Drapers talks to key players in the UK knitting industry to see how they are faring in light of the Made in Britain trend and the moves towards both more heavily designed luxury knits but also fast fashion.
Simon Cotton, chief executive of Johnstons of Elgin
Number of own-label stockists: 250 in the UK and 300 globally
Private label clients: Understood to include Burberry, Chanel and Hermès
Located: Elgin and Hawick, Scotland
Turnover: £59.3m in 2014, £52.3m in 2013
The UK has always had a really good reputation for cashmere, quality and the finishing of garments. That’s a position we should and could defend.
It’s fantastic that we can say Made in the UK and consumers immediately understand what this means for quality, feel and durability. However, that’s not enough and absolutely everything we do must be able to compete with the very best in the world. We must be willing to compete with the Italians on design and detail. A high quality product is not, on its own, enough. We have recently purchased a new fine gauge whole garment machine which allows us to work seamlessly and offer a greater level of refinement, developing new silhouettes and structures.
Over many decades profitability hasn’t been huge in some sectors of the knitting industry, so not much investment in equipment and training has been possible. That needs to be addressed. Manufacturers need to offer more apprenticeships and it’s down to people like us. We opened a training school last year and have had six apprentices go through and are now advertising for six more. We are using retired staff to conduct the training, which is great because it keeps our core team available for production. The extent to which there will be growth in the knitwear industry is dependent on whether we can build and replenish skills.
We are continuing to develop our eponymous own-brand, cashmere is still very much in demand and we expect that to grow in the business. Approximately 90% of knitwear is cashmere and 65% of accessories. I am very positive about how things look for cashmere knitwear, particularly accessories such as ponchos and wraps. There’s an opportunity there.
Own brand represents around 25% of turnover and we are moving towards higher-end products with an increasing proportion of our products in the £300 to £500 retail price range. Wholesale prices range from £20 for a merino scarf to £250 for a cashmere cable sweater.
Adam Mansell, director of special projects at UK Fashion & Textile Association
Overall the knitting industry is quite buoyant and we have fantastic companies producing high-end knitwear for London Fashion Week designers such as Albion Knitting and others like Lee Ann Fashion supplying knitwear for major high street retailers.
But it’s not all rosy. Around the East Midlands there are still a minority of companies whose reputation is not the highest and there are allegations that they are paying people off book. There’s a bit of an image problem with some of the mass manufacturing businesses and several UK retailers have blacklisted UK manufacturers because of the way they have paid their staff. The Ethical Trading Initiative is looking at ways to instil best practice and there are also initiatives to upskill the industry to overcome these negative aspects.
Bhavik Master, director at Jack Masters
Number of own-label stockists: 5
Private label clients: 15 clients
Turnover: £1.5m in both 2014 and 2013
We had to look long and hard about where to invest for the future and now we have a long-term commitment to our main own-label, Paul James Knitwear, to show people what we are about as a manufacturer, raise our profile and attract brands for future contract manufacturing. By developing the 100-piece collection as a timeless brand we are now attracting customers from across Europe and the Far East. Jumpers wholesale at £20 to £35.
The model for fashion now is small runs, which are quite intensive for our design departments. For us to justify investment into our factory we need repeat orders or high volume lines running throughout the year so we can then invest in fast fashion pieces that retailers want. We are now moving away from fast fashion towards in-season so currently around 60% of our business is fast fashion and 40% seasonal business. In 2010 this was 80% and 20% respectively.
Our other own brand, British Christmas Jumpers, shows how British manufacturers can react quickly to trends and get rapidly to market. We saw the trend for Christmas jumpers coming in 2012, so we created 12 designs and put them on Amazon that Christmas, running it as a real-time production brand. This brand now has 32 styles and represents 25% of our company’s turnover.
The bad image of some elements of our industry has a huge impact on us as you get branded by your location. It initially holds you back but it can be an advantage if you can stand out from the crowd. By investing in own-brands we can speak to buyers and show them how we have differentiated ourselves from the competition.
Arthur Rennie, brand director at Hawick Knitwear
Number of own-label stockists: 500 globally
Private label clients: Premium global retailers
Located: Hawick, Scotland
Staff: More than 200
Turnover: £8.5m in 2014/15 and £9.1m in 2013/14
We’re experiencing a lower level of demand for contract manufacturing and that’s why we had to let go 12 people earlier in the year. Some of our smaller private label contracts decided to move back off shore, but most of the larger ones are still with us. We are seeing a downturn in contract customer demand for 15 gauge lambswool [knitted on a 15 gauge frame] as their market has currently turned away from it. Private label contract manufacturing is a difficult and volatile business to be in.
Surviving businesses are tending to take on more work rather than new manufacturers setting up. To set up a new business is a big capital spend and the seasonality of knitwear means you have to fund your production for up to three-quarters of the year. For a new venture that’s not massively attractive for investors. We sell a British wool jumper for £35 wholesale and a British wool arran cable jumper for £49.
We need to be more vocal in our Made in Britain declaration to promote ourselves and differentiate ourselves from the British heritage brands with Union Jacks on them where only a tiny part is British made. That’s really bad for us, as customers think they are buying Made in Britain product and when it falls short of expectations UK manufacturing loses that sale and risks losing the customer longer term.
We need to have a recognised, monitored and promoted mark where customers are educated to know if it has this mark it’s absolutely made in the UK, regardless of branding. Probably the manufacturers themselves and the Make it British organisation should lead this. The government should also enforce a country of origin declaration on imports so it’s clear when they are not made in the UK.
For the 75-piece Hawick Knitwear own brand we want to develop sales in Europe, particularly in Benelux and Germany, and we are starting to develop Japan and seeking distribution partners in the US. We are expecting to double branded sales in the next two years, by adding another 200 stockists.
Chris Bowley, owner and director of HO Bowley
Private label clients: Asos.com, NHS, boutique designers
Located: Loughborough and Nottingham
Staff: About 25
Turnover: around £650,000 in 2014 and £450,000 in 2013.
Knitted fabric that used to come in from India and China was very poor quality but they have now upped their game so UK knitters have had to start looking for niche technical fabrics to carry on. Over the past 10 years we have diversified and moved into technical knitted fabrics for organisations such as the NHS, smaller clothing designers and the automotive industry. Around 40% of our knitting is for clothing, including fashion-led incontinence wear and specialist gowns for the NHS. We had to go this way because the market has been suffocated by imports. We were founded in 1863 but despite our heritage there was no way we could have survived otherwise.
The government should introduce a cap on imports of some fabrics and garments. A lot of companies are struggling because we are competing on price with imports which are quite good now but have lower labour and factory costs. More tradeshow support is also need as it’s very costly to go out to the Chinese shows if you’re a smaller business.
But things seem rosier. We are looking to expand and will employ five to 10 more people and invest in bigger premises in the next two years. The banks are now also willing to lend more, which is needed to invest and expand.
Ian Maclean, managing director of John Smedley
Stockists: 200 in the UK and 500 globally
Located: Lea Mills, Derbyshire and Armthorpe, near Doncaster
Turnover: £17.4m in 2014, £15.2m in 2013
The underlying economics with consumers are getting stronger but the warm autumn last year gave us a bit of a knock and the effect of that will last right through to this Christmas as buyers remain nervous.
For older companies like us we have to renew knitting machines and infrastructure and that’s very costly particularly when sales are undermined by overseas competition. It’s a big struggle. For smaller start-ups it’s costly to buy machinery. The government is helping through the Regional Growth Fund but could do more.
The really big blockage to growth in knitting is the retailers. Newly trained buyers have only really worked with the Far East, so there’s a big gulf between buyers and manufacturers here. Buyers need to invest time and effort and not just look for the lowest price and renegotiate terms every season. If they are real visionaries they could start their own manufacturing in Britain. Until this happens people will really struggle to set up here. No manufacturer can invest if they know the terms will go down next season.
London Fashion Week has just accepted us onto the schedule for September and in the next 12 months we want to open a second store in London’s West End in a location such as Regent Street, Piccadilly or St James to complement our existing Brook Street store. Wholesale prices range from £20 for knitted accessories to £95 for cashmere jumpers.