way will economy go?
We are receiving mixed signals on the economy for 2012. For the
first time in the last decade it is virtually impossible to call.
A colleague attended a trade show in the U.S. and he came back
with the news that a considerable number of U.S. companies were
looking to expand into the U.K. this year.
On the fashion logistics front, which represents 70% of RFT’s
business, the picture was even more confusing; RFT’s European
clients, who exhibited during London Fashion week, reported that
it was ‘hard’, particularly those from France, Belgium
and Italy, while the German exhibitors said it was ‘so-so’.
Not a very good response for top end designer fashions. The U.K.companies
we took to exhibit in Paris recorded a better response.
What was surprising, the U.K. companies we took to the N.E.C.
about the same time as Fashion Week, their response was ‘Great’
‘Fantastic’. These companies were selling mid range
outdoor and sports clothes, and exhibiting in non fashion shows.
Imports from China have held up, with increased shipments from
Eastern Europe. On the retail side, large retailers are taking
less from their suppliers than we would normally see at this time
of the year. Retailers importing from China and Eastern Europe,
have to order and pay for the stock in advance, this is then warehoused
and delivered on a ‘Just in Time Basis.’ If sales
are slower than anticipated, storage charges impact more and more
on profitability as the year progresses. Look forward to deep
discounting, as the British Public are still holding back on purchases.
Generally speaking U.K. designers and manufacturers are holding
their share of the market, while imports from Europe are slowing
Smaller multiples able to re-act quicker have reduced prices and
increased stock levels. Competition on the high street is going
to get hotter during the following months.
The first quarter of the year has always been RFT’s busiest
time, with most of the new contracts starting during the first
quarter. Two clients of ours have secured new contracts for one
of the largest fast food outlets in the U.K. One for uniforms,
the other for packaging. We have numerous smaller clients who
have ignored the downturn in the economy, and have won contracts
against fierce competition world wide.
It is going to be an interesting year this year, with a lot of
the large multinationals trying to re-invent themselves, and regain
market share. Cutting costs and quality hasn’t achieved
anything, innovation is the way forward.
Tags:UK Economy Hard to Call :Is UK in Recession? :ConDems Smash Record :
What a Tragedy :Millions in Poverty :Google Changes :Will
the Euro collapse
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