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
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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.
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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 premium markets, where significant change in the buying consumer demand has remained strong. behaviour of its downstream markets. As High-end homeware stores and consumers and businesses struggled to department stores such as John Lewis cope with the effects of the protracted have helped to keep operators afloat and economic downturn, they tended to seek those wholesalers that cater to these out cheaper textile items. Domestic markets have performed well. Revenue is wholesalers faced a challenge from anticipated to increase at a compound international manufacturers and annual rate of 2.5% over the five years wholesalers, which forced them to reduce through 2015-16 to reach £4 billion. their prices and mark-ups in order to However, this strong growth rate is partly remain competitive and retain their a result of revenue having started from a existing customers. low base, which skews the growth figure,
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Industry Performance
Current Performance and means that companies are recouping bypass has negatively affected the continued lost ground. Apart from 2012-13, when the structure of the industry and is expected UK economy was rocked by international to restrict growth. Additionally, profit headwinds, the industry has largely margins have been hampered by increased strengthened in real terms since 2010-11. competition and relatively high costs for Growth of 1.6% is expected in the both domestic and foreign manufacturers, current year thanks to strong demand which have passed these cost increases on conditions as consumers ride the wave of to wholesalers. The average profit margin a strengthening economy and increase for industry operators is estimated to be their spending. Nevertheless, wholesale 5.3% in the current year.
Picking up In the late 1980s, China introduced a new threads series of economic reforms that opened Industry operators have the market to privatisation and foreign capital. China quickly became a global been forced to focus on superpower in terms of manufacturing improving their supply and ‘Made in China’ tags began to appear chains and client services in a large portion of textile products globally. China’s rise significantly affected manufacturing sectors worldwide some years, with Zara, a Spanish clothing included that of the United Kingdom. firm, stepping up the game as early as British textile wholesalers buy textiles 2005. The fast fashion concept involves manufactured in the United Kingdom or moving designs from the runway to the source textile products in international retail market quickly in order to take markets to sell to local or foreign advantage of trends that are currently in customers. The rise of countries with vogue. The burgeoning online market for cheap labour and low production costs, clothing is speeding up demand for fashion such as China and India, has significantly ranges to be made quickly available to reduced the cost of manufacturing cloths consumers. Although China and other and textiles, making British Asian countries still offer the best price manufacturers less competitive and more when buying bulky items, fast fashion expensive in relative terms. requires shorter supply chains, which has a Since 2010-11, however, UK direct influence on clothing wholesalers manufacturing industries have enjoyed a and benefits UK manufacturers. The most more positive outlook. Onshoring successful textile wholesalers have taken manufacturing, whereby local advantage of this change by offering manufacturers move some of their retailers the detailed knowledge of supply manufacturing operations back to the chains that they require. United Kingdom, is a current industry Operators have been forced to focus on trend. While the maturation of the improving their supply chains and client Chinese economy is partly responsible for services as other market preferences have this change, increased demand for items shifted. Wholesalers such as Turner Bianca that are made in Britain has significantly are investing heavily in technological affected this shift. Exporters of British- developments to reduce lead times and made textiles and other textile wholesalers improve the quality of their service. have been supported by this development. Manufacturers may require raw materials Trends that originate at the retail end of of a particular quality and will deal with the market are also encouraging this wholesalers that can provide this. In movement towards manufacturing in the addition, retailers may source stock from a United Kingdom. Fast fashion has been a wide range of wholesalers, or only those feature of high-street clothing retail for than can supply specific textile products.
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Industry Performance
Hanging by a thread Despite improvement in retail markets in wholesalers because they obtain their the United Kingdom since 2010-11, own-label merchandise directly from wholesalers have not necessarily felt the manufacturing partnerships. full reward. Large retailers are Traditionally, specialist and increasingly importing stock directly independent retailers have been a big from international manufacturers and market for industry wholesalers. wholesalers in order to reduce their costs. However, with the traditional retail For example, Inditex, the owner of Zara, market flat and retail establishments on Bershka, Pull&Bear and other brands, the decline, demand from this market has manufactures a large percentage of its weakened significantly. However, the clothes in Spain, Portugal and Morocco. online retail market has skyrocketed over Wholesalers are being pushed out of the past decade, providing consumers some supply chains or forced to cut their with an easier way of shopping. Higher prices in order to remain competitive. A operating costs mean that larger retailers number of department stores have are becoming stronger and capturing the entered into long-term contracts with market share of smaller retailers. This manufacturers, thereby completely means that many independent retailers cutting out the role of wholesalers. Larger have gone out of business. Unfortunately, retail stores are developing own-label wholesalers are losing out on a significant products such as bed linen, curtains and market because it is the smaller and household linen, which puts them in independent retailers that are less likely direct competition with the stock sold by to bypass wholesalers.
The UK economy is expected to Industry strengthen consistently over the Industry revenue next five years, which should Outlook 10 generate rising UK employment, income and spending levels. This is 5 anticipated to support increased retail demand as consumers loosen 0 their purse strings and look to −5
renovate their homes, helping to % change drive downstream demand for −10 wholesaling operations. However, the trend towards circumventing −15 wholesalers in order to shorten Year 08 10 12 14 16 18 20 22 firms’ supply chains will persist, forcing firms to make efficiency SOURCE: WWW.IBISWORLD.CO.UK improvements. In the five years through 2020-21, industry and revenue is forecast to increase employment is forecast to decline at a compound annual rate of 1.2% at a compound annual rate of 0.2% to £4.3 billion.
Fashioning the future The retail landscape is expected to follow more retailers off the high street. existing trends over the next five years. Nevertheless, online retailers represent a Independent stores are likely to continue significant growth opportunity for to fold and establishment figures are wholesalers. The proportion of likewise forecast to decline. The online household items and haberdashery market is likely to keep growing, pushing bought online is forecast to grow rapidly,
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Industry Performance
Fashioning the future so wholesalers that can win contracts in 2013. The trend is expected to intensify continued with these internet retailers will have the over the next five years as long as opportunity to secure a stable revenue government regulations remain relatively stream. However, in order to secure this supportive of the manufacturing sector, chunk of revenue, wholesalers may need particularly in respect of trade support. to cut their prices, since industry Wholesale bypass is likely to continue operators will still face competition from to be a threat for industry operators. Both international wholesalers and textile producers and end consumers are manufacturers. On the other hand, keen to surpass wholesalers in an effort operators could use the e-commerce to eliminate the extra mark-up they platform for their own ends by using it to represent. Several producers and simplify clients’ stock purchases. consumers support wholesale bypass, The growing trend towards onshoring because, in theory, without wholesalers, in the manufacturing sector is likely to consumers pay a lower price for textiles benefit operators, as more manufacturers and producers increase profit levels. are moving a portion of their operations Therefore, streamlining delivery back into the United Kingdom following operations and making efficiency increased demand for items made in improvements is essential for any Britain and calls for shorter supply operators that want to remain chains. According to the government’s competitive and attract customers. Manufacturing Advisory Services, one in Increased costs relating to this strategy six manufacturers brought some of their may limit profit margins as industry operations back to the United Kingdom operators attempt to win back demand.
The fabric of society There are also some major opportunities for firms operating in the industry over Demand for high-end the next five years. Demand for high-end bespoke furniture fabrics and bed linen bespoke furniture fabrics will benefit firms that wholesale premium will benefit firms that and designer fabrics. Niche markets for wholesale designer fabrics these types of products are expected to develop as wealthy consumers look for ways to differentiate themselves. Many become longer, which would raise designer fabric stores aimed at affluent transportation and storage costs for clients have opened across the United wholesalers. Firms that are unable to Kingdom in the past few years, a trend pass these extra costs on to their retail that is expected to continue. As a result, and manufacturing clients will be forced wholesalers should receive extra demand to endure lower profit margins. from bespoke retailers. Long-term currency fluctuations can Higher textile imports will benefit add to the risks for companies that some textile wholesaling companies. import textile products. While importers Lower costs for yarn, fabric and finished prefer a strong pound in order to textile products and soft furnishings are minimise their purchase costs, textile likely to result in wider margins for these product exporters benefit from a weaker importers. Wholesalers may be able to pound. Those textile wholesalers that pass cost savings on to manufacturers implement relevant and sufficient and retailers or increase their own hedging strategies will be able to margins. However, as import volumes minimise their foreign exchange risks continue to rise, supply chains could and limit revenue fluctuations.
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Industry Performance
Life Cycle Stage Industry value added is forecast to increase at a slower rate than GDP over the decade through 2020-21 The industry is focusing on efficiency maximisation and cost reductions Wholesale bypass is decreasing the inventory purchased from industry operators
20 Maturity Quality Growth Key Features of a Mature Industry Company High growth in economic consolidation; importance; weaker companies Revenue grows at same pace as economy level of economic close down; developed Company numbers stabilise; M&A stage importance stable technology and markets Established technology & processes Total market acceptance of product & brand 15 Rationalisation of low margin products & brands % Growth in share of economy in share % Growth
10
Quantity Growth Many new companies; minor growth in economic importance; substantial 5 technology change Household Textile & Soft Furnishing Manufacturing
Carpet, Rug & Curtain Retailers 0 Department Stores Clothing Manufacturing Textile Wholesaling
-5 Textile Weaving & Finishing Decline Shrinking economic importance
-10 -10 -5 0 5 10 15 20 % Growth in number of establishments
SOURCE: WWW.IBISWORLD.COM
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Industry Performance
Industry Life Cycle The Textile Wholesaling industry is in the industry under pressure. The industry mature stage of its life cycle. Industry has been adversely affected by wholesale value added (IVA), a measure of the bypass, a situation that is becoming This industry industry’s contribution to the overall UK increasingly common. Larger customers is Mature economy is expected to grow at a have in recent years taken advantage of compound annual rate of 0.5% over the their purchasing power to make direct 10 years through 2020-21. Real GDP is purchases from domestic and expected to grow at a compound annual international manufacturers to save rate of 2.1% over the same period. costs. This practice has intensified Despite falling margins and a declining negative trends in the industry and proportion of revenue going to pay forced many wholesalers to stop labour, rising turnover over the 10-year operating altogether. Wholesale bypass period are likely to ensure that textile practices and competition can potentially wholesalers continue to contribute to the push inefficient operators out of the growth of the economy. market. The firms in the industry intend Some features of the industry are to reduce costs and maximise efficiencies, indicative of slowing performance and an as technological innovation is rare.
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Supply Chain KEY BUYING INDUSTRIES C13.200 Textile Weaving & Finishing in the UK Textile weaving and finishing firms acquire yarn from textile wholesalers for further processing. C13.920 Household Textile & Soft Furnishing Manufacturing in the UK Textile product manufacturers purchase yarn and fabrics to produce towels, bed linen, blankets, quilts and other textile products. C14.000 Clothing Manufacturing in the UK Apparel manufacturers are important users of yarn and fabrics. G47.190 Department Stores in the UK Department stores acquire finished textile products from textile wholesalers, including domestically made and imported products. G47.530 Carpet, Rug & Curtain Retailers in the UK Curtain retailers sell products supplied by textile wholesalers to final customers.
KEY SELLING INDUSTRIES C13.100 Preparation and Spinning of Textile Fibres in the UK Textile wholesalers purchase yarn and other products from firms in this industry. C13.200 Textile Weaving & Finishing in the UK Weaved fabrics are supplied to textile wholesalers for resale to downstream manufacturers for further processing. C13.920 Household Textile & Soft Furnishing Manufacturing in the UK Textile product manufacturers sell textile products to wholesalers for resale to retailers.
Products & Services Fabric and cloth sheets, is the second-largest segment. In Fabric and cloth purchased as the current year about 24.1% of industry intermediate inputs in the production of revenue is expected to be generated by clothing, household linen, furnishings and bed linen products. Demand for these other products are estimated to generate products was suppressed during the 26.8% of revenue in 2015-16. These items recession but the segment has grown are purchased by large-scale slightly as a share of revenue because manufacturers, tailors, fashion designers operators have moved away from and retailers. Fabric and cloth products producing fabric and cloth to concentrate have contributed a declining share of more on other products. Furthermore, in revenue over the past five years because the past two years, demand for finer rising production and labour costs have quality bed linen has been rising. This driven manufacturers out of business. The segment is expected to overtake the majority of clothing sold in the United fabric and cloth segment over the next Kingdom is imported from overseas, which five years. has severely affected the performance of UK clothing makers. Those industry Other household linen operators that specialise in supplying the This segment covers towels and other few remaining UK clothing manufacturers related bathroom products, curtains, have typically done well because UK tablecloths and other household linen. manufacturers demand higher quality and Demand for products in this segment is more expensive materials. estimated to have declined as consumers cut back on discretionary Bed linen purchases. However, demand for higher Bed linen, which includes duvets, duvet quality items is expected to have covers, blankets, pillows, pillowcases and sustained the segment.
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Products & Markets
Products & Services Soft furnishings Other products continued This segment includes cushions, Yarn is estimated to account for 8.8% upholstery and designed textiles for of revenue and is typically sold to households. Its share of revenue has grown mass manufacturers of knitted over the past five years to constitute an products and downstream retailers. estimated 12.4% of the total as consumers Haberdashery includes thread, sewing have chosen to upgrade their furniture by needles and trimmings and is changing covers and purchasing new estimated to account for 6.7% of furnishings instead of fully renovating revenue. Examples of items included their homes. Operators have also increased under other textile products are rope, their stock of soft furnishings. tarpaulin, sacks and bags.
Products and services segmentation (2015-16) 3.9% 6.7% Other textile products Haberdashery 26.8% Fabric and cloth 8.8% Yarn
12.4% Soft furnishings
24.1% 17.3% Bed linen Other household linen Total £4bn SOURCE: WWW.IBISWORLD.CO.UK
Major Markets Department stores industry revenue, and are usually at the The largest segment is department stores, medium and high-end of the market. which generate 34.2% of industry These include specialist retailers for bed revenue. Department stores sell a wide linen, curtains, soft furnishings and range of textile products and soft other household textile products as well furnishings, and are a traditional retail as fabric, cloth, yarn and haberdashery. outlet for these goods. They usually offer The wavering retail market has affected premium and luxury products that sell at demand from specialist retailers over higher prices. However, a number of the past five years. Priced out by department stores have begun to offer department stores, supermarkets and own-label versions of bed linen, which online retailers, the independent retail they procure directly from manufacturers store is slowly declining and is rather than wholesalers. Nevertheless, struggling to maintain its revenue share. larger department stores such as John As establishments continue to vanish off Lewis are significant buyers of fabric and the high street, the segment’s future haberdashery for the consumer’s seems shaky. However, higher-end personal use. stores have benefited from unwavering demand in the past five years and Specialist retailers wholesalers such as Turner Bianca that Specialist textile product retailers are cater to this market have done estimated to account for 27.7% of particularly well.
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Products & Markets
Major Markets Manufacturers savvy consumers have become more continued The manufacturing market segment is comfortable with online shopping estimated to account for 17.4% of industry experiences. The increase in popularity of revenue. Clothing manufacturers are appliances such as mobile phones, estimated to make up the largest sub- portable computers and efficient payment segment within this; they acquire yarn, options have all contributed to a sudden fabric and cloth from textile wholesalers to boom in online shopping. However, process into finished clothing. Textile industry operators face competition from product manufacturers purchase foreign competitors as online retailers are intermediate goods from textile able to import stock from cheaper wholesalers for the manufacture of economies such as China. Nevertheless, household textile products and soft the segment remains a huge opportunity furnishings. The segment has grown in for industry operators. Revenue for this recent times due to a wave of onshoring segment is expected to increase but whereby firms that previously moved competition will remain a major issue. operations overseas to avoid higher UK Online retailers are estimated to account production costs are moving back into the for 13.3% of industry revenue. UK. However, manufacturers are still more likely to purchase directly from other Other markets manufacturers, bypassing the wholesaler. Other retailers include supermarkets, discount stores and other miscellaneous Online retailers outlets. These retailers usually stock a Online retail has been given a major wide range of household textile products boost over the past five years as tech- often sold at the lower end of the market.
Major market segmentation (2015-16) 7.4% Other markets 34.2% 13.3% Department stores Online retailers
17.4% Manufacturers
27.7% Total £4bn Specialist retailers SOURCE: WWW.IBISWORLD.CO.UK
Globalisation & Trade Textile wholesalers purchase textile not a part of this industry. products for resale directly from domestic Globalisation levels are low in the manufacturers, or import these products industry because the vast majority of firms from foreign firms. Exports are estimated are UK-owned rather than foreign-owned. to account for a relatively small proportion Few UK firms are estimated to own textile of textile product revenue while import wholesaling businesses in other countries. levels have increased significantly. However, the industry is sensitive to However, international trade is conducted globalisation trends through the volatility at the manufacturing level and is hence of exchange rates.
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Products & Markets
Business Locations 2015-16
SCOTLAND 3.4
NORTH EAST 1.4 NORTHERN NORTH IRELAND WEST 2.0 17.5
YORKSHIRE 9.4
EAST MIDLANDS 10.0 WEST MIDLANDS EAST OF 6.4 ENGLAND 6.0 WALES 1.4 LONDON 29.1 SOUTH SOUTH EAST Establishments (%) WEST 9.0 4.4 Cold Zone (<10) <25 <50 Hot Zone (<100) Not applicable
SOURCE: WWW.IBISWORLD.CO.UK
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Products & Markets
In line with other wholesaling industries, Business Locations Distribution of establishments vs. population establishments in the Textile Wholesaling industry are primarily located close to 30 major retailers and distributors, which are in turn predominantly situated around 25
major population clusters and areas where 20 household wealth and incomes are relatively high. Proximity to head offices of 15 major customers such as corporations is
Percentage 10 also important. The distance between major market segments can be critical, 5 because it impacts transportation costs 0 and the time for products to reach clients.
Industry establishments are particularly Wales London Scotland Yorkshire North East concentrated in four regions: London, the South East North West South West East Midlands
North West, East Midlands and Yorkshire. West Midlands East of England Northern Ireland London Establishments London is estimated to account for the Population largest share of industry establishment SOURCE: WWW.IBISWORLD.CO.UK with 29.1% of the total. The city and surrounding areas are densely packed overwhelmingly higher than its share with retailers. The density of the of the population. Both of which have population and high levels of disposable relatively sizeable clusters of clothing income around the region make it a fertile manufacturers. Traditionally the market for retailers. Luxury products with North West had been closely higher average selling prices are more associated with textile and clothing popular in London. The distribution of manufacturing, but has been in clothing manufacturers is now skewed long-term decline. Nevertheless, the towards London as well make the region North West is still an appealing area even more attractive to wholesalers. Good for textile. Yorkshire accounts for transport links around the region are also 9.4% of establishments while the important for wholesalers. South East accounts for 9%. On the other end, the regions with the Other regions smallest number of establishments are The East Midlands accounts for 10% of Wales and the North East, with 1.4% establishments while the North West each, due to low income levels and low accounts for 17.5%, which is levels of business activity.
Provided to: IBISWorld Staff Member (211726865) | 02 September 2016 WWW.IBISWORLD.CO.UK Textile Wholesaling in the UK March 2016 16 Competitive Landscape Market Share Concentration | Key Success Factors Cost Structure Benchmarks | Barriers to Entry
Market Share Since it is highly fragmented and there Concentration are no significant major players, the Enterprises by employment size, 2015 Textile Wholesaling industry is Employees Share of total (%) considered to have a low level of market Level 0-4 69.6 share concentration. Together, the top 5-9 15.4 Concentration in four players in the industry are 10-19 9.2 this industry is Low estimated to account for just 5.6% of the 20-49 4.4 market in 2015-16. The biggest player, 50-99 1.0 Turner Bianca, accounts for just 2.3% of 100+ 0.4 total industry revenue. Wholesalers that serve the premium and luxury markets SOURCE: OFFICE FOR NATIONAL STATISTICS with products that offer broad margins have a stronger position than market. Figures from the Office for enterprises that distribute unbranded or National Statistics (ONS) suggests that low-quality merchandise. However, the 85% of enterprises employed fewer than sheer volume of players and intense 10 people in 2015, while only 0.4% of competition keep concentration down so textile wholesaling businesses have that no one player dominates the more than 99 staff.
Key Success Factors Ability to control stock on hand rather than through wholesalers. The Wholesalers need to ensure stock levels ability to avoid being bypassed in the are optimised to maintain customer supply chain is imperative to survival in IBISWorld identifies needs and minimise storage and the industry. 250 Key Success insurance costs. Factors for a Economies of scope business. The most Control of distribution arrangements Textile wholesaling companies that can important for this To operate successfully, wholesalers supply a wide range of intermediate need to be able to control goods for manufacturers, and finished industry are: distribution costs while maximising products for retailers, can increase operational efficiencies. revenue and profit.
Ability to avoid wholesale bypass Having a diverse range of clients An increasing number of downstream Wholesalers that can supply a wide range retailers are purchasing and importing of products to a large number of clients textile products and clothing directly are more likely to be successful.
Cost Structure Profit material prices to customers, thereby Benchmarks Operators’ profit margins have been squeezing profit margins. A weaker squeezed over the past five years by pound over much of the past five years higher purchasing costs. UK textile has also contributed to higher importing producers that supply the domestic costs although the pound has market can often command higher strengthened in recent times. Overall, prices because the domestic market luxury item wholesalers have typically usually demands higher quality fared better generating higher margins products. Nevertheless, average import due to the higher price points associated prices are continuing to climb as with the products. The average profit for overseas suppliers pass on the cost an industry participant is estimated to increases from rising labour and amount to 5.3% of revenue in 2015-16.
Provided to: IBISWorld Staff Member (211726865) | 02 September 2016 WWW.IBISWORLD.CO.UK Textile Wholesaling in the UK March 2016 17
Competitive Landscape
Cost Structure Purchases Wages Benchmarks Over the past five years, purchases as a Wages are the second largest expense for continued percentage of revenue have been on the industry operators, constituting an increase, largely due to the relatively low estimated 8.4% of industry revenue in value of the pound since the onset of the 2015-16. Industry employees focus on credit crisis which has made it more selling products to clients, handling items expensive to purchase imported goods. and performing administrative tasks. Tight conditions in downstream markets Operating warehouses does not require has meant many customers have not many employees on a daily basis, and been able to absorb higher prices, such these tasks do not require highly skilled that revenue increases have not matched labour. Technological advancements, increases in purchase costs in recent including inventory software and years. Purchases are estimated to account automated machinery, are replacing the for 77.2% of revenue. The shift towards need for employees and wages as a more expensive textiles has raised the percentage of revenue has declined share of revenue that wholesalers need to slightly over the past five years. outlay on products. Rising prices for certain traditional fabrics has also been a Other costs cause for concern. For example, the Depreciation is estimated to account for domestic price of wool has risen 0.9% of industry revenue. Depreciable significantly over the past five years. The assets include buildings, storage products operators purchase include bed equipment, machinery used to move linen, soft furnishings, wall coverings, products and computer inventory curtains as well as raw textile materials systems. Depreciation costs have been such as cloth, fabric, yarn and thread. increasing as industry participants move
Sector vs. Industry Costs
Average Costs of all Industries in Industry Costs sector (2015-16) (2015-16) 100 5.1 5.3 ■ P r o fi t 2.3 1.5 0.4 ■ Rent 1.4 1.1 0.9 7.1 6.3 ■ Utilities 80 8.4 ■ Depreciation 8.4 ■ Other ■ Wages ■ Purchases 60
40 74.6 77.2 Percentage of revenue Percentage
20
0 SOURCE: WWW.IBISWORLD.CO.UK
Provided to: IBISWorld Staff Member (211726865) | 02 September 2016 WWW.IBISWORLD.CO.UK Textile Wholesaling in the UK March 2016 18
Competitive Landscape
Cost Structure towards more automated systems. Rent advertising costs, general expenses, Benchmarks costs are expected to absorb 1.5% of shipping and handling costs, utilities, continued industry revenue. Costs in this industry costs for the renting of machinery and largely cover expenditure required for equipment, and administrative costs. storage facilities. This cost has remained These costs have remained fairly constant fairly constant. Other costs include over the past five years.
Barriers to Entry The barriers to entering the Textile Wholesaling industry are low because Barriers to Entry checklist Level Level & Trend start-up costs are minimal, there are few Competition Medium regulatory requirements and no licensing Barriers to Entry Concentration Low requirements, and a wide variety of in this industry are Life Cycle Stage Mature products can be imported and Capital Intensity Low Low and Steady distributed. For a new wholesaling Technology Change Low company, there can be very low costs Regulation & Policy Light associated with entering this industry. Industry Assistance None For companies handling stock, a new firm may require a van or small truck to SOURCE: WWW.IBISWORLD.CO.UK transport goods, which can be acquired second-hand or leased. Some firms may are wholesaled by this industry, which not physically handle stock, instead provides numerous opportunities for new engaging a third-party to collect and firms entering the industry. As new deliver items. Funds are also required to products and niche markets are purchase stock, which can then be resold developed, new textile wholesaling or supplied to clients. Depending on companies can increase the number of ordering and delivery arrangements, cash clients they serve and boost revenue. For flow monitoring is usually of primary yarns and fabrics that are generally sold concern for new textile wholesaling firms. to apparel and textile product There are few government manufacturers, this industry’s requirements affecting those that want to wholesalers face pressures from declining enter and operate in the industry, and manufacturer numbers and increased there are no specific licensing internal competition. For finished textile requirements that apply when a textile products that are distributed and sold to wholesaling firm is established, although retailers, industry competition is standard worker safety and expected to remain high as retailers exert environmental conditions must be met. pricing pressures on wholesalers to There are many textile products that minimise costs.
Provided to: IBISWorld Staff Member (211726865) | 02 September 2016 WWW.IBISWORLD.CO.UK Textile Wholesaling in the UK March 2016 19 Major Companies There are no major players in this industry | Other
Other Companies Turner Bianca plc Turner Bianca’s performance over the Estimated market share: 2.3% past four years has been characterised Turner Bianca plc supplies a wide by slow, yet consistent growth, which variety of home textiles to UK retailers, help it to grow 5.5% in 2013-14. including soft furnishings and Revenue decreased marginally in household textiles. The company’s 2014-15, but growth is expected to brands include Dorma, Cath Kidston, resume in 2015-16 as the UK economy Margaret Muir and Catherine Lansfield. strengthens. In the current year, Turner Employing over 250 people in the Bianca is expected to generate revenue United Kingdom, the company’s of £93.1 million. headquarters are located in Oldham. Turner Bianca also has offices in Spain, Romo Ltd Portugal, China, India, and Pakistan. Estimated market share: 1.4% The company has design studios and Established in 1902, Romo Ltd is a showrooms at its head office, which also family-operated company based in controls worldwide production, quality Nottinghamshire, with additional offices control, sales and distribution. Turner in London, as well as Germany, the Bianca has invested heavily in Netherlands and the United States, and technology development in the past few with subsidiaries in eight other European years. This includes radio-frequency countries. The company employs over technology at distribution locations and 200 people and markets furnishing and critical path management systems to upholstery fabrics, wall coverings and reduce lead times and improve trimmings for residential and contract efficiencies across the supply chain. interiors. These are produced under six In 2010-11, the company reported a main brands: Romo, Romo Black strong increase in revenue and profit, to Edition, Mark Alexander, Zinc Textile, £101 million and £3.6 million Villa Nova and Kirkby Design. Romo’s respectively. This followed strong revenue has grown over the past five revenue growth in the previous two years as the company has expanded its years, due to continued expansion of product lines and paired with new operations and steady downstream designers to offer fashionable textile demand. Revenue slipped back again in designs. The company reported a revenue 2011-12 as downstream demand was surge of 7.3% in 2013, and this pace of curtailed. However, the popularity of its expansion was maintained in 2014 with major brand, Cath Kidston, helped it revenue reaching £52.1 million. The gain momentum again in 2012-13. company has grown at a fairly similar
Turner Bianca plc – fi nancial performance Revenue Operating Profi t Year (£ million) (% change) (£ million) (% change) 2010-11 101.0 N/C 3.6 N/C 2011-12 86.3 -14.6 0.7 -80.6 2012-13 87.8 1.7 1.6 128.6 2013-14 92.6 5.5 2.0 25.0 2014-15 91.4 -1.3 2.0 0.0 2015-16* 93.1 1.9 2.1 5.0
*Estimate SOURCE: COMPANY CHECK AND IBISWORLD
Provided to: IBISWorld Staff Member (211726865) | 02 September 2016 WWW.IBISWORLD.CO.UK Textile Wholesaling in the UK March 2016 20
Major Companies
Other Companies rate to the wider industry, indicating that employs over 200 staff. It sells and continued this is likely to continue in 2015, with distributes ready-made curtains, bed Romo expected to have generated linen, blinds and cushions across the approximately £55.4 million in revenue. United Kingdom. These are manufactured under the following brands Designers Guild Ltd and company subsidiaries: Dreams ‘N’ Estimated market share: 1% Drapes, Curtina, D P Textiles and Designers Guild Ltd was established in Designatex. The company has been 1970 and is headquartered in London. negatively affected by declining demand The company designs, wholesales and and revenue contracted each year distributes fabric, wallpaper, upholstery, between 2010-11 and 2012-13, before bed linen, bathroom products and other returning to growth in 2013-14. The home products. These are sold and company is expected to continue down distributed in the United Kingdom and growing and to generate revenue of around the world under the Designers approximately £34 million in the year Guild brand. The company employs 230 through September 2016. people in the United Kingdom and another 30 in Munich and Paris. It has Prestigious Textiles Ltd further agents and distributors located in Estimated market share: 0.8% 60 countries across the rest of Europe Prestigious Textiles was founded in 1988 and around the world. by Trevor Helliwell and has carved out a Designers Guild sells and distributes niche in the industry. The company over 2 million metres of fabric and supplies textiles to retailers across the wallpaper each year. It also wholesales United Kingdom. Headquartered in West furniture, which is not included in the Yorkshire, the company also has partner industry. The company generated £49 businesses in Ireland, France, Germany, million in revenue in 2014-15, with an South Africa and China. It has over 60 estimated 85% coming from industry- collections of textiles and wall coverings. related activities, thanks to its luxury The company has been subject to more and premium items receiving high significant fluctuations in revenue than demand. This is expected to continue, some of its competitors but revenue is with the company estimated to generate expected to grow more steadily thanks to industry-related revenue of about £42 improved downstream demand in recent million in 2015-16. years. In expectation of future expansion, the company opened a new 40,000 J Rosenthal & Son Ltd square foot warehouse in January 2016. Estimated market share: 0.9% In the year through August 2016, the Established in 1911, J Rosenthal & Son company is expected to generate revenue Ltd is headquartered in Manchester and of approximately £33 million.
Romo Ltd – fi nancial performance Revenue Operating Profi t Year* (£ million) (% change) (£ million) (% change) 2010 42.9 N/C 5.2 N/C 2011 44.7 4.2 5.8 11.5 2012 45.0 0.7 4.7 -19.0 2013 48.3 7.3 5.8 23.4 2014 52.1 7.9 6.0 3.4 2015** 55.4 6.3 6.4 6.7
*Year end December **Estimate SOURCE: COMPANY CHECK AND IBISWORLD
Provided to: IBISWorld Staff Member (211726865) | 02 September 2016 WWW.IBISWORLD.CO.UK Textile Wholesaling in the UK March 2016 21
Major Companies
Other Companies Richard Haworth Ltd Richard Haworth is part of Ruia Group continued Estimated market share: 0.5% Ltd, which manufactures and wholesales Richard Haworth was established in 1854 textiles and clothing. Most of the firm’s in Manchester, where it originally main clients are part of the hospitality manufactured textiles and operated sector, such as chain and boutique hotels, numerous cotton mills, weaving sheds and restaurants, social clubs and private warehouses. The company thrived during institutions. The company’s profit levels the second half of the nineteenth century, are growing, while revenue is estimated to when the United Kingdom was a global grow at a compound annual rate of 5.5% leader in textile production and cotton over the five years through 2015-16. spinning. Nowadays, the company’s main IBISWorld estimates that Richard activity is the wholesale and distribution Haworth Ltd will generate £19 million of of industrial and household textiles. revenue in the current year.
Provided to: IBISWorld Staff Member (211726865) | 02 September 2016 WWW.IBISWORLD.CO.UK Textile Wholesaling in the UK March 2016 22 Operating Conditions
Capital Intensity The Textile Wholesaling industry has a low capital intensity level due Capital intensity to the high labour component Capital units per labour unit Level required. There are also relatively 0.5 The level of capital low capital inputs required by intensity is Low firms in the industry, while the 0.4 majority of industry costs are 0.3 associated with the acquisition of goods to resell and distribute to 0.2 downstream manufacturers and 0.1 retailers. Comparing capital costs 0.0 to expenditure on wages, the Economy Wholesale and Textile industry is estimated to have a Retail Trade Wholesaling in the UK capital-to-labour ratio of 1:9.37. This Dotted line shows a high level of capital intensity indicates that for every £1.00 spent SOURCE: WWW.IBISWORLD.CO.UK on capital equipment, such as vehicles, machinery and buildings, ratio has been declining as industry operators typically spend automatisation gradually replaces £9.37 on wages. Nonetheless, the some jobs.
Tools of the Trade: Growth Strategies for Success
New Age Economy Investment Economy Recreation, Personal Services, Information, Communications, Health and Education. Firms Mining, Finance and Real benefi t from personal wealth so Estate. To increase revenue stable macroeconomic conditions fi rms need superior debt are imperative. Brand awareness management, a stable and niche labour skills are key to macroeconomic environment product differentiation. and a sound investment plan. Capital Intensive
Household Textile & Soft Furnishing Manufacturing Textile Wholesaling Labour Intensive Carpet, Rug & Curtain Retailers Traditional Service Economy Department Clothing Manufacturing Old Economy Wholesale and Retail. Reliant Stores Agriculture and Manufacturing. on labour rather than capital Textile Weaving & Finishing Traded goods can be produced to sell goods. Functions cannot using cheap labour abroad. be outsourced therefore fi rms To expand fi rms must merge must use new technology or acquire others to exploit or improve staff training to economies of scale, or specialise increase revenue growth. in niche, high-value products.
Change in Share of the Economy SOURCE: WWW.IBISWORLD.CO.UK
Provided to: IBISWorld Staff Member (211726865) | 02 September 2016 WWW.IBISWORLD.CO.UK Textile Wholesaling in the UK March 2016 23 Key Statistics
Industry Data Industry Revenue Value Added Wages Domestic (£ million) (£ million) Establishments Enterprises Employment Exports Imports (£ million) Demand 2007-08 3,815.2 643.3 2,185 2,082 16,885 -- -- 375.6 N/A 2008-09 3,443.5 561.8 2,480 2,201 16,079 -- -- 342.6 N/A 2009-10 3,326.0 575.1 2,530 2,179 16,814 -- -- 345.3 N/A 2010-11 3,576.3 576.8 2,370 2,076 15,950 -- -- 346.0 N/A 2011-12 3,724.3 545.0 2,220 2,002 15,086 -- -- 324.1 N/A 2012-13 3,738.8 541.1 2,155 1,930 14,221 -- -- 333.4 N/A 2013-14 3,861.0 567.7 2,175 2,086 14,957 -- -- 360.8 N/A 2014-15 3,978.8 573.5 2,345 2,212 14,893 -- -- 342.7 N/A 2015-16 4,042.8 591.4 2,495 2,258 14,790 -- -- 340.7 N/A 2016-17 4,098.9 587.9 2,511 2,278 14,738 -- -- 341.9 N/A 2017-18 4,149.0 586.5 2,522 2,300 14,607 -- -- 341.8 N/A 2018-19 4,181.3 596.7 2,545 2,317 14,519 -- -- 341.6 N/A 2019-20 4,248.6 603.2 2,593 2,346 14,538 -- -- 344.1 N/A 2020-21 4,291.1 604.0 2,648 2,381 14,616 -- -- 346.5 N/A 2021-22 4,346.9 613.8 2,710 2,426 14,639 -- -- 348.7 N/A
Annual Change Industry Domestic Revenue Value Added Establishments Enterprises Employment Exports Imports Wages Demand (%) (%) (%) (%) (%) (%) (%) (%) (%) 2008-09 -9.7 -12.7 13.5 5.7 -4.8 N/A N/A -8.8 N/A 2009-10 -3.4 2.4 2.0 -1.0 4.6 N/A N/A 0.8 N/A 2010-11 7.5 0.3 -6.3 -4.7 -5.1 N/A N/A 0.2 N/A 2011-12 4.1 -5.5 -6.3 -3.6 -5.4 N/A N/A -6.3 N/A 2012-13 0.4 -0.7 -2.9 -3.6 -5.7 N/A N/A 2.9 N/A 2013-14 3.3 4.9 0.9 8.1 5.2 N/A N/A 8.2 N/A 2014-15 3.1 1.0 7.8 6.0 -0.4 N/A N/A -5.0 N/A 2015-16 1.6 3.1 6.4 2.1 -0.7 N/A N/A -0.6 N/A 2016-17 1.4 -0.6 0.6 0.9 -0.4 N/A N/A 0.4 N/A 2017-18 1.2 -0.2 0.4 1.0 -0.9 N/A N/A 0.0 N/A 2018-19 0.8 1.7 0.9 0.7 -0.6 N/A N/A -0.1 N/A 2019-20 1.6 1.1 1.9 1.3 0.1 N/A N/A 0.7 N/A 2020-21 1.0 0.1 2.1 1.5 0.5 N/A N/A 0.7 N/A 2021-22 1.3 1.6 2.3 1.9 0.2 N/A N/A 0.6 N/A
Key Ratios Revenue per Share of the IVA/Revenue Imports/Demand Exports/Revenue Employee Wages/Revenue Employees Average Wage Economy (%) (%) (%) (£’000) (%) per Est. (£) (%) 2007-08 16.86 N/A N/A 225.95 9.84 7.73 22,244.60 0.04 2008-09 16.31 N/A N/A 214.16 9.95 6.48 21,307.30 0.03 2009-10 17.29 N/A N/A 197.81 10.38 6.65 20,536.46 0.04 2010-11 16.13 N/A N/A 224.22 9.67 6.73 21,692.79 0.04 2011-12 14.63 N/A N/A 246.87 8.70 6.80 21,483.49 0.03 2012-13 14.47 N/A N/A 262.91 8.92 6.60 23,444.20 0.03 2013-14 14.70 N/A N/A 258.14 9.34 6.88 24,122.48 0.03 2014-15 14.41 N/A N/A 267.16 8.61 6.35 23,010.81 0.03 2015-16 14.63 N/A N/A 273.35 8.43 5.93 23,035.84 0.03 2016-17 14.34 N/A N/A 278.12 8.34 5.87 23,198.53 0.03 2017-18 14.14 N/A N/A 284.04 8.24 5.79 23,399.74 0.03 2018-19 14.27 N/A N/A 287.99 8.17 5.70 23,527.79 0.03 2019-20 14.20 N/A N/A 292.24 8.10 5.61 23,669.01 0.03 2020-21 14.08 N/A N/A 293.59 8.07 5.52 23,706.90 0.03 2021-22 14.12 N/A N/A 296.94 8.02 5.40 23,819.93 0.03
Figures are inflation-adjusted to2016 2015-16. dollars. Rank refers to 2016 data. SOURCE: WWW.IBISWORLD.COM
Provided to: IBISWorld Staff Member (211726865) | 02 September 2016 WWW.IBISWORLD.CO.UK Textile Wholesaling in the UK March 2016 24
Jargon & Glossary
Industry Jargon HABERDASHERY Small items used in sewing or a store WHOLESALE BYPASS When retailers purchase directly that sells such items. from manufacturers, cutting out wholesalers. SOFT FURNISHINGS Textile products that are generally used to decorate items, such as cushions, curtains, blinds and furniture covers.
IBISWorld Glossary BARRIERS TO ENTRY High barriers to entry mean that INDUSTRY REVENUE The total sales of industry goods new companies struggle to enter an industry, while low and services (exclusive of excise and sales tax); subsidies barriers mean it is easy for new companies to enter an on production; all other operating income from outside industry. the firm (such as commission income, repair and service CAPITAL INTENSITY Compares the amount of money income, and rent, leasing and hiring income); and spent on capital (plant, machinery and equipment) with capital work done by rental or lease. Receipts from that spent on labour. IBISWorld uses the ratio of interest royalties, dividends and the sale of fixed depreciation to wages as a proxy for capital intensity. tangible assets are excluded. High capital intensity is more than £0.333 of capital to INDUSTRY VALUE ADDED (IVA) The market value of £1 of labour; medium is £0.125 to £0.333 of capital to goods and services produced by the industry minus the £1 of labour; low is less than £0.125 of capital for every cost of goods and services used in production. IVA is £1 of labour. also described as the industry’s contribution to GDP, or CONSTANT PRICES The pound figures in the Key profit plus wages and depreciation. Statistics table, including forecasts, are adjusted for INTERNATIONAL TRADE The level of international inflation using the current year (i.e. year published) as trade is determined by ratios of exports to revenue and the base year. This removes the impact of changes in imports to domestic demand. For exports/revenue: low is the purchasing power of the pound, leaving only the less than 5%; medium is 5% to 20%; and high is more ‘real’ growth or decline in industry metrics. The inflation than 20%. Imports/domestic demand: low is less than adjustments in IBISWorld’s reports are made using the 5%; medium is 5% to 35%; and high is more than Office for National Statistics’ implicit GDP price deflator. 35%. DOMESTIC DEMAND Spending on industry goods and LIFE CYCLE All industries go through periods of growth, services within the UK, regardless of their country of maturity and decline. IBISWorld determines an origin. It is derived by adding imports to industry industry’s life cycle by considering its growth rate revenue, and then subtracting exports. (measured by IVA) compared with GDP; the growth rate EMPLOYMENT The number of permanent, part-time, of the number of establishments; the amount of change temporary and casual employees, working proprietors, the industry’s products are undergoing; the rate of partners, managers and executives within the industry. technological change; and the level of customer acceptance of industry products and services. ENTERPRISE A division that is separately managed and keeps management accounts. Each enterprise consists NONEMPLOYING ESTABLISHMENT Businesses with of one or more establishments that are under common no paid employment or payroll, also known as ownership or control. nonemployers. These are mostly set up by self-employed individuals. ESTABLISHMENT The smallest type of accounting unit within an enterprise, an establishment is a single PROFIT IBISWorld uses earnings before interest and tax physical location where business is conducted or where (EBIT) as an indicator of a company’s profitability. It is services or industrial operations are performed. Multiple calculated as revenue minus expenses, excluding establishments under common control make up an interest and tax. enterprise. VOLATILITY The level of volatility is determined by EXPORTS Total value of industry goods and services sold averaging the absolute change in revenue in each of the by UK companies to customers abroad. past five years. Volatility levels: very high is more than ±20%; high volatility is ±10% to ±20%; moderate IMPORTS Total value of industry goods and services volatility is ±3% to ±10%; and low volatility is less than brought in from foreign countries to be sold in the UK. ±3%. INDUSTRY CONCENTRATION An indicator of the WAGES The gross total wages and salaries of all dominance of the top four players in an industry. employees in the industry. Benefits and on-costs are Concentration is considered high if the top players included in this figure. account for more than 70% of industry revenue. Medium is 40% to 70% of industry revenue. Low is less than 40%.
Provided to: IBISWorld Staff Member (211726865) | 02 September 2016 www.ibisworld.co.uk | 020 7222 9898 | [email protected]
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