manufacturer" announced 2nd price increase in 2010 much less 3.
There are a lot of factors that have caused the increase with the price of Cotton being a large part. There is a sub-commodity market for yarn spinning (the step where they take ginned cotton fibre and twist it into the yarns that end up getting knit into the fabric that gets dyed, cut and sewn into shirts). The recession forced some yarn spinners to either close or change their machinery to make finer yarns so globally there is also a shortage of yarn that has impacted prices. India also temporarily initiated a block on exports which further dried up available yarns. The last (and possibly most significant reason) is that almost the entire manufacturing supply chain was caught off guard at how fast demand for cotton products has rebounded. Corporations are spending on promotions, people are travelling and going to concerts and fundraising efforts around the globe are booming. All these things led to the first price increase. While it is never an absolute indication of future price apparel increases it is always good to watch cotton prices on the futures market. Again the caveat is many other factors can impact on the price of products in the marketplace but establishing good contacts with your wholesale distributor should give you better information about possible future movements on price.
Garry Bell, Gildan
You're welcome. We are actively trying to moniotr the multiple forums/blogs and FB pages in order to make sure we are hearing the good, the bad and the ugly. From the monitoring we have been doing glad to see that its mostly good.
Guess you guys heard of another increase starting effective Monday, Sept 13 (emails just went out today on this one)...4-6% across the board on:
Anvil: 779, 979
Fruit of the Loom: 20230, 5930, 3931
Gildan: G200, G500, G800
Hanes: 5250T, 5280, 5170, 5180
Jerzees: 188, 363, 29M
Email states another increase will occur October 4, 2010. Port Authority and Port & Co will probably pick up some business if they hold their prices steady. They're pretty attractive currently against some of these other brands.
I should have also mentioned that there are many articles out there to read regarding Gildan's price increases....best one I've read is in the Montreal Gazette. Just go to google and enter a search like this: "gildan" "price increases" you'll see how their stock is faring and the real reasons on the price increases (cotton futures is just a small pc of the picture and really not at the core of the increases...more about share and dominance and making stockholders happy).
This is in fact another price increase. As the previous posts indicate there are numerous news stories about the price of cotton continuing to rise. As of today it was ranging above $0.90 per pound where the historical average is closer to $0.50 per pound.
The worldwide shortage of cotton and yarn conversion capacity is definitely a contributor. The poor yields in China (world's largest cotton producer) combined with India's trade interuption and now Pakistan's floods are having a major impact of the economics. The pace of growth in demand in China, Brazil, India and even the USA are further influencing prices.
While these increases certainly will have a short term impact on anyone who has already committed to a price on a bid, ultimately higher prices lead to better profitability for all printers. If you were printing 1000 shirts at a sales price of $3.00 and a 20% margin your making $0.60/shirt or $600.00 on the whole job. If prices rise to $3.15 and you maintain your 20% margin those same 1000 shirts will now put in your pocket $0.70 or $700.00. Your overhead and salaries likely cost no more now so you benefit from this increase by $100.00
Sorry to disagree but higher prices do NOT mean higher margins. AND, certainly overhead has gone up for everyone IF you are maintaining a living wage and paying all the liabilities you are required to pay. Heck, unemployment trusts alone have gone up tremendously not to mention your electric and gas. To remain competitive, you cannot raise prices to your customer in the same manner to which they are being shoved on the printer......if you truly think that higher prices from your vendors results in giving you a better profit margin, you must have some tricks up your sleeve in this economy. Please share them.
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