This industry is heavily dependent upon demand from clothing and footwear retailers
London, United Kingdom (PRWEB) May 15, 2012
The Clothing and Footwear Wholesaling industry experienced a convergence of factors in recent years, which negatively affected revenue growth. According to IBISWorld industry analyst Kiera Outlaw, “the industry is heavily dependent upon demand from clothing and footwear retailers and downstream demand from the industry's major markets has weakened in recent times”. Larger industry players are increasingly looking to boost profits and attract consumers by offering lower prices through bypassing wholesalers and creating greater vertical integration.
Outlaw adds, “the industry was hit hard by the financial crisis, which caused consumer spending in clothing and footwear retail stores to drop, heavily affecting demand for inventory”. Real personal disposable income and consumer confidence are major factors influencing consumer spending on clothing and footwear. Low interest rates, temporary cuts to the VAT and heavy discounting did little to entice customers back to retail stores between 2008 and 2009. From 2010 through 2011, the industry experienced some growth, which subsided after it received another hit in January 2011 as the government increased the VAT to 20%. As a result of the increase, revenue contracted significantly during 2011-12.
Over the five years through 2012-13 industry revenue is anticipated to decline at an annualised 2.2% to reach £10.6 billion. Revenue is expected to rise a modest 0.7% in 2012-13.
Over the five years through 2017-18, IBISWorld anticipates the industry will continue to face challenges in terms of overcoming wholesale bypass and subdued downstream demand, as overall economic growth remains sluggish. Industry revenue is expected to grow only marginally.
The Clothing & Footwear Wholesaling industry has a low level of market share concentration, with no major players. Industry players usually specialise in a certain type of stock, whether it be clothing or shoes, which means concentration is low. Although industry concentration remains low, trends across other wholesale industries suggest the industry may experience increased concentration levels in the future. Greater consolidation within the industry would allow companies to achieve greater economies of scale and to function more profitably.
For more information on the Clothing & Footwear Wholesaling industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
Clothing and footwear wholesalers purchase a wide range of clothing and footwear from domestic and foreign manufacturers and distribute the goods to downstream retailers. Most wholesalers in this industry do not undertake any alterations or further development of the goods.
Industry participants are involved in sales and administrative activities and ensure the reliable supply of stock, marketing and advertising of products and storage and transportation of goods.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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