Familiar with the world of fashion and the factors that affect the marketing and branding of luxury goods, Patrick Guadagno recently completed a term with Versace USA, where he led the organization as President and Chief Operating Officer. Throughout his 25-year career, Mr. Guadagno has paid special attention to the cost of source materials in the fashion industry, including cotton.
Cotton futures recently fell to their lowest level in nearly three years, with July futures at 66.10 cents per pound, according to the Financial Times. A year earlier, the commodity had reached a high of $2.27 per pound. Experts attribute the decline to India and China’s slowing economies, as well as rain in Texas, which produces extensive amounts of cotton. In addition, the Ivory Coast, a major cotton producer, expects to export 31 percent more cotton this year as it begins to recover from a 10-year political crisis.
With price declines, some experts fear contracts may not hold. Last year, buyers who promised to purchase cotton at record highs balked at delivery times because the prices had declined so greatly in the meantime. Between March and November, the fiber’s per-pound cost fell by 60 percent.
Industry analysts expect that retailers will soon start to see higher profits on cotton goods. Low prices may eventually be passed on to the consumer for mass-market brands.