Despite poor business confidence among SMEs, UK fashion manufacturers have shown impressive sales performance in the first quarter.
New data from the latest Manufacturing Health Index, by inventory management software provider Unleashed, reveals that the average small-to medium-sized UK apparel and fashion manufacturer increased sales income by 171 per cent year-over-year and 68 per cent in Q1 2025 compared to Q4 2024.
Based on actual data from more than 600 UK businesses that use Unleashed’s inventory management software, the findings suggest that business community pessimism may not be justified.
According to recent Q1 business confidence polls, tax increases, inflation, slow growth, and growing global uncertainty caused overall confidence to decline for the first time since 2022.
Nonetheless, the fashion industry’s outstanding sales results indicate that global market upheaval has brought a bright spot for UK fashion companies.
According to Joe Llewellyn, general manager of ERP Small Business at The Access Group, the parent company of Unleashed, the nation’s smaller producers have mostly benefited from the atypical business conditions of the first three months of the year as well as declining bank rates.
“Anecdotally, some of our clients are telling us that Q1 gave them welcome windfalls. While some international clients who were impacted by tariffs rushed to place further orders before the tariff pauses ended, others have shifted their business to UK companies. Some businesses have benefited from that, but more significantly, we’re learning that progressively declining bank rates are beginning to boost the economy, which is obviously extremely good news for UK manufacturers who have reported a very successful start to the year,” he said.
Unleashed’s data, however, also revealed a decline in profitability from the previous year. The average apparel manufacturer’s Gross Margin Return on Inventory (GMROI) decreased -36 per cent year over year and -53 per cent vs Q4 to US $ 5.16 for every dollar spent on stock purchases.
Additionally, delivery lead times decreased to an average of 19 days, providing some comfort. Businesses can reorder in lower quantities thanks to faster delivery times, which increases profits and is a more economical approach to create sales.
