UK’s small and mid-sized fashion firms generated £479,943 (~$643,000) in sales in the second quarter (Q2) of fiscal 2025 (FY25), a 109.28 per cent jump on the same period last year but 18.89 per cent drop on the previous quarter, according to a latest report from inventory management specialist Unleashed.

UK fashion manufacturers are responding to shipping delays and rising demand for goods by tactically building stock levels as they approach the final quarter of the year. At the same time, lead days rose from 19 to 32 days quarter on quarter (q-o-q) and the number of purchase orders (POs) jumped by 37.85 per cent year on year (y-o-y), and increased significantly q-o-q, from 313 to 488.

The report shows that clothing, footwear and accessories manufacturers are now building stock levels in a bid to maintain product availability and service levels in the face of longer lead times – which increased by 13 days from Q1 to Q2. Unleashed is an inventory management software platform popular with small and mid-sized clothing manufacturers. Its quarterly report is based on data from more than 600 UK firms using the software, across manufacturing categories such as food and beverage, clothing and fashion, and construction.

UK small and mid-sized fashion firms saw Q2 sales rise 109.28 per cent y-o-y to £479,943 (~$643,000) but drop 18.89 per cent q-o-q.
To counter longer lead times and shipping delays, manufacturers increased stock levels and purchase orders.
The sector is cautiously buffering ahead of peak season, with improving business confidence and economic conditions.

The surge in purchasing corresponded with an increase in the value of excess stock, which more than tripled q-o-q from £24,920 (~$33K) to £88,371 (~$118K). Profitability – measured as Gross Margin Percentage (excluding wages) – also dropped marginally by 4.37 percentage points q-o-q and 2pp y-o-y.

“The move towards ‘cautious buffering’ should help firms weather any further supply challenges over the coming months. The rise in POs and stock levels marks a tactical pivot for fashion manufacturers, with cautious buffering designed to mitigate the risk of delays and stockouts, particularly ahead of Black Friday and Christmas,” Joe Llewellyn, GM of ERP Small Business at The Access Group, the parent company of Unleashed, said.

“In many cases, this isn’t a knee-jerk reaction to market conditions but a measured response. As manufacturers become more data driven, they’re able to improve their forecasting capabilities and reduce the risks associated with stock purchasing decisions,” explained Llewellyn.

“Looking ahead, there are promising signs that manufacturers will end 2025 in a good position. Sales are healthy, while separate figures show that business confidence has risen steadily every quarter this year. The Bank of England has also cut interest rates from 4.25 per cent to 4 per cent, while inflation is expected to fall below the 2 per cent target. Taken together, this could contribute to margin recovery and selective growth,” concluded Llewellyn.

Fibre2Fashion News Desk (RR)