Little Falls, NJ - May 22, 2010

Consumers and wholesale resellers of custom t-shirts should prepare for price increases that are less than 45 days out.  These increases will affect every product and style of apparel and accessories in the decorated apparel market place. We have solid information from inside several major custom t-shirt manufacturers that prices will increase between 4% and 15% on July 1st, 2010.  We also believe that inventories will be tightened resulting in less available stock and fewer deals from distributors and mills. There are also rumors that major custom t-shirt distributors will be eliminating free ground freight or at best raising minimum order requirements significantly for freight deals. Increased freight costs of raw material will affect the cost of finished goods.

If our information is accurate, wholesale and retail printed custom t-shirts will rise by approximately 15% - 20% by year’s end for certain products. This scenario could play out sooner pricing some resellers and products out of consumer price points.  While these increases have been anticipated, many industry people have not had their ear to the ground like we have. Any price increases large enough to cause sticker shock could slow the modest recovery we have seen in the wholesale and retail custom t-shirt business.  Wholesale volume is up less than 5% year-to-date industry wide.

Wholesale t-shirt prices have been relatively stable this year but higher manufacturing costs in the screen printing and embroidery industry have driven the cost of finished goods higher. Commodity futures contracts for cotton have risen steadily since 2009. We have been reporting these facts since the beginning of the year. Those with a bona-fide economic interest in the cost of finished goods should take heed and make significant purchases when possible.

 With consumers becoming numb to the general state of the economy, our wholesale and retail sales have been surprisingly strong year-to-date. A general increase was fairly predictable in the sense that consumers always begin purchasing again as the acceptance of recession sets in. Results at big box retail chains validate this theory. Specialty apparel retailer, Aeropostale Inc.'s (ARO) fiscal first-quarter earnings jumped 43% as sales continued to surge and margins continue climbing, We feel this is a clear indication of people’s desire to spend despite grave warnings on debt and deficit nationwide. The decorated apparel market typically lags standard retail indicators. With hope on the horizon, we feel these planned price increases are unwise at this time.

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