People participate in the Texworld USA 2022 trading fair in New York City, the United States, July 19, 2022. Persistent high inflation pressures are going to bite the U.S. apparel industry as consumers tend to cut back discretionary spending in the first place. The semiannual trading fair Texworld USA comes back in person on Tuesday for the first time since July 2019. However, the floor space of the exhibition shrinks sharply in comparison with that before the pandemic, a reflection of challenges facing the industry. (Xinhua/Liu Yanan)
NEW YORK, July 20 (Xinhua) -- Persistent high inflation pressures are going to bite the U.S. apparel industry as consumers tend to cut back discretionary spending in the first place.
Consumer spending is remarkably resilient at the moment, but it's going to start to abate, because inflationary prices are impossible to ignore, said Marc Cohen, director of retail studies and adjunct professor at Columbia Business School on Tuesday.
"There's no question that things are going to slow down ... you can't take current consumption and presume that it will continue," said Cohen on the sidelines of a panel discussion at the ongoing exhibition and sourcing event Texworld USA 2022.
If Americans are living paycheck to paycheck, they just don't have as much available income as they had a year ago, said Cohen.
The textile industry is going to be facing a challenge because discretionary sectors will be the most vulnerable to high inflation, according to Cohen.
Cohen added the home furnishing sector is already seeing a decline as many people have outfitted their home and they're not going to continue to spend the way they were a year ago.
A recent survey by U.S. consultancy firm First Insight, Inc. on 1,000 U.S. adults showed that 28 percent of them were cutting out spending on fast fashion.
Meanwhile, jewelry, dress shoes, casual wear, season-specific apparel and handbags were highlighted as consumers' choices of cutting back on.
"Even if spending might be holding somewhat steady right now, I think the signs are not great for the future," said Gretchen Jezerc, senior vice president of marketing with First Insight on the sidelines of the panel discussion.
"People bought so much of it during the pandemic. Now that they have to actually go back into the office and they don't need any more sweat pants," said Jezerc.
The semiannual trading fair Texworld USA comes back in person on Tuesday for the first time since July 2019.
However, the floor space of the exhibition shrinks sharply in comparison with that before the pandemic, a reflection of challenges facing the industry.
Jezerc said, "It takes a while to bounce back after what we've been through. There are still people who are either not able to travel or not comfortable traveling."
Inflationary pressures and the COVID-19 pandemic brought difficulties to operations and downside risk of U.S. economy is another headwind for sure, said Shirley Yang, general manager with HITEX USA LLC, which deals with designing, manufacturing and trading of children's apparel.
The intermediaries actually absorbed the increase of input costs while sales price and volume didn't see obvious change, said Yang.
However, a number of participants of the exhibition remain optimistic about business outlook despite the inflation.
A lot of designers and customers aren't really affected necessarily by inflation as most products have high retail prices and a lot of garments sell in boutiques, said Megan Prange, founder and owner of Prange Apparel from Nashville, Tennessee.
Prange said local manufacturing has the advantage of very short turnaround times for the designers and no shipping costs and tariffs.
The retail sales of clothing and clothing accessories in the United States totaled 25.76 billion U.S. dollars in June this year, slightly lower than that in May and April, according to the U.S. Census Bureau. ■
Participants have a business talk at the Texworld USA 2022 trading fair in New York City, the United States, July 19, 2022. Persistent high inflation pressures are going to bite the U.S. apparel industry as consumers tend to cut back discretionary spending in the first place.The semiannual trading fair Texworld USA comes back in person on Tuesday for the first time since July 2019. However, the floor space of the exhibition shrinks sharply in comparison with that before the pandemic, a reflection of challenges facing the industry.(Xinhua/Liu Yanan)
