Price hikes spread from grocery aisles to closets as fashion brands raise prices

The ripple effects of a high exchange rate and elevated oil prices have moved beyond food prices and into consumers' wardrobes, as major fashion brands known for their value-for-money positioning announce price increases. Rising raw material costs — particularly synthetic fibers — driven by the Middle East war that broke out earlier this year are being cited as the key factor.

According to industry sources Thursday, New Balance — whose domestic operations are run by Eland World — raised consumer prices on select footwear models received or newly launched since July 23. The affected models are the 993, 990v4, Allrounder, Ellipse and Rebel v5. The 993, a perennial bestseller priced at $199.9 in the United States, will increase from 279,000 won ($192) to 289,000 won in Korea. Eland World said the increases are "limited to select restocked and newly launched products and differ in nature from an across-the-board price hike for the brand."

Musinsa Standard, the in-house SPA line of Musinsa, also decided to raise prices on select products starting Tuesday. A total of 220 items — representing 5.8 percent of its full product lineup — are affected. The tapered hidden-banding crop slacks will go from 39,900 won to 49,900 won, and the basic blazer from 89,900 won to 99,900 won.

Both brands built their popularity on competitive pricing relative to quality, but rising production costs since the outbreak of the Middle East war this year pushed them to act. Eland World said that "when comprehensively considering recent exchange rate movements, rising raw material costs and global pricing trends, there were some products for which maintaining existing prices was no longer feasible." Musinsa Standard announced that "prolonged volatility in global raw material prices and international oil prices has made adjustments to the manufacturing cost structure unavoidable."

A key driver has been the rising price of naphtha, which is used in synthetic fibers and garment packaging. According to government statistics, naphtha prices climbed 21.3 percent from $745.35 per ton in the first quarter of this year to $904.40 per ton in the second quarter — a 56.2 percent increase compared with $579.13 per ton in the second quarter of last year.

Industry insiders expect sequential price increases across brands to continue through the first half of next year, as higher input costs feed through with a lag and synthetic fibers are heavily used in functional garments such as thermal wear. The increases are expected to feel more pronounced to consumers as they coincide with the fall-winter season, when product prices are generally higher.

According to Reuters and other foreign media, Japan's Fast Retailing, which operates Uniqlo, has left open the possibility of raising prices on some fall-winter products in Japan by around 4 percent. In South Korea, however, the company said it has no plans for sweeping price increases. FRL Korea, the local subsidiary, said "pricing policy is managed on a country-by-country basis" and that it "regularly reviews prices on a small number of products each season." Eland World's SPA brands Spao and Mixxo are understood to have no plans to raise prices.

Lee Eun-hee, a professor of consumer studies at Inha University, said "people are feeling the pinch of higher prices across food, clothing and housing." She called for government-level price management measures, "including support such as tax rate reductions or the application of quota tariffs." She added that "with liquidity already expanded through the livelihood recovery support payments and the supplementary budget, cost pressures from the war and remaining upward pressure on labor costs are still in play," saying "it is time for the government to demonstrate its commitment to price stability once again."