Rising Cotton Prices Hit H&M Hard

31 Mar
natalie portman 

Photo: Getty Images
Natalie Portman in a dress from H&M’s Conscious Collection. 

Cotton prices are continuing to rise—and H&M is feeling the burden.

The massive Swedish retailer posted a 30 percent drop in first-quarter profits after it absorbed rising cotton costs, which are at their highest in over 15 years,according to the Dow Jones Newswire.

“Instead of passing on these cost increases to customers, we chose to strengthen our price position in order to build further on our strong market position for the long term,” Karl-Johan Persson, chief executive officer of H&M, told WWD.

The good news for H&M shoppers? The retailer’s prices will stay steady—for now. H&M is even continuing to grow, with 250 projected store openings this year, mainly in China, the U.K., and the U.S. And on April 14, H&M will début its latest eco-friendly Conscious Collection, which is comprised of organic cotton and linen, Tencel, and recycled polyester garments. (The collection has already garnered at least one high-profile fan: Natalie Portman, who wore one of the line’s dresses to a pre-Oscars bash.)

“We expect the cost inflation to become more stable in the second quarter but to remain tough,” the company’s CFO, Nils Vinge, told Dow Jones.

Meanwhile, see how luxury fashion companies are dealing with rising leather prices.

ARTICLE VIA FASHIONETC

By Emily Gyben 03/31/11 at 02:10 PM

 

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One Response to “Rising Cotton Prices Hit H&M Hard”

  1. scialle April 4, 2011 at 10:37 am #

    Very interesting article. In the shawl biz, cotton prices are rising too and it is becoming more cost effective to use micromodal, which is a very fine rayon. The Italian are, so far, the experts at this type of finishing. Scialle’s Italian prints are made on a base of 90% micromodal and 10 % cashmere. For next spring we will be looking to utilize prints on 100% micromodal.

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