Many factors are contributing to hard times in the denim industry. These factors may encroach on the entire fashion world.
The Telegraph posted a story about Xingtang, a factory town in China. With 5,000 denim factories in the town, it produces about one-third of the world’s supply of jeans. However, many factors are causing production to slow down or stop completely, leading to speculation that the entire fashion industry may soon follow in denim’s footsteps.
Rising labor costs in China: China’s middle class is growing. Less employees willing to work in the south, the need for more disposable income, and construction jobs that pay more is leading to workers demanding more money.
The workers who were once happy to work for as little as £30 a month now want ten to 15 times that sum…”It is becoming impossible to find people to work,” said Han Zhongliang, a 46-year-old factory boss from Hubei. “I have been here ten years and I used to have 30 to 40 employees. But this year I will be lucky to find 20 who can do the job are willing to work for the wage we offer: 5,000 yuan (£490) a month.
Increasing government restrictions: New labor and anti-pollution laws are making it harder for the factories to be profitable. With pressure from organizations such as Greenpeace, China is working to improve its environmental practices.
“Only the fittest will survive. And they will have to go upmarket and stop making cheap clothes,” said Zhan Xueju, the powerful head of the local Denim Association.
Rising price of cotton: Due to floods in Pakistan and Australia, cotton is now three times more expensive than it was just last summer. This has caused more labels to add polyester to their jeans, giving them more sheen.
“I tried to place an order with a denim mill for one million yards and they told me they could not accept it because the cotton is now worth more than the denim,” said denim expert Richard Atkins.
The article concludes by saying that companies like Zara and H&M, who have earned huge profits from selling clothing that is made to be replace every season, may see trouble ahead.
[image courtesy windkeeper]