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Cutting Costs: Keep An Eye on Textiles

The hospitality industry rents as much as 90 percent of its textiles on long-term contracts with commercial laundries. Many of the commercial-grade fabrics used in uniforms are made with a blend of cotton and polyester.

This year cotton prices were at their highest since the Civil War. After reaching a peak of $2.35 a pound, cotton prices have dropped to about $1.65 a pound, which is still more than double the price 12 months ago. Polyester prices also are rising due to the costs of raw materials like petroleum.

Cotton reserves were depleted in 2010 as manufacturers used up existing stock. About 15 percent more cotton was planted in the primary growing countries in 2011 but weather could still cause shortages. Growing demand in developing markets also is driving up prices.

Textile manufacturers and suppliers are passing at least some of the costs onto the institutions and businesses that buy and rent their linens and uniforms. Soaring cotton prices have left linen-supply services with the classic pricing dilemmas cut margins or raise prices. Price increases will affect contract renewals and the negotiation of new contracts.

Customers should keep an eye on the quality of the textiles they are purchasing and renting. Also, some suppliers are passing on some of the extra costs and are now pursuing a policy of putting in two price rises per year. Additional charges may be imposed if linen in their care is misused or abused.

"Hoteliers, restaurants, hospitals and other sectors dependent on cotton-rich textiles should be ready to work creatively with their crisis-hit suppliers to help ensure their needs are served over the coming months," Murray Simpson, chief executive officer of the Textile Services Association, says on the organization's website .

Deena Kaye is a director in New York, Connecticut and Rhode Island with Expense Reduction Analysts, a worldwide network of consultants specializing in finding extra profits by reducing expenses in non-core categories. She can be reached at 800-656-7270, ext. 136; 203-550-2094 (cell); or DKaye@expensereduction.com .

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