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Capital Business Credit: Expect a Price Boost This Holiday

September 2, 2011

California Apparel News

By Deborah Belgum

Manufacturers and importers are fretting that rising raw-material prices will put a damper on the Holiday season as many expect the average price tag for goods to rise 10 percent to 15 percent over last year.

Capital Business Credit, a New York–based financial-services company that specializes in the retail sector, recently conducted a survey of 80 manufacturers in the apparel, accessories, furniture and housewares sectors that are concerned their gross margins could take a hit as retailers resort to aggressive sales to move merchandise during the Holidays.

“Inflation is coming, and the era when retailers and manufacturers absorb price increases to protect consumers is over. Our manufacturing clients are telling us that prices for clothing, bedding and other soft goods will rise this Holiday season. However, all hope is not lost, as one-third of those surveyed believe that despite current market challenges, retailers will increase inventories this Holiday season,” said Andrew Tananbaum, executive chairman of Capital Business Credit. “Santa may hit a couple of speed bumps, but there will still be a Holiday shopping season.”

Other results of the survey, conducted the week of Aug. 1., found that:

• Nearly 75 percent expect sales this Holiday season to be the same or weaker than last year.
• Some 60 percent believe price increases will be spread among consumers, retailers and importers.
• Half said that rising raw-materials and logistics costs have prompted retailers to ask for longer payment terms during the Holidays.
• Sixty-four percent of manufacturers and importers reported that retail orders for the Holidays are the same or less compared with last year.