Rising cost of sourcing in Far East and heritage trend trigger huge increase in orders for British factories.
UK manufacturers are experiencing the green shoots of a renaissance as brands and retailers spurn overseas suppliers, deeming them costly and of poorer quality in relative terms.
The spiralling costs of freight and the labour shortage in territories such as China and India, as well as unreliable production quality and growing lead times, are closing the cost gap between UK and overseas manufacturers and making the UK manufacture of mid-market product a commercially viable option for the first time in more than 20 years.
N Brown-owned JD Williams Group has called for UK suppliers to work with the home-shopping giant to boost its UK manufacturing base. It will hold an open day to meet with UK suppliers at Leicester City Football Club on February 10.
Linda Quinn, trading director for womenswear at JD Williams, said: “We always had a small level of UK manufacturing, but the issues in the Far East forced us to explore options closer to home. The cost gap is closing. It is still significant, but [it’s a trade-off] against speed to market and how much we need to buy.”
Lead times on orders from the Far East and Indian subcontinent have grown as demand from domestic markets rises, rioting in countries such as Bangladesh disrupts production and freight capacity remains below demand.
An order from the Far East that would have typically taken about 15 weeks to deliver this time last year now takes 18 weeks. Lead times in the UK are between six and 10 weeks, depending on whether the fabric is sourced here or from overseas.
Despite the advantages of securing lower prices for high-volume orders with overseas manufacturers, retailers and brands using UK manufacturers on shorter lead times can take more risks on product, testing low volumes and amending designs in response to customer feedback and placing repeat orders in season - helping boost full price sell-throughs.
John Wilson, executive vice-president of manufacturing at footwear brand New Balance, which has a factory in Cumbria and which grew its UK manufacturing by 20% last year, said: “The ability to replenish stocks in season on short lead times is fast becoming an integral part of high street retailers’ survival kit, while the ‘Made in Britain’ cachet, coupled with product quality, has provided remarkable export successes.”
Pan Philippou, chief executive of lifestyle brand Ben Sherman, said: “I looked at manufacturing some items out of Portugal and, when they came through, the cost was so [high] I may as well have made them in the UK.”
The return to the UK has also been helped by the trend for heritage styles, and the need for retailers to offer premium details on product in order to justify price hikes.
Fabrics supplier Harris Tweed Hebrides increased turnover 50% last year, partly thanks to demand from UK retailers and brands including its Topshop collaboration last year.
Its creative director Mark Hogarth said: “Companies that would not have wanted to pay more than £10 a metre for fabric are now willing to exceed that because of the perceived increase in value [which allows them to increase the retail price]. The difference between high street and designer [offers] has blurred.”
Henry Butler, production manager for premium menswear brand Nigel Cabourn, which sources all of its product in the UK, said: “It is still massively cheaper to manufacture in the Far East than the UK, in bulk and volume, but the trend for heritage has improved [the UK’s] position enormously. The Made in Britain label has a strong cachet now, especially in the US and Japan. Labels like Nigel Cabourn and Margaret Howell are enormous in Japan and a major part of that is the Made in Britain label.”
A production source said heritage brands such as Barbour and Hackett, which had shifted substantial amounts of their production overseas, were “sniffing around the UK again” and had already upped their orders with some UK factories.
Many supply businesses that have contracted over the past decade are at their production capacity as a result of renewed demand, and are recruiting additional staff.
Cashmere specialist Todd & Duncan is back in profit and is to increase its 200-strong staff by 10% this year. Hawick Knitwear, another cashmere specialist, wants to up its 200-strong workforce by a similar percentage.
The major issue will be whether UK garment manufacturing will be able to cope with increased demand.
Kent shirtmaker Rayner & Sturges trebled its revenues in 2010 and grew its staff from 65 to 135. It aims to have 260 staff by the end of this year, although owner Boyd Bowman said he could not recruit quickly enough.
“We keep adding staff,” he said. “It’s not a problem getting orders, it’s getting people to make them. There are no crafts anymore. Kids today want to go into IT and retail. We advertise weekly and just hope some of the people who were working 25 years ago [when manufacturing went offshore] will come back.
Case study: rapid growth for LS Manufacturing
LS Manufacturing, based in Wolverhampton, operates in the Far East and Portugal as well as the UK, but has seen rapid growth in its UK division over the past 18 months.
In the year to August 2010, the UK business - which makes product for high-end brands and retailers - turned over about £2m, but is projecting a 33% increase to £3.1m in the current financial year. Profits are also expected to rise.
Managing director Daljit Meehat said he receives up to three enquiries a week from UK brands and retailers. “It’s driven by costs. If you have an order for 1,000 garments, you might get fantastic prices in the Far East, but when you factor in administration costs, and the cost and delay of shipping, it stops being so attractive.”
In the past 18 months the UK business has gone from employing 50 machinists to 140 machinists, and wants to recruit another 25 in the next three months.
Average growth in orders at one UK manufacturer over the past 12 months
“People want to get their clothes produced in England. Retailers are going to come back because they are not happy with the quality from overseas.”
Maggie Apostolou, manager of clothing manufacturer Arenco in Leyton, east London
Number of people recruited by one UK manufacturer in the past 12 months
“I would recruit more but there are no apprenticeships which teach true manufacturing skills.”
Mark Purcell, manager of supplier Yusuf Menswear in Birmingham
Average growth predicted for the next 12 months at one UK manufacturer
“We’re growing… we’ve increased our customer base dramatically.”
Tony McNulty, managing director of ATF Textiles, Stafford
Minimum pay per annum for a textile worker in China
SOURCE: Drapers’ straw poll of UK manufacturers
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