Closets overflow with cheap clothes
Knight Ridder News
PHILADELPHIA - Although Jill Karol, 48, is a single mother who watches every dollar, she recently set out to buy herself two new winter coats.
Without an ounce of guilt.
At a Target store, Karol was happy to find a leather jacket priced at $99, and then thrilled when it was discounted to $59 at the register.
At the same time, she picked up a down jacket for a mere $29.
To the unending surprise of shoppers, and the deep concern of retailers and U.S. clothing manufacturers, clothing prices have been plummeting, and not just at Christmas.
For about a decade, almost without realizing it, Americans have benefited from falling prices for coats, dresses, men's slacks, women's skirts and blouses, toddlers' outfits, and other apparel as global quotas on clothing manufacturing have been systematically dismantled, boosting low-cost imports.
Also keeping prices down is fierce competition among retailers who have to sell more to maintain profits. So fashions change in the blink of an eye, with as many as 13 seasons in the new clothing world.
And if, in some cases, quality isn't what it used to be, few seem to care. At such prices, consumers often may want to wear an item just a few times before donating it to Goodwill.
From 1993 through 2003, the large basket of goods that makes up the government's Consumer Price Index climbed 27 percent. But clothing fell 10 percent during the same period.
For American consumers, the decline in clothing prices is one upside of the trend toward globalization - the effort to expand free trade to all parts of the world.
Public debate over globalization has underscored its negatives: the loss of 2.5 million U.S. manufacturing jobs since the early 1990s to low-wage countries that can produce goods more cheaply. A major victim was the U.S. apparel industry, which lost 630,000 jobs - two-thirds of its workforce.
Some, such as W. Michael Cox, chief economist of the Federal Reserve Bank of Dallas, see low prices for such things as clothing, electronics, toys and sporting goods as a boon, raising many people's standard of living.
The surge of low-cost imports has made waves, here and abroad, both personal and economic.
Shoppers are indulging in clothes as never before, buying staggering amounts at bargain-basement prices, with the help of a year-round markdown culture of newspaper coupons, discount clearance racks, and frequent-shopper gimmicks.
"If the price goes down on anything, people buy more of it," said William Stull, chairman of economics at Temple University. "That doesn't necessarily mean they need it."
Another result of inexpensive clothes is a burgeoning used-clothes economy that is filling the racks of local thrift shops, creating jobs, and producing a windfall for some nonprofit groups.
What can't be sold in thrift shops is flooding the world market. New industries have emerged in Canada, South America and Africa devoted simply to sorting, grading and repackaging hundreds of millions of used U.S. garments for resale in merchant stalls.
The amount is so enormous that Mexico, Paraguay, Venezuela, Nigeria, Sudan and Zimbabwe, among others, have banned imports of U.S. used clothing or imposed tariffs to protect their textile-manufacturing industries, according to a trade group.
Last year, 97 percent of the clothes sold in U.S. stores were made abroad, up from about 50 percent in 1991. A fourth came from China and Mexico.
And more is to come. The last of the global apparel quotas are slated to disappear next month.
"When the prices are lower, you have to run that much faster to keep up with the same volume of dollar sales," said Rosalind Wells, chief economist with the National Retail Federation. "If one store moves goods by marking down, you know everybody else will do it."
Even high-fashion brands have not been immune. Ten years ago, a jacket from Jones of New York was priced at retail for $180 to $200, said Jones spokeswoman Anita Britt. It still sells for that amount, she said. "Have we taken prices up? No, not even to match inflation."
Most consumer items in a capitalist economy rise in price.
Health-care costs jumped nearly 48 percent from 1993 to 2003, according to the U.S. Labor Department. Private elementary school tuition soared 86 percent. College textbooks are up 70 percent. And the cost of fresh vegetables climbed 49 percent, much faster than food prices overall.
In sharp contrast have been clothing prices, which fell broadly. The only other time that clothing fell this dramatically was during the Great Depression, when the price of everything fell because of high unemployment.
Boston College sociology professor Juliet B. Schor, who wrote the recent book "Born to Buy, estimates that women bought 32 garment items a year in 1991. By 2002, according to her analysis of census data, they were buying about 50 percent more: 50 pieces. The gain was nearly as high for men.
As a whole, the nation in 2002 bought 14.8 billion pieces of clothing, up from 8.5 billion in 1991, her data show.
"It's so cheap, people respond," said Schor. Some people "have never been able to have these things."
Barry Schwartz, professor of social theory and social action at Swarthmore College, said that so much merchandise is creating problems for consumers. "Buyers' remorse," he calls it.
With so many options, people believe they must find the perfect product - for example, a pair of jeans. When they do make a purchase, he said, they regret it, believing they could have gotten a better fit at a lower price.
Until recently, "it never crossed anybody's mind that there could be too much choice," Schwartz said.
The $166 billion retail clothing industry goes to great lengths to keep sales volume up as prices fall and profit margins shrink.
Banana Republic, Ann Taylor, Gap, and other specialty chains present a "new look" every five to six weeks - all to draw people back to see the new colors, the new styles, the new fabrics.
"The only way I can keep you coming into my store is to increase the pace of fashion," said Scott Friend, president of Profit Logic Inc., a Cambridge, Mass., company that develops software to manage the complex markdown process for large retail chains.
Coupons, one-day sales, discounts pegged to dollar purchases, and a barrage of other markdowns are also aimed at getting people to shop.
Monroe Millstein, founder of the off-price clothing giant Burlington Coat Factory in Burlington, has been a pioneering force in the nation's markdown culture.
Still, he was surprised last year when his chain sold 10 percent more coats but generated about 5 percent less revenue than the previous winter.
When he asked his executives to find out why, they learned that people weren't buying at the typical $79.99-to-$89.99 price points. Instead, they were scooping up coats priced at $59.99.
Millstein says it's the first time he saw such a dramatic move toward lower-priced coats within a season. The reason, he believes, was that the less expensive coats were nice enough to entice buyers.
Clothing manufacturers and retailers, including apparel giants Liz Claiborne and Charming Shoppes - which operates Lane Bryant and Fashion Bug stores - have warned investors that clothing prices are likely to weaken further when worldwide apparel-manufacturing quotas are dismantled next month.
Until now, a World Trade Organization quota system has limited how much apparel each country could produce. The rule changes will allow apparel manufacturers to make as much clothing as they want in any country.
Frank Badillo, a senior economist with Retail Forward in Columbus, Ohio, said companies are likely to cluster clothing factories in China and India.
Clothing prices, he said, could decline "twice as fast" in the next five years as they have in the last five.
To ease worldwide concerns that it will dominate the apparel business when quotas disappear, China said recently that it would voluntarily impose export tariffs on its clothing.
"I don't know where the bottom is with this," said Nate Herman, international trade adviser with the American Apparel and Footwear Association in Washington, a trade group with about 700 U.S. members.
"There's a lot of concern," he said. "I've looked back to see if there was a cyclical downturn like this before, and I haven't found one."
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