Sales growth and efficiency gains have helped UK fashion manufacturers “recover their margins and put them on a firm footing for 2026”, a sometimes upbeat quarterly performance report shows.
Archivo
New figures from inventory management specialist Unleashed reveal Q3 2025 revenue from sales rebounded with small- and mid-sized firms generating an average of £500,517 – nearly 5% more than the previous quarter.
But it’s not all rosey as profitability, measured as gross margin percentage (GMP), dropped slightly (-2.5pp) compared to the previous quarter, “as lead times, purchasing volumes and stock on hand value all dropped”. Here, lead times fell from 32 to 22 days (-31% quarter-on-quarter), while purchase orders (POs) and stock on hand declined 56% and 33.5%, respectively.
Joe Llewellyn, GM of ERP Small Business at The Access Group, parent company of Unleashed, said clothing, footwear and accessories manufacturers had “moved quickly to protect their margins” with the last quarter “characterised by a determined push towards efficiency.
“Sales revenue was healthy, even if it didn’t reach the dizzy heights of the same period last year. But our data shows that purchasing and lead times were both down quarter on quarter, a sign of weakened demand reflected in the contracted PMI for this period.”
He added: “This, along with ongoing cost pressures, prompted fashion manufacturers to act. They’ve moved from cautious ‘just in case’ stock building in Q2 to a leaner ‘just in time’ approach, cutting their margins and stock on hand to protect their margins and cash flow.”
Looking ahead, Llewellyn added that “operational excellence” would be key to succeeding in a low-growth, high-cost environment.
“Going into 2026, fashion manufacturers will need to make the most of data to enable forecast-driven replenishment, track landed costs in real-time, and identify and convert excess stock into cash. Doing more with less is the new reality, seen in the continued trend in industrial automation.”
