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

Levi Strauss leads on green supply chain in China

Sustainability remains top of mind for the industry with Levi Strauss, Adidas and C&A ranked amongst the leading brands to have made progress in environmental supply chain management in China over the...

BLOG

UK clothing exports to US to be hit by further 25% duties

Cashmere jumpers, anoraks and swimwear made in the UK and exported to the US are among products being hit by an extra 25% tariff as part of the ongoing dispute between the US and the EU over aircraft ...

BLOG

New US trade trends taking shape?

In a reversal of trends seen in July, the three Central American countries that are the largest suppliers of clothing to the US – Mexico, El Salvador and Honduras – saw a dramatic fall in shipments in...

BLOG

Weaving a new vision for US denim

The closure of the last US selvedge denim mill two years ago might have marked the end of an era. But thanks to the vision of Daniel Feibus and his team, the original looms have found a new home at Vi...

just-style homepage



Forgot your password?