Fashion’s role in the 40-year inflation spike – WWD
It’s the war in Ukraine and the prices of petrol and heating oil that are pushing inflation to 40-year highs, but fashion is also playing its part, registering increases that could ultimately shape the relationship between the brand and the consumer.
Clothing and footwear prices for the month rose 6.8% from a year ago, slightly outpacing the 6.5% jump seen in the Labor Department’s reading of ‘core’ inflation or the prices of all goods outside of the volatile food and energy sectors.
Prices for women’s clothing rose 6.5%, while men’s prices jumped 8.8% and footwear posted gains of 6.6%.
The increase reflects the strong consumer rebound since the start of the pandemic, but also COVID-19-fueled supply chain entanglements that are tying up shipments and disrupting factories.
It all seemed like a lot of trouble for the world and the economy, but Russia’s invasion of Ukraine put extreme pressure on an already strained global economic system.
Russia is a key energy producer and the war – and subsequent sanctions by the West – have helped drive prices much higher. Gasoline prices are up 48% from a year ago, while fuel oil is up 70%.
All of this hits fashion in a number of ways. Brands and retailers are paying to bring goods into the country and to consumers, just as shoppers find themselves overwhelmed by rising prices.
As Washington takes steps to fight inflation and the Federal Reserve has begun raising interest rates, Stephen Lamar, president and CEO of the American Apparel & Footwear Association, argued that the President Joseph Biden could do more — and quickly.
Lamar pointed to tariffs on China that were first imposed by President Donald Trump but have persisted and are raising costs and prices for industries, like fashion, that produce goods there.
“The tariff cost is something the president can do very quickly, and he can do it himself,” Lamar said, noting that Biden has said he wants to use every tool at his disposal to bring down the price. inflation. “If they want to use every tool in the toolbox to relieve American consumers, they can remove that tariff burden.”
Through the end of March, additional tariffs on China totaled $132 million, of which more than $55 billion was collected during Biden’s presidency.
While the tariffs were introduced as part of a tough approach to China by Trump, Lamar and the importers argued that the tariffs do not punish other countries, but American companies that import goods from China. ‘foreign.
However, China has not condemned Russia’s invasion of Ukraine, perhaps making it politically difficult for Biden to take steps that, even in the Beltway echo chamber, could be seen as rewarding for China.
But Lamar said dropping the duties would help bring prices down now.
“Removing tariffs is something the president can do before I finish this sentence,” Lamar said. “He doesn’t want to be seen as weak vis-à-vis China, but that’s an argument that was defined by the last president. The last president wasn’t tough on China, he was tough on the American consumer. What they should be doing is putting the American consumer first, not some flawed economic reasoning used by the last administration.
More from WWD:
Discussions with the CEO: James Reinhart of ThredUp
Farfetch and Neiman Marcus team up to tackle American luxury
Wells Fargo takes a more cautious stance on retail