The textile industry’s latest challenge: reducing inventories



During the coronavirus pandemic, the Scottish textile industry celebrated its resilience, but faces another obstacle in restocking stores that still have a backlog.

Companies such as Johnstons of Elgin and Hawico were well enough placed in an industry steeled by decades of reorganization to deal with the effect of the virus on both the manufacture and selling of high-end garments.

Company has been reduced to around 40 percent in the industry and is not expected to return to full capacity until 2022, in part because there is still inventory to sell in the closed shops. Yet sales at the open stores were promising from a retail perspective.

Simon Cotton, Johnstons of Elgin’s managing director, said the industry has worked hard to minimize the corona virus’ effects, but faces further challenges.

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“We’ve certainly seen declines and difficulties, but not to the extent I expected. I think the reason is that the sector is incredibly resilient now.”We certainly saw declines and difficulties, but not to the extent that I expected. I assume the reason is that the industry is now incredibly resilient.

He added, “Companies have ownership structures that generally help with that, so they’re not borrowing big, they have good balance sheets.”

The industry had been on the rise until last year, Mr. Cotton said.

“Of course, it’s not without its challenges, given that obviously we have Covid, we have the Boeing aircraft tariffs on knitwear over a year at 25 percent , and then we have the elimination of the sales tax holiday on Jan. 1.”

He said that, in paving the way for potential investment, Westminster and Holyrood have a long-term role to play.

“Any manufacturing industry, but especially the textile industry, needs to continually invest to stay ahead of technology and international competition,” he said. The danger is that investment potential would be limited by balance sheet constraints, so my main request to policymakers will be to raise investment funding.

Yeah, we’re going to get through it, but if we don’t spend, we’re going to see real losses in 10 or 15 years’ time. Therefore, funding to promote and enable investment is the major question there.

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This is an export market, so many businesses are also used to working on a third-party basis with purchasers in other countries.

“many companies are facing about a 40 percent drop in demand this year and expect demand to still be significantly depressed next year as retailers still need to work through inventories.”

“We see that we will likely reach 2019 levels by 2022,” Mr. Cotton said. The big challenge that is going to hold us back is inventory.

There will be elements where we are not sure what will happen. The decision to remove VAT-free shopping means that foreign tourists to the UK will be less likely to purchase luxury garments because Asian travelers will shop in Paris rather than the United Kingdom more much on a tour of Europe because they know they will not collect VAT here, but they can in Paris.’

His remarks were echoed by Ewan Thomson of Hawico.

“As with all businesses, it’s been an incredibly challenging year for us,” Mr. Thomson said. Last year [2019] was a perfect year, we were set for [2020], then it all tipped over obviously.

“From our perspective, there are two sides, the retail side and then the manufacturing side here in Hawick.”

“practicality is good, but you have a double whammy when these kinds of things happen.”practicality is good, but when these sorts of things happen, you have a double whammy.

We essentially shut things down, mothballed them for a while, and then gradually ramped them back up,” he said. “Things looked a little better by the time we got to the middle of the year, particularly our European stores – the Swiss and German stores had reopened and were actually doing pretty well.

We developed an online company that eventually forced us to go online, and that’s been going pretty well, especially in the last two months.

We supply not only the stores at the mill, but also a range of wholesale suppliers in America and Asia, as well as h


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