The rising price of cotton has been just one of the ingredients contributing to a cocktail of despair for retailers over the last 12 months, impacting on many fashion companies’ margins or resulting in higher prices for already-stretched consumers.
Value fashion retailer Primark and global high street clothing specialist H&M are among the businesses to have cited the significant hike in cotton costs as a reason for the slower sales growth detailed in recent trading announcements.
Trading has continued to flourish at Marks & Spencer (M&S) though under new CEO Marc Bolland, who said earlier this year that escalating raw material costs have had less of an impact on his business than they have on its market competitors which sell cheaper goods.
M&S is also committed to sourcing sustainable raw materials and yesterday announced that it has extended its ‘Better Cotton’ project in India, which aims to improve the cotton it uses when making its clothing products as well as enhance the lives of farmers working in Warangal, in the Andhra Pradesh of the country.
Having launched phase one of the initiative two years ago, M&S will now continue its work in India until 2015.
Raw materials expert at M&S Mark Sumner, who has been working on the project, told Retail Gazette: “Locally, we are trying to understand the complexity of the cotton industry and cotton agriculture.
“We want to see how we can work with the farmers to deliver a sustainable business model for them and a business model that works for us as well.
“Other retailers and those involved in sourcing cotton have a feel for what it is but until you actually meet the farmers and work with their co-operatives it is really difficult to understand what is going on.”
Cotton sourced from the Warangal project will be used in a wide range of M&S products available later this year across its menswear, ladieswear, childrenswear and homewear ranges, helping the retailer continue to grow its share of the competitive clothing market.
It comes after phase one of the initiative - a joint project with environmental group WWF - focused on decreasing the water and pesticide used in growing cotton, as well as helping 6,000 Indian farmers make more of a profit from their businesses.
Results from the initial two years of the Better Cotton scheme include significant reductions in the use of water, pesticide and synthetic fertiliser in the production of the material, and following this success M&S wants to extend the project to 20,000 farmers in the coming years.
“We have been able to work with the farmers and find a way that allows them to be more effective and efficient in what they are doing and help manage their yield using fewer resources,” Sumner explained.
“It is a really good example of how our eco and ethical improvement campaign Plan A is delivering sustainability but doing so from a business point of view.”
M&S’s actions in India and the Plan A initiative are part of its goal of become the world’s most sustainable retailer by 2015, and its green focus is expected to bring a raft of benefits to the company in the long term.
British Retail Consortium spokesperson Richard Dodd told Retail Gazette last week that retailers have no alternative but to go green, suggesting that reducing carbon emissions is a core business continuity matter, and Sumner is of the same opinion.
“There are local and strategic benefits to what we are doing in India,” he commented.
“We are getting benefit both in terms of managing our impact on the environment and on society, but also doing it in a way that is good for our bottom line, our suppliers and the farmers at the end of it.
“Plan A is not a fad or one of those marketing stories you see floating around – it is integral to what we are doing at the business – Plan A is a strategy for future-proofing the company and making sure it is strong and stable against all of those pressures coming down the chain.”
Cotton may have been a hot topic for retailers across the UK over the last 12 months, but M&S’s work in India highlights the many levels that must be considered when sourcing the material; it is clearly not just about price.