UK Fashion Firms Stock Up for Golden Quarter Amidst Shipping Delays

In a strategic move designed to navigate the challenges of the upcoming Golden Quarter, UK fashion manufacturers are proactively increasing their stock levels. This tactical decision comes in response to persistent shipping delays and a growing demand for goods, with firms aiming to ensure continued product availability and maintain high service standards for consumers.

Manufacturers of clothing, footwear, and accessories are engaging in significant stock-piling, a direct consequence of extended lead times. According to a recent quarterly report by inventory management software platform Unleashed, lead times notably rose by 13 days between Q1 and Q2. This increase saw the average lead time jump from 19 days to 32 days quarter-on-quarter, necessitating a more robust inventory approach to mitigate potential disruptions.

The Unleashed report, which compiles data from over 600 UK firms, also sheds light on the performance of small- and mid-sized businesses. These firms generated an impressive £480,000 in sales during Q2 2025, marking a substantial 109.28% increase compared to the same period last year. However, this figure also represents an 18.9% dip from the preceding Q1 period. Concurrently, the number of purchase orders (POs) saw a significant jump of 37.85% year-on-year, with a notable increase quarter-on-quarter.

While the surge in purchasing reflects a strategic build-up of inventory, it has also led to an increase in the value of excess stock. The report highlights that the value of excess stock more than tripled quarter-on-quarter, rising from £24,920 to £88,371. This expansive inventory strategy has had a marginal impact on profitability, with Gross Margin Percentage (excluding wages) experiencing a slight drop of 4.37 percentage points quarter-on-quarter and 2 percentage points year-on-year.

Joe Llewellyn, GM of ERP Small Business at The Access Group, Unleashed’s parent company, commented on this trend, describing it as "cautious buffering." He explained that this measured response is designed to help firms weather any further supply chain challenges in the coming months, particularly in anticipation of peak retail events like Black Friday and Christmas. Llewellyn emphasised that this is not a knee-jerk reaction but a well-considered, data-driven strategy, as manufacturers leverage improved forecasting capabilities to reduce risks associated with stock purchasing decisions.

Looking ahead, Llewellyn expressed optimism for the fashion manufacturing sector, predicting a strong finish to 2025. He pointed to healthy sales figures and a steady rise in business confidence throughout the year. Additionally, the recent cut in interest rates by the Bank of England from 4.25% to 4%, alongside expectations for inflation to fall below the 2% target, are positive indicators. These combined factors, Llewellyn believes, could pave the way for margin recovery and foster selective growth across the industry.