Sustained economic recovery has boosted demand, but wholesale bypass will threaten revenue growth
New York, NY (PRWEB) October 07, 2014
Downstream retailers are expected to put more price pressure on industry operators to prevent demand from falling due to changes in relative product prices resulting from exchange rate movements. For this reason, industry research firm IBISWorld has added a report on the Clothing and Clothing Accessories Wholesaling industry to its growing industry report collection.
Operators in the Clothing and Clothing Accessories Wholesaling industry have barely managed to stay afloat over the past five years. Exchange rate volatility, fluctuations in the price of cotton and increasing wholesale bypass have negatively impacted revenue. Despite these challenges, sustained economic recovery and availability of credit has kept downstream demand from falling, resulting in an anticipated increase in industry revenue over the five years to 2014. Revenue is expected to increase over 2014 alone, due to improving consumer sentiment and improved demand from women's clothing stores.
This industry comprises four different business segments: men's and boys' clothing wholesaling, women's and girls' clothing wholesaling, children's and infants' clothing wholesaling and accessories wholesaling. According to IBISWorld Industry Analyst Zeeshan Haider, “downstream demand from men's and women's clothing stores is anticipated to increase over the five years to 2014, while demand from children's and infants' clothing stores in expected to decline over the same period.” Additionally, demand from department stores is expected to decline over the five years to 2014, while a surge in the popularity of costume jewellery will likely increase demand for clothing accessories, such as matching hats, gloves, scarves and belts.
“Profit margins for this industry have remained volatile over the past five years,” says Haider. Changes in the price of cotton, which can result in massive fluctuations in purchasing costs, coupled with a downward trending exchange rate, has put downward pressure on the industry's profit margins, resulting in cost-cutting initiatives such as an increasing reliance on technology.
Over the next five years, the business environment for this industry is expected to become harsher. An anticipated depreciation of the Canadian dollar is expected to increase costs for industry operators, as most of the apparel and accessories they sell are sourced from low-cost economies. Additionally, downstream retailers are expected to put more price pressure on industry operators to prevent demand from falling due to changes in relative product prices resulting from exchange rate movements. To preserve margins, many retailers are expected to cut out intermediaries from the supply chain altogether. Thus, IBISWorld expects industry revenue to decline over the five years to 2019.
For more information, visit IBISWorld’s Clothing and Clothing Accessories Wholesaling in Canada industry report page.
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IBISWorld industry Report Key Topics
The Clothing and Clothing Accessories Wholesaling industry purchases men's and women's clothing and clothing accessories from apparel manufacturers and sell these products to retailers, generally with minimal or no further product development. Most wholesalers in this industry undertake sales and administrative activities such as establishing relationships with manufacturers and retailers, marketing and advertising their products, and storing and transporting stock.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US and Canadian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.