Blog: "Negative headwinds" getting stronger

Joe Ayling | 11 October 2010

Last week Marks and Spencer (M&S) became the latest UK retailer to issue caution about the wider sales environment, in spite of buoyant second quarter results. The company reported a 6.5% sales rise for the quarter, with clothing revenues climbing 7.8%.

Analysts suggested that shoppers in the UK are turning their focus to quality, bolstering M&S' top line in the process. However, the overall outlook for UK retailers is being tarnished by the prospect of rises in VAT and public spending cuts. Neil Saunders, consulting director of Verdict, said: "With the negative headwinds of government cuts on the horizon, the consumer environment is likely to become much tougher."

Also last week, industry leaders were welcomed to the IAF World Apparel Convention in Hong Kong. Sourcing costs - a growing concern for retailers like M&S - were high on the agenda. John Cheh, vice chairman and CEO of Esquel Group, told delegates: "Material supply and surging costs will still prevail in the coming year."

Labour costs, currency effects and rising cotton prices are eating away at the margins of Chinese suppliers in particular. Should these costs filter through to the high street, selling cheap garments will become a far less profitable and sustainable strategy than in years gone by.


BLOG

Apparel supply concerns hit as coronavirus impact builds

Novel coronavirus (now officially named 2019-nCo) is continuing to shake up China’s supply chain. According to the World Health Organization (WHO), as of 17 February 2020 there have been 71,329 confir...

BLOG

China coronavirus impact continues to evolve

Top stories on just-style last week were again dominated by the novel coronavirus outbreak in China, with a look at what it means for US apparel and retail, how it could impact China's polyester produ...

BLOG

Coronavirus and its impact on fashion supply chains

The world economy in general, and the apparel industry in particular, depend on hugely complex, globalised, supply chains. So what are the consequences of the new 'Wuhan novel coronavirus'? And what i...

BLOG

US-China trade deal brings limited benefits for apparel firms

The 'Phase One' trade agreement signed between the US and China is a step in the right direction, but offers little relief to apparel firms in the ongoing trade conflict....

just-style homepage



Forgot your password?