05 Nov '11, 6pm

Clothing companies concerned about water risk

Clothing companies concerned about water risk

Picking Cotton via Shutterstock Beverage companies have long been aware of the risks water presents to its business, and now clothing companies, like Gap and Levi Strauss, are realizing how this resource, or lack thereof, can impact their bottom line. Earlier this year cotton prices reached an all time high due to massive output reductions brought on by drought and water shortages in Texas, India, Pakistan, and Brazil. Rising prices prompted Gap to cut its annual profit forecast by 22%, prompting a $4 decline in its stock value. Hovering around $19 per share, the stock has never recovered. Companies raised costs by 10 to 15%, resulting a dip in sales. Clearly, water shortages and crop reductions are a big risk. Levi Strauss, unlike Gap, seemed to grasp this. Levi's performed a water footprint analysis of its products and chose to develop a water risk management strategy ba...

Full article: http://www.earthtimes.org/business/clothing-companies-con...

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