UK fashion manufacturers are actively increasing inventory in UK fashion to handle prolonged shipping delays and meet rising consumer demand as they approach the final quarter of the year, according to a report from inventory management software provider Unleashed.
The Q2 2025 report utilizes data from over 600 UK-based companies across various sectors, including food and beverage, clothing, and construction.
Findings indicate that businesses in clothing, footwear, and accessories are stockpiling their inventories. This strategy aims to ensure consistent product availability and uphold service standards amid longer lead times, which have risen by an average of 13 days from the first to the second quarter.
Small to medium-sized enterprises reported sales totaling £479,943 during Q2 2025, marking a 109.3% increase compared to the same period last year; however, this reflects an 18.9% decline from Q1 2025.
Alongside the surge in procurement, the value of surplus inventory has dramatically increased, tripling from £24,920 ($33,679) to £88,371 quarter-over-quarter.
The gross margin percentage (excluding wages), a key profitability measure, experienced a slight decline, decreasing by 4.37 percentage points from the previous quarter and 2 percentage points from the previous year.
The report also highlighted a significant rise in lead times, with averages increasing from 19 to 32 days quarter-over-quarter. Additionally, the quarterly number of purchase orders surged by 37.85%, climbing from 313 to 488.
Joe Llewellyn, GM of ERP Small Business at The Access Group, which owns Unleashed, remarked: “The increase in purchase orders and stock levels signifies a strategic shift for fashion manufacturers, with increasing inventory in UK fashion aimed at mitigating the risks of delays and stock shortages as we approach Black Friday and Christmas.”
He continued, “This shift isn’t merely a reflexive response to market conditions; it represents a calculated approach. As manufacturers become more data-driven, they enhance their forecasting capabilities, thus minimizing the risks linked to inventory purchasing decisions.”
Looking ahead, Llewellyn expressed optimism regarding the end of 2025 for manufacturers, citing robust sales and a consistent rise in business confidence observed each quarter this year. Furthermore, the Bank of England has lowered interest rates from 4.25% to 4%, with inflation projected to decrease below the 2% target. Collectively, these factors may assist in margin recovery and selective growth opportunities, reinforcing the trend of increasing inventory in UK fashion.
