Fashion
UK fashion sector posts QoQ revenue lift as market recovery builds
Despite improved sales performance, profitability slipped slightly, with gross margin percentage (GMP) falling to 60.4 per cent—down 2.5 percentage points (pp) QoQ and 1.7 points YoY. The decline reflects reduced order volumes and ongoing pricing pressures across the supply chain, even as firms increased sales output.
The operational metrics revealed a decisive pivot towards efficiency. Lead times improved significantly, dropping from 32 days to 22 days QoQ—a reduction of 31 per cent. Meanwhile, purchase orders declined sharply by 56 per cent, while stock on hand fell by 33.5 per cent, suggesting firms are prioritising leaner inventory management to minimise risk and optimise working capital.
UK fashion manufacturers saw average Q3 2025 sales rise 4.3 per cent QoQ to £500,517 (~$670,693), though still 4.4 per cent lower YoY, according to Unleashed.
Gross margin percentage slipped to 60.4 per cent as firms reduced purchase orders and stock.
The shift towards leaner inventory reflects cost pressures and soft demand, with operational efficiency expected to be key heading into 2026.
Joe Llewellyn, GM of ERP Small Business at The Access Group, parent company of Unleashed, said the shift was deliberate and strategic.
“The last quarter was characterised by a determined push towards efficiency,” he noted. “Our data shows firms have moved from cautious ‘just in case’ stock building in Q2 to a leaner just-in-time strategy, cutting stock and purchasing activity to protect margins and cash flow.”
Llewellyn added that with the UK manufacturing PMI remaining in contraction through the period, firms responded pre-emptively to weaker demand signals and sustained cost pressures.
“Operational excellence will be increasingly important going into 2026,” he added. “Manufacturers will need real-time visibility of landed costs, improved forecasting, and the ability to convert excess stock into cash. Doing more with less is now the reality.”
The broader manufacturing landscape reflected similar patterns. Firms recorded a 12.9 per cent QoQ rise in sales and a 1.3 percentage point uplift in Gross Margin Percentage (GMP) to 39.66 per cent. Purchase orders fell by 30 per cent, stock on hand dropped 27.2 per cent, and lead times shortened by eight days, the report added.
With global demand stabilising but cost pressures likely to persist into next year, UK fashion manufacturers are expected to continue prioritising automation, inventory precision, and digital forecasting tools to remain resilient.
The figures signal a cautiously optimistic outlook: the industry appears better positioned than earlier in 2025, but sustained recovery will depend heavily on operational discipline, demand visibility, and navigating a still-volatile cost environment.
The report, based on data from more than 600 small and mid-sized firms, suggests manufacturers are entering 2026 on firmer footing as streamlined operations and improving sales help stabilise margins.
Fibre2Fashion News Desk (SG)
While rates initially jumped in early January, weak underlying demand and the potential return of vessels to the Suez Canal are creating a volatile environment for shippers, it noted.
Carriers pushed through general rate increases (GRIs) in early January this year, briefly lifting China-to-US West Coast rates above $3,000 per forty-foot equivalent unit (FEU). However, these hikes were largely unsustainable due to weak volumes, with rates quickly correcting to the $1,800-$2,200 range by mid-month, the logistics and supply chain market research firm said in an insights brief.
Asia’s ocean freight market is navigating short-term seasonal surges and long-term structural overcapacity, Ti said.
Asia’s air freight market is seeing a significant ‘post-peak’ correction following a record-breaking end to 2025.
Warehousing capacity in the Asia-Pacific is under severe strain in late January as manufacturing slows and labour shortages emerge ahead of the Lunar New Year.
Seasonal demand ahead of the Lunar New Year (starting mid-February 2026) has pushed North Europe rates to roughly $2,700 per FEU as of mid-January. This is a significant recovery from the October 2025 lows of $1,300 per FEU.
Despite a peak ahead of the holiday, Intra-Asia rates have begun to ‘cool’ in mid-January, settling at an average of $661 per 40-feet container as new services and capacity entered the market.
The Asian air freight market is witnessing a significant ‘post-peak’ correction following a record-breaking end to 2025. While rates have dropped sharply from their December highs, demand remains resilient in key high-tech sectors, and a ‘mini-peak’ is expected in late January ahead of the Lunar New Year.
Spot rates from major hubs like Hong Kong and Shanghai fell significantly in early January as year-end peak season demand evaporated.
Despite the rate correction, global air cargo tonnages jumped by 26 per cent in the first full week of January 2026 compared to the end-of-year slump, with the Asia-Pacific region seeing an 8 per cent year-on-year (YoY) increase in chargeable weight.
Volumes from Southeast Asia to the United States rose by 10 per cent YoY in early January, driven by importers continuing to diversify sourcing away from China.
Warehousing capacity in the Asia-Pacific is under severe strain in late January as manufacturing slows and labour shortages emerge ahead of the Lunar New Year.
India closed 2025 with 36.9 million sq ft of warehouse leasing (16-per cent YoY growth), a trend continuing into early 2026 with high demand in Delhi National Capital Region and Chennai.
After a period of oversupply, development pipelines are expected to drop by a third by 2027, making 2026 a critical ‘inflection point’ for occupiers to secure quality space before terms tighten again.
Fibre2Fashion (DS)
The goal, however, is challenging due to external pressures, including stricter technical barriers, reciprocal tariffs on goods exported to the United States, and the European Union’s Carbon Border Adjustment Mechanism (CBAM) for selected industrial products.
Therefore, major export industries in the country have started restructuring and adjusting strategies early in the year to seize market opportunities.
Following a record export value of $475 billion achieved in 2025—up by 17 per cent YoY—Vietnam aims at adding nearly $38 billion to the figure in 2026.
Major export industries in the country have begun restructuring and adjusting strategies early in the year to seize market opportunities.
The textile and garment sector, which earned $46 billion in 2025, has set a target of $50 billion in exports in 2026.
The textile and garment sector, which earned $46 billion in 2025, has set a target of $50 billion in exports in 2026.
The sector is focusing on strengthening domestic supply chains, raising localisation rates and making more effective use of free trade agreements (FTAs), Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association (VITAS), was cited as saying by a domestic media outlet.
Exports may grow by 15-16 per cent this year, driven by market expansion and a shift towards higher-value products, according to MB Securities’ Vietnam Outlook 2026 report.
Fibre2Fashion (DS)
The data showed that the decline was driven mainly by weaker domestic exports, with goods produced in the Netherlands down 8 per cent YoY. In contrast, re-exports to the US rose 3.9 per cent during the period. Exports to the US have fallen every month on a YoY basis since July, CBS said in a press release.
Trade flows were influenced by uncertainty around US import tariffs. In the first half of 2025, trade between the two countries continued to grow, possibly as companies advanced shipments ahead of announced tariff measures.
Goods exports from the Netherlands to the United States fell 4.7 per cent YoY to €27.5 billion (~$33 billion) in the first ten months of 2025, driven by an 8 per cent drop in domestic exports, according to CBS.
Re-exports rose 3.9 per cent, while tariff uncertainty weighed on trade.
Imports from the US increased 1.9 per cent to €48.1 billion (~$57.7 billion).
Meanwhile, imports from the United States rose 1.9 per cent YoY to €48.1 billion (~$57.7 billion) in the first ten months of 2025.
Fibre2Fashion News Desk (SG)
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