It was a pleasure to attend the ASCBI conference last Tuesday on the topic of “The reality of UK manufacturing: is it a sustainable option?”
With a variety of speakers covering different aspects of the industry (many of whom offered a very personal and fascinating perspective), the consensus was one where businesses were once again beginning to thrive with a positive view emerging of the future for fashion and textiles manufacturing in the UK. Consumer demand, supply-chain flexibility along with a number of other factors were all identified as driving this change and impacting companies across the supply-chain within different market segments.
Nothing exemplified this more than English Fine Cottons presentation by Tracey Hawkins who informed the audience that for the first time in 30 years, raw cotton was once more been shipped into Liverpool to be spun by the company in its refurbished mill in Dukinfield.
The conference did present a number of issues for the industry that need to be addressed such as recruitment and skills (which is becoming ever acute with an increasingly ageing workforce coupled with a diminishing skilled labour pool), as well as how retailers and manufacturers can ensure they are in dialogue on each other’s needs and requirements; to name but two of the major themes to emerge.
The tremendous number of speakers meant a lot of ground was covered and over the coming week, I will look to summarise what was discussed. Today I will start with the scene setting talk with Nivindya Sharma of Verdict.
Verdict – UK consumers fashion retail spend set to continue its rise
The ASBCI conference was kicked off by Navindya Sharma of Verdict whose presentation focussed on how whilst UK consumer spending on clothing was continuing to rise, a number of pressures on margins and costs were leading to changing business models which had many implications for UK manufacturing.
Verdict’s figures showed UK consumer spending on clothing had grown markedly in the past five years and was forecast to grow substantially again between 2016 and 2021 by 26.5%, a growth rate higher than any other sector.
A number of factors such as higher UK employment, real wage growth and increased spending in the menswear market were attributed for this pattern, which was encouraging many players in the fashion market to make a design investment to move up market. Despite this, inhibitors such as the volatile weather, slowdown in major overseas markets and the continuing uncertainty surrounding Brexit were seen as threats to this growth.
The research also presented a number of pressures UK retailers are experiencing on their margins. This covered factors such as the rise of the online consumer, increased competition and continued market fragmentation from a price perspective; to rising overseas manufacturing costs, the implications of ensuring swift order fulfilment across multi-channel purchasing and rising wages with the introduction of the living wage from a cost perspective.
Consumers were shown to now be now purchasing based on perceived value for money rather than purely a cost basis, whilst UK consumers had a positive perception of Made in Britain, although at this time many are unprepared to pay the premium associated with UK manufacture. A particular issue identified was how the higher spending younger age-bands whose attitudes to Made in Britain are not yet as positive as the older generations can be transformed.
Factors promoting UK manufacture presented included the quality of production, volatile weather patterns, increased requirements for retailers to demonstrate transparency within their supply-chains, the sustainability agenda and changing consumer requirements, particularly within the luxury sector driven by the need for faster fulfilment times as “seen now, buy now” increasingly drives retail sales.