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Textile Wholesaling in the UK March 2016 Giancarlo Morelli Calvo

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Textile Wholesaling in the UK March 2016 Giancarlo Morelli Calvo Cottoning on: Revenue is set to expand as operators benefit from increased consumer spending This report was provided to IBISWorld Staff Member (211726865) by IBISWorld on 02 September 2016 in accordance with their licence agreement with IBISWorld IBISWorld Industry Report G46.410 Textile Wholesaling in the UK March 2016 Giancarlo Morelli Calvo 2 About this Industry 11 Products & Markets 19 Major Companies 2 Industry Definition 11 Supply Chain 2 Main Activities 11 Products & Services 22 Operating Conditions 2 Similar Industries 12 Major Markets 22 Capital Intensity 2 Additional Resources 13 Globalisation & Trade 14 Business Locations 23 Key Statistics 3 Industry at a Glance 23 Industry Data 16 Competitive Landscape 23 Annual Change 4 Industry Performance 16 Market Share Concentration 23 Key Ratios 4 Executive Summary 16 Key Success Factors 4 Key External Drivers 16 Cost Structure Benchmarks 24 Jargon & Glossary 5 Current Performance 18 Barriers to Entry 7 Industry Outlook 9 Industry Life Cycle www.ibisworld.co.uk | 020 7222 9898 | [email protected] WWW.IBISWORLD.CO.UK Textile Wholesaling in the UK March 2016 2 About this Industry Industry Definition Firms in this industry wholesale linen and haberdashery. various textile products, including The industry excludes textile yarn, thread, fabric, cloth, household fibre wholesaling. Main Activities The primary activities of this industry are Yarn and thread wholesaling Fabric and cloth wholesaling Household linen wholesaling Haberdashery wholesaling The major products and services in this industry are Bed linen Fabric and cloth Haberdashery Other household linen Other textile products Soft furnishings Yarn Similar Industries C13.200 Textile Weaving & Finishing in the UK Operators in this industry weave and spin textiles from raw materials. C13.920 Household Textile & Soft Furnishing Manufacturing in the UK Firms in this industry manufacture household textile products. C14.000 Clothing Manufacturing in the UK Participants in this industry manufacture clothing and outerwear. G46.420 Clothing & Footwear Wholesaling in the UK Businesses in this industry wholesale clothing and footwear to retailers. Additional Resources For additional information on this industry www.interiortextiles.com British Interior Textiles Association www.ons.gov.uk Office for National Statistics www.texi.org The Textile Institute www.ukft.org UK Fashion & Textile Association Provided to: IBISWorld Staff Member (211726865) | 02 September 2016 WWW.IBISWORLD.CO.UK Textile Wholesaling in the UK March 2016 3 Industry at a Glance Textile Wholesaling in 2015-16 Key Statistics Revenue Annual Growth 11-16 Annual Growth 16-21 Snapshot £4bn 2.5% 1.2% Profit Wages Businesses £214.3m £340.7m 2,258 Revenue vs. employment growth Demand from department stores Market Share There are no 15 4 major players in 10 2 this industry 5 0 0 −2 % change −5 % change −10 −4 −15 −6 Year 08 10 12 14 16 18 20 22 Year 09 11 13 15 17 19 21 Revenue Employment SOURCE: WWW.IBISWORLD.CO.UK p. 19 Products and services segmentation (2015-16) 3.9% Key External Drivers Other textile products Demand from 6.7% 26.8% Haberdashery Fabric and cloth department stores Demand from 8.8% furniture, lighting and Yarn homeware retailers Real effective exchange rate Demand from household 12.4% textile and soft furnishing Soft furnishings manufacturing World price of cotton 24.1% p. 4 17.3% Bed linen Other household linen SOURCE:SOURCE: WWW.IBISWORLD.CO.UK WWW.IBISWORLD.COM Industry Structure Life Cycle Stage Mature Regulation Level Light Revenue Volatility Low Technology Change Low Capital Intensity Low Barriers to Entry Low Industry Assistance None Industry Globalisation Low Concentration Level Low Competition Level Medium FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 23 Provided to: IBISWorld Staff Member (211726865) | 02 September 2016 WWW.IBISWORLD.CO.UK Textile Wholesaling in the UK March 2016 4 Industry Performance Executive Summary | Key External Drivers | Current Performance Industry Outlook | Life Cycle Stage Executive Industry operators source fabric and negatively, especially in the domestic Summary household linen from domestic and retail and manufacturing sectors. international manufacturers and sell it on However, the industry has been to retailers and other manufacturers for supported by strong demand from luxury further processing. The Textile retailers, department stores and Wholesaling industry has struggled producers of high-end clothing, against challenging conditions in recent accessories and homeware over the past years, with industry employment five years. The trend towards onshoring declining over the past five years. by some UK manufacturers and the drive Operators have been suffering from to shorten supply chains, as a result of intensified competition along the supply fast fashion, has played into the hands of chain for the provision of textiles from the remaining wholesalers. As a result, both manufacturers of textile products at revenue is expected to expand at a home and abroad. The development of compound annual rate of 2.5% over the five years through 2015-16. Industry revenue is expected to total £4 billion in The aftermath of the downturn has continued 2015-16, up 1.6% on the previous year. The UK economy is expected to to affect the industry’s downstream markets strengthen over the next five years, which should push up income and spending e-commerce platforms has increased this levels; operators are anticipated to competitive threat by allowing retailers to perform well as consumers increase their obtain stock from foreign manufacturers spending. Furthermore, the expanding over the internet with minimum hassle. trend towards onshoring is resulting in Operators have had to make efficiency more textile manufacturers returning to improvements in order to reduce lead the United Kingdom, which is beneficial times and become more competitive. for operators. However, the outlook for Changes include quality checks and the industry remains fairly unstable. labour reductions. Employment is Wholesale bypass will be the main estimated to decline at a compound barrier to success for the industry and annual rate of 1.5% over the five years should constrain profitability levels. through 2015-16. Revenue is forecast to increase modestly The aftermath of the economic over the next five years, at a compound downturn has continued to affect the annual rate of 1.2% to reach £4.3 billion industry’s downstream markets by 2020-21. Key External Drivers Demand from furniture, lighting Real effective exchange rate and homeware retailers Industry operations involve a significant Furniture, lighting and homeware amount of movement of textile products retailers stock bedding and other across international borders, leaving household linen and are a substantial operators vulnerable to changes in the market for industry operators. As demand value of the pound. In particular, the for these retailers rises, their revenue is price of imports can affect the margin of likely to increase, resulting in their wholesalers wishing to sell foreign fabrics purchasing more textile product lines to in the UK market. A higher valued pound satisfy consumer interest. As consumer is represented by a higher real effective confidence has rebounded, consumers exchange rate, which tends to make have rediscovered their appetites for imported products cheaper and exported homeware. Demand from this market is products more expensive in international expected to grow in 2015-16, creating an markets. The real effective exchange rate opportunity for textile wholesalers. is expected to increase in 2015-16. Provided to: IBISWorld Staff Member (211726865) | 02 September 2016 WWW.IBISWORLD.CO.UK Textile Wholesaling in the UK March 2016 5 Industry Performance Key External Drivers Demand from household textile and increase dramatically, manufacturers continued soft furnishing manufacturing generally need to pass on these higher Manufacturers purchase fabric and costs on to wholesalers. The world threads from wholesalers to use in the price of cotton is expected to have production of home textiles and soft fallen during 2015. furnishings. However, the market stagnated slightly during the past five Demand from department stores years and soft furnishing manufacturers Department stores are a major market for have been bypassing wholesalers and wholesalers because they purchase fabric, purchasing directly from fabric cloth, bed linen, other household linen manufacturers at a lower cost. Demand and haberdashery. These stores also from manufacturers is expected to stock high-quality textile products. An increase in 2015-16. increase in demand from department stores is likely to result in higher revenue World price of cotton for wholesalers. Demand from As many textile products are made department stores is expected to increase from cotton, the price of cotton can in 2015-16. However, department stores reflect the performance of the Textile are increasingly bypassing wholesalers, Wholesaling industry. If cotton prices which is a threat to operators. Demand from department stores Demand from furniture, lighting and homeware retailers 4 6 2 4 2 0 0 −2 % change % change −2 −4 −4 −6 −6 Year 09 11 13 15 17 19 21 Year 09 11 13 15 17 19 21 SOURCE: WWW.IBISWORLD.CO.UK The Textile Wholesaling industry has However, these constraints have been Current expanded at a fairly steady pace over the mitigated by increasing demand from Performance past five years, with growth limited by a high-end
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