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CCMI in the News
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Cashmere Clothes To Undergo More FTC Monitoring
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The following article appeared in "The Wall Street Journal", May 4, 2001:
Cashmere Clothes To Undergo More FTC Monitoring
By Kathy Chen
Staff Reporter of The Wall Street Journal
WASHINGTON -- Marjorie Cashion's cashmere mock turtleneck didn't pass the itch test.
The
63-year-old retired civil servant had bought the garment because she thought
the usually sumptuous fabric would pamper her sensitive skin. "But it's itchy,"
she grumbles. "I'll bet it's part wool."
She could be right. When the
Asian financial crisis depressed cashmere prices in the late 1990s, Americans
got addicted to the soft, luxury material at bargain prices. But now raw
material costs are rebounding; brown Mongolian cashmere, used in approximately
one-third of such products, cost $99 a kilogram last year -- double the 1999
price. White Chinese cashmere, meanwhile, which makes up about 60% of the
market, got pushed to a low of about $55 per kilogram toward the end of 1998,
half historic levels. But it rose to about $120 in the first three months
of this year.
Now, retailers are scrambling for inexpensive cashmere.
And some Asian and Italian companies are happy to comply -- by diluting the
material with cheaper wool or other impurities. The result: a flood of sweaters,
jackets and coats into U.S. stores that carry last year's price tags only
because misleading labels overstate the percentage of cashmere content.
To
help combat mislabeling, the Federal Trade Commission plans to hold a conference
today to boost industry awareness of the problem and encourage greater self-regulation.
Under the 60-year-old Wool Products Labeling Act, fabrics and garments made
out of wool or other fine animal hairs must be accurately labeled to reflect
their content; manufacturers, distributors and retailers could be held liable
for misrepresentation.
Under the law, the FTC may issue an administrative
order against a company to stop its violating behavior. If the company is
caught mislabeling again, the agency can go to federal court to seek penalties
of as much as $11,000 for each violation. In the last 10 years, it has pursued
some 30 cases, mostly dealing with country of origin and a few dealing with
fiber content -- but never cashmere.
Lands' End Inc., the Dodgeville,
Wis., mail-order house, advertised $129 blazers in its Christmas catalog
last year that it described as "Wool/cashmere. Eexquisite Italian fabric
and finishing," with 80% wool and 20% cashmere. After complaints from the
Boston-based Cashmere and Camel Hair Manufacturers Institute, a trade association
set up to protect the two fibers' reputation, Lands' End tested the garments
and found they were only 6% to 18% cashmere. The company sent apologies and
gift certificates to the 15,000 customers who had bought the blazers, and
cut the price to $99. Spokeswoman Beverly Holmes attributes the mixup to
the "inexact science" of producing blends and says the company is working
with its Italian supplier to improve the process. Lands' End subsequently
sold 30,000 additional blazers, alerting those who ordered them of the discrepancy.
To be safe, its new catalog will describe the blazers as 3% cashmere.
Still,
the cashmere crowd isn't happy. Everyone in the business knows when "they're
buying adulterated goods," says Jim Coleman, president of Forte Cashmere
Co. of Woonsocket, R.I. "When you calculate out the price of real cashmere
and [the cheap] stuff offered on the market -- it can't be 100% or it doesn't
contain the amount it says it contains."
It's not just the competition
that infuriates purveyors of the posh stuff; it's the damage to the cachet
of their wares. "When wholesale clubs get into the business ... it's bad
for cashmere's image," sniffs Dick Forte, president of Dawson-Forte Cashmere
Co. of South Natick, Mass., which produces cashmere garments for its own
and private labels.
Tough, say discount retailers. "We sold over one
million cashmere sweaters last year," says Richard Galanti, a spokesman for
Costco Wholesale Corp., which displayed its Kirkland Signature collection
of 100%-labeled cashmere sweaters on pallets in its warehouse stores. "There's
a reason our members buy them: Do you want to spend $49.99 for a cashmere
sweater from Costco or $249 for a sweater from a department store?" He says,
however, that Costco sent the sweaters for tests, which generated "inconclusive"
results about whether some of the garments were pure cashmere.
Adulterated
cashmere has been an issue for years. Spun from down shed each spring by
goats living high in the China and Mongolian plateaus, cashmere draped Chinese
emperors and Middle East sultans for centuries. It became available to wealthy
Europeans in the mid-1800s, and to the upper crust of U.S. society in the
early 19th century. To meet demand, some textile mills in Prato, Italy, have
for decades recycled worn cashmere clothing and rags into woven cashmere
for use in coats and jackets, and passed it off as "virgin" cashmere, say
industry experts.
China's entry into the cashmere knitwear business exacerbated
the situation. Home to two-thirds of the world's cashmere goats, the country
has traditionally been the largest supplier of the raw material. When China
began to export sweaters and other garments, some manufacturers exaggerated
the cashmere ratio.
The problem has become much more widespread over
the last year, as the U.S. appetite for cheap cashmere has grown. Today,
three-quarters of all cashmere knitwear and other finished products are sold
in the U.S., up from one-quarter since the mid-1990s. At the same time, cashmere
counterfeiters have become more sophisticated. Even seasoned buyers find
fakes harder to detect. Enzyme baths strip sheep's wool of its thicker, spikier
scales to make it look and feel more like cashmere. Some sheep breeders are
producing animals with finer, longer strands of wool that resemble the down
of cashmere goats.
Karl Spilhaus, president of the Cashmere and Camel
Hair Manufacturers Institute estimates that the mislabeling rate for lower-end
sweaters is now about 15%, up from virtually no cases five years ago.
Some
big-name department stores that traditionally peddle fine cashmeres are culprits,
says Mr. Spilhaus, because they don't monitor their suppliers closely enough.
His institute is in negotiations with Lord & Taylor, a unit of May Department
Stores Co., over what he describes as repeated infractions. "May cooperates
fully with the Cashmere Institute and our goals are the same," says company
spokeswoman Sharon Bateman.
Copyright © 2001 Dow Jones & Company, Inc. All Rights Reserved.
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