UK fashion manufacturers sales surged in Q1, but profits fell – report

UK fashion manufacturers enjoyed a “remarkable” sales performance in the opening quarter of 2025 “flying in the face of low business confidence among SMEs”.

New figures show the average small-to-medium UK clothing and fashion manufacturer made 68% more sales revenue in Q1 than Q4 2024, and 171% more year-on-year, according to The Access Group. 

The findings, based on direct data from over 600 UK firms and processed by Access’s Unleashed software, shows that across all of the 12 manufacturing categories analysed, sales were up 30% in Q1 2025 compared to Q4 2024 – and 13% year-on-year. 

However Unleashed’s data also showed Q1 profitability dropped compared to last year. Gross Margin Return on Inventory (GMROI) for the average clothing manufacturer declined 53% against Q4 and by 36% year-on-year to £4.14 return for every pound spent on buying stock.

Lead times fell to 19 days on average, which offers some reassurances, noting “faster delivery times allow businesses to reorder in smaller quantities, which is a more cost-efficient way to generate sales that improves margins”.

Joe Llewellyn, GM of ERP Small Business at The Access Group, said: “Unusual business conditions of the first three months of the year had generally played out well for the country’s smaller producers, as had falling bank rates.

“Anecdotally, what we’re hearing from some of our customers is that Q1 brought welcome windfalls. Some tariff-affected international customers have turned to UK firms to do business, while others raced to order more before tariff pauses came off. That’s delivered a shot in the arm for some firms, but more importantly we’re hearing that steadily falling bank rates are starting to stimulate the economy, which obviously is very welcome to UK manufacturers who’ve posted a really strong start to the year.”