Macy’s and Forever 21 Will Cost More Next Year, but H&M Won’t: Here’s Why

The sourcing cost of clothing production is rising in China, where many retailers employ factories to create fast fashion for their stores. For smaller brands, the solution has been to move production to domestic hubs like Los Angeles, but larger retailers like Forever 21 and Macy’s, who need merchandise in big quantities that only China can offer, say they will be forced to pass the climbing costs on to consumers. {New York Post}

Can you guess which one of these items will set you back $4.95?

This may prove to be a difficult move for such retailers to make, as the sour economy has already left them struggling with inconsistent sales trends in addition to high unemployment and financial insecurity among consumers.

“Apparel prices are going to go up. It’s as simple as that,” Perry Ellis Chief Executive George Feldenkreis told the Post. “The American consumer will have to accept it.”

Actually, it turns out American consumers can just turn elsewhere for their fast fashion fix. The Cut reports that while prices at many large retail chains are going up, H&M’s prices are going down. In fact, a black and white striped dress with a mesh top and sweetheart neckline from H&M is now retailing for $4.95 – an amount Vogue points out is less than the cost of a Starbucks frappuccino, a McDonald’s McNuggets Value Meal or CoverGirl face powder at Duane Reade.

Big retailers who are struggling with rising production costs should listen up because H&M PR Director Jennifer Uglialoro explained how they are managing to maintain such low price tags.

“We have over 2,000 stores in 37 countries,” she said. “This provides high volume and there is no middleman. We have our own team of over 100 in-house designers and we do all our own production.” She also said H&M is focused now more than ever on reigning in costs due to the struggling economy. {Vogue}

According to H&M’s code of conduct, the retailer does use vendors, but their suppliers own the factories where H&M clothing is produced.

H&M is to be applauded not only for their ability to keep prices down, but a video on their Web site under “Corporate Responsibility” provides supply chain transparency, so consumers won’t be left wondering how ethical the creation of that $4.95 dress was. That’s something worth applauding in a time when news of poor factory working conditions abounds.

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