Strong US dollar vs the textile business is not hitting the industry, but a decline is in the bag
The Mexican textile market is not yet affected by the US dollar exchange rate to Mexican peso, since the industry is working to increase the sales, by coordinating a plan to avoid increasing the prices, that could affect the final consumers; however, a clothing sales decrease has been anticipated for the 1st quarter of the year.
As of today, no price increase for clothes has been announced but experts said it will be known shortly. The price adjustment will depend on the manufacturing areas or different type of garments, as some of the textile vendors may have fabric and raw materials that could help to absorb the impact.
On 2015, consumers saw a good economy based on the sales reported by the department stores, where clothing and shoes were on the 2nd place. At that time, the forecast was to have a strong economy for 2016, but now there might be a financial pushback for the year.
For Salomón Juan Marcos Villarreal, president of the apparel company named Grupo Denim, the strong dollar effects on the local business might be a challenge and if the right steps are not followed, the business could face financial risks and a drag on revenues.
“It is important to prevent and avoid negative effects with the rise of the US dollar; for us, one of the solutions is to make payments in Mexican pesos, we also have vendors overseas that keep a buffer in case of any currency fluctuations; nevertheless, the most important is to have in mind that our success is based on the products and services we offer to our clients and not on the prediction of the exchange rate of the US dollar”, said Salomón Juan Marcos Villarreal.