Branded garments to cost more from April

CHENNAI/COIMBATORE: Hit your neighbourhood mall and shop at your favourite brands soon as price tags are likely to get bigger this summer.
In the recently announced Union Budget, the finance minister levied a 10% duty on branded garments. This, coupled with high cotton prices (that have more than doubled since January 2010) are the key reasons for this price mark up.The price of Shankar-6, the most widely used cotton variety, has increased by about 40% since the beginning of the year and is now hovering close to Rs 60,000 per candy (1 candy = 356 kg).
"This leaves us with no choice but to pass on the burden to the customers. By June-July, we will increase prices by 10% across all our brands," says Suresh J, CEO (brands and retail), Arvind Brands, that owns Arrow, Izod, Excalibur, Flying Machine and NewPort University, among other brands.
In January, brands from Aditya Birla-owned Madura - like Louis Philippe, Van Heusen, Allen Solly, Peter England and People - saw a 10-15% increase in their price tags due to the high cotton prices. "We will have to do another round of price hikes by 8-10% may be in April-May. We will look at doing a flat increase across all our brands," says Ashish Dixit, president, Madura (fashion and lifestyle).
Smaller brands are feeling the heat too. "The jump in raw material prices and the 10% duty would increase the cost of garment by as much as 25%," says P Sundar Rajan, MD of SP Apparels that markets Crocodile. He will, however, increase prices only by 15% as passing on the entire burden to customers will affect sales.
T R Sivaram, executive director of Royal Classic Mills, which owns the Classic Polo brand will also increase prices in April by 10%. "With cotton prices hitting new highs, we had increased prices by up to 20% in the past three months. But we have to hike prices again," he says.
"There will definitely be a dip in sales, at least till the festive season. The net impact of the duty will be around 4% to 5% and had the cotton and fuel prices not shot up so sharply, brands would've probably absorbed it. But now, this is a double whammy for them," says Arvind K Singhal, chairman of Technopak, a consultancy. "Consequently, value retail formats that sell clothes at discounted prices will become more popular with the middle class customer."