Everyone is buying British

Press, 14 March 1985, Page 8

Everyone is buying British

British wool exports are booming, but its textile budget moves increasingly into deficit. ANGUS STEWART reports on the good and the worrying signs for British manufacturers.

further 20 per cent goes abroad in clothing form.

The better known and respected British garment manufacturers, Burberry, Acquascutum, Jaeger, and Daks, use British cloth, and a major part of their profit comes from sales abroad.

Directly and indirectly

wool manufacturers rely on export demand. While the dollar remains strong in relation to sterling manufacturers will stay confident. Although aware that they are. trading on a financial quirk, the British minimise the dangers inherent if the dollar should fall.

British cloth, much in demand because of its quality and traditional high standing, is sold in competition with fabric of equal repute from Italy, yet to date little effort is made to sell with the vigour or flair of the Italians.

Nevertheless, in the first eight months of 1984 Australia and New Zealand doubled the square metres they bought, compared with the same period in 1983. In total British wool textile exports, comparing the same periods, have increased in value by 26 per cent, to £354.2M. In spite of the increase in wool-earned revenue there is no sign of any increasing investment in marketing. It is true to say that the British produce very desirable woollen cloth, but the customer has to search for it. It is not presented to potential buyers with either aggression or imagination. While enjoying the British style of selling as an antique virtue, the Japanese are now demanding that British selling is linked with that of Italy. British optimism must also be seen against the fall in mill fibre consumption, a reduction of almost half since 1970. Italy on the other hand has increased her consumption by 70 per cent.

As a result, it is estimated that Italy now provides half the United Kingdom’s requirement of woollen cloth. Britain’s market has not been penetrated by a low-labour-cost country. Textile hourly wage and social security costs in Italy total £8.74, while in Britain they are £5.42.

Despite this tale of woe, British financiers are in agreement with the G.A.T.T. secretariat which considers that “flexible, innovative, and well-managed companies in the developed countries have a good chance to survive and expand, in the face of competition from developing countries.” Italy certainly justifies this belief, as does the current British boom.

Britain, in spite of its growing number of unemployed is enjoying a retail boom. The increasingly favourable treatment given by the Government to those with capital, and in employment, has created a substantial segment of the population little concerned with needs, well able to satisfy their wants. They, and the tourists, particularly the Americans, find the retail prices affordable.

This leads to distorted retail figures. Stores which cater to the well off have

higher turnovers than those who service the less well off and poor. If the moneyed spend enough they cover, in accounting terms, the loss of revenue which results from sales not made to those who cannot purchase. The overall retail figures hide the visible fact that while there is a boom for some, others are in a disaster.

Retailers expect that expensive stores and shops that cater to the employed will continue to do well. Consequently they will be continuously reinvigorating their merchandise, particularly clothing. Fashion, in terms of colour, cloth, and co-ordination is now spinning in ever faster circles. Two years ago the up-to-the-minute merchandise could be ordered, manufactured, and transported from Hong Kong. Now buyers are finding that working abroad, even with countries as near as Italy, is becoming too complex and time-consuming. British buyers are looking for cloth and garment manufacturers on their own doorstep. Undoubtedly, manufacturers who respond will find themselves profiting against the overall tide of decline.

Investment agencies, happy in the increasing