Unleashed unveiled a report that draws on data from more than 600 UK firms, using its inventory management software, covering manufacturing categories including clothing and fashion.
Clothing, footwear and accessories sector “moved quickly” to safeguard their margins in the reported quarter, explained Joe Llewellyn, GM of ERP small business at The Access Group, the parent company of Unleashed.
Llewellyn added: “The last quarter was characterised by a determined push towards efficiency.”
Sales revenue recovered in Q3 2025, as small and medium-sized firms recorded an average of £500,517.
This represents an increase of 4.3% compared to the second quarter of 2025 and a 4.4% decline compared to Q3 2024.
Profitability, measured by Gross Margin Percentage (GMP), decreased by 2.5 percentage points from the previous quarter, alongside declines in lead times, purchasing volumes, and the value of stock on hand.
Lead times shortened from 32 to 22 days, representing a 31% quarter-on-quarter reduction. Purchase orders fell by 56%, and stock on hand value dropped by 33.5%.
“Sales revenue was healthy, even if it didn’t reach the dizzy heights of the same period last year. But our data shows that purchasing and lead times were both down quarter on quarter, a sign of weakened demand reflected in the contracted PMI for this period. This, along with ongoing cost pressures, prompted fashion manufacturers to act. They’ve moved from cautious ‘Just in case’ stock building in Q2 to a leaner just in time approach, cutting their margins and stock on hand to protect their margins and cash flow,” said Llewellyn.
He also highlighted the importance of operational strategies for the future: “Going into 2026, fashion manufacturers will need to make the most of data to enable forecast-driven replenishment, track landed costs in real-time, and identify and convert excess stock into cash. Doing more with less is the new reality, seen in the continued trend in industrial automation.”
The report found similar trends across other manufacturing categories tracked by Unleashed.
Across all sectors analysed, firms recorded a 12.9% quarter-on-quarter increase in sales alongside a 1.3 percentage point rise in GMP to 39.66%.
At the same time, there were declines in purchase orders by 30%, stock on hand by 27.2%, and lead times were reduced by eight days.
“UK fashion manufacturers recover margins ahead of 2026” was originally created and published by Just Style, a GlobalData owned brand.
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