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KN18040 KEY NOTE CLOTHING MANUFACTURING MAY 2000

ISBN 1-84168-067-2

This report covers:

Companies covered include:

Executive Summary
Table of Contents
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EXECUTIVE SUMMARY

Key Note estimates that sales of clothing in the UK reached £27.95bn in 1999, an increase of 23.7 percent by value over 1994. UK manufacturers’ sales decreased by 16.6 percent between 1995 and 1998 to £6.43bn. 73.6 percent of domestic demand was met by imports, as the negative balance of trade has more than doubled since 1994, to reach £4.97bn in 1999, due to the strengthening of the pound and the increasingly uncompetitive financial structure of the UK industry.

The largest single clothing retailer in the UK, Marks and Spencer, caused shockwaves through the industry in September 1999 when it announced that it would no longer seek to source the majority of its clothing from the UK, and terminated agreements with several of its largest suppliers without notice. By the beginning of 2000, this had already resulted in the closure of several major factories in the UK and the loss of several thousand jobs.

Weakness in the UK industry can also be seen in the agreed bid for Courtaulds by Sara Lee Europe, which took the company over in March 2000 after several years of declining sales and profitability. Several clothing retail companies have suspended their UK manufacturing activities, notably Alexandra and Berghaus, while Dawson International, once the major supplier of added-value woollen knitwear, has now downsized to cashmere only.

The future for the UK industry is probably the bleakest it has ever been. The low-skill, low added-value nature of much clothing manufacture means that labour costs are a high proportion of the business, making it very difficult for the UK to compete with lower labour cost countries in Eastern Europe, North Africa and Asia. A downturn in fashion sales in 1998 and 1999 hit UK retailers hard, in turn increasing their cost pressures and leading more to source from outside the UK.

Total retail sales are expected to reach £30.36bn by 2004. UK manufacturers’ sales are anticipated to fall by 28.5 percent over the same period to £4.16bn, leaving a residual industry which has particular skills, or is linked to particular retailers or fashion sectors. The future prospects for bulk manufacture, however, are very poor.

TABLE OF CONTENTS

Executive Summary

1. Market Definition

MARKET SECTORS

Natural Fibres

Cotton

Linen

Wool

Cashmere

Silk

Man-Made Fibres

Viscose

Acrylic

Polyester

Polypropylene

MARKET POSITION

Table 1: The UK Clothing Market by Retail

Sales Volume at Constant 1995 Prices

(index 1994=100), 1994-1999

MARKET TRENDS

Table 2: UK All Items and Clothing Retail Price Indices (index 1987=100), 1994-1999

2. Market Size

THE TOTAL MARKET

Consumer Expenditure

Table 3: The UK Clothing Market by

Value (£m at rsp and index 1994=100),

1994-1999

Retail Sales

Table 4: UK Retail Sales by Clothing Retailers

by Value (£m at rsp and index 1994=100),

1994-1999

Table 5: Retail Sales of Clothing Through Clothes Stores and Non-Food Non-Specialist Stores by Value (£m at rsp and index 1995=100), 1995-1999

Manufacturers’ Sales

Apparent UK Market for Clothing

Table 6: The Apparent UK Market for Clothing by Value (£m at msp), 1994-1998

EXPORTS AND IMPORTS

UK Trade Balance

Table 7: UK Balance of Trade in Clothing

by Value (£m), 1994-1999

Exports

By Region

Table 8: UK Clothing Exports by Region by Value (£m at cif values), 1999

By Country

Table 9: Major UK Clothing Exports by

Country by Value (£m at cif values),

1999

Imports

By Region

Table 10: Major Sources of UK Clothing

Imports by Region and Value

(£m at fob values), 1999

By Country

Table 11: Major Sources of UK Clothing

Imports by Country by Value

(£m at fob values), 1999

Average Weekly Expenditure

By Type of Garment

Table 12: Average Weekly Household Expenditure on Clothing by Type of

Garment by Value (£),

1994/1995-1998/1999

By Occupation of Head of Household

Table 13: Average Weekly Household Expenditure on Clothing by Occupation

of the Head of Household by Value (£), 1998/1999

By Age of Head of Household

Table 14: Average Weekly Household Expenditure on Clothing Spending by

Age of Head of Household by Type of

Garment (£), 1998/1999

By Type of Retail Outlet

Table 15: Average Weekly Household Expenditure on Clothing by Type of Outlet

by Type of Garment (£), 1998/1999

3. Industry Background

RECENT HISTORY

INDUSTRY CONCENTRATION

Textiles Manufacturers

Table 16: Number of UK VAT-Registered Textiles Manufacturing Enterprises by

Type, 1993-1997

Clothing Manufacturers

Table 17: Number of UK VAT-Registered Clothing Manufacturing Enterprises by

Turnover (£000), 1999

EMPLOYMENT

Table 18: The UK Clothing and Footwear Manufacturing Industry by Number of

Employees (000 and index 1995=100),

1995-1999

Table 19: Number of Employees in the UK Clothing and Textiles Manufacturing

Industries (000), September 1998

and 1999

Table 20: Number of Employees in the UK Clothing Manufacturing Industry by

Employee Type by Number (000),

1994-1998

Table 21: Average Weekly Earnings of Full-Time Textiles Workers Compared With Average Weekly Earnings of Manufacturing

Workers (£), 1999

Table 22: Number of UK VAT-Based Local Units Engaged in the Manufacture of Clothing by Employment (number), 1999

TRADE ASSOCIATIONS

British Apparel and Textile Confederation

British Clothing Industry Association

Knitting Industries’ Federation

British Knitting & Clothing Export Council

4. Competitor Analysis

INTRODUCTION

Table 23: Selected Leading UK Clothing Manufacturers by Turnover (£m), 1998/1999/2000

MARKET LEADERS

Coats Viyella PLC

Courtaulds Textiles PLC

Pentland Group PLC

William Baird PLC

Dewhirst Group PLC

Sherwood Group PLC

Alexon Group PLC

Dawson International PLC

Umbro Europe Ltd

Austin Reed Group PLC

Alexandra PLC

Other Companies

Berwin & Berwin Ltd

Daks Simpson (San East UK PLC)

Horace Small Apparel Ltd

Martin International Holdings PLC

Stirling Group PLC

ADVERTISING AND PROMOTION

Table 24: Main Media Advertising Expenditure by Clothing Brands (£000), Year Ending December 1998 and 1999

5. Strengths, Weaknesses, Opportunities and Threats

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

6. Buying Behaviour

INTRODUCTION

Menswear

Table 25: Clothing Items Bought by Men in the Last Year by Type ( percent of men), 1999

Table 26: Share of All Men Buying Menswear Items in the Last Year by Type by Price

( percent of men), 1999

Table 27: Share of All Women Buying Items for Men in the Last Year by Type of Item

by Price ( percent), 1999

Womenswear

Table 28: Clothing Items Bought by Women

in the Last Year by Type ( percent of women),

1999

Table 29: Share of All Women Buying Womenswear in the Last Year by Type

by Price ( percent), 1999

Childrenswear

Table 30: Share of All Women Buying Childrenswear by Type of Garment by

Price ( percent), 1999

Sports and Leisure Wear

Table 31: Share of All Men and Women Buying Sports and Swimwear by Price ( percent), 1999

Corporatewear and Workwear

to the Industry

UK TEXTILES MANUFACTURE

Table 32: Textiles Manufactured in the UK

by Type of Fibre (million linear metres),

1994-1998

Table 33: UK Production of Textiles and Clothing by Type by Volume

(index 1995=100), 1995-1999

Wool

Table 34: Major Wool Producing Countries

by Raw Wool Measured by Clean Equivalent

(000 tonnes), 1997/1998

Cotton and Other Natural Fibres

Table 35: Other Natural Fibres by Global Demand by Volume (million pounds),

1997 and 1998

Man-Made Fibres

TEXTILE MACHINERY

Table 36: Apparent UK Market for Textile Machinery by Value (£m), 1997-1999

8. Current Issues

OVERSEAS MANUFACTURING

Table 37: European Clothing Manufacture by Country by Turnover and Employment

(million euros and 000), 1997

Table 38: Major European Clothing

Markets by Exports and Imports by

Value ($bn), 1998

Table 39: Major Clothing Exporting

Countries by Exports and Imports by

Value ($bn), 1998

COUNTERFEITING AND

GREY IMPORTS

CHANGES IN CONSUMER

PREFERENCES

Table 40: UK Population by Age Group (million), 1996-2011

9. Forecasts

FORECASTS 2000 TO 2004

Retail Sales

Table 41: Forecast UK Clothing Market

by Value (£m at rsp), 2000-2004

Manufacturers’ Sales

Table 42: Forecast UK Clothing Market

by Value (£m at msp), 2000-2004

10. Company Profiles

Alexon Group PLC

Austin Reed Group PLC

Coats Viyella PLC

Courtaulds Textiles PLC

Dawson International PLC

Dewhirst Group PLC

Pentland Group PLC

Sherwood Group PLC

William Baird PLC

11. Further Sources

Associations

Periodicals

Directories

General Sources

Bonnier Information Sources

Government Publications

Other Sources

Understanding TGI Data

Number, Profile, Penetration

Social Grade

Standard Region

Key Note Research

The Key Note Range of Reports

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Last updated by Jacob van Eldik 19th June 2000