The figure from the report represents an average ‘overstock position’ for all UK clothing, footwear, and accessories manufacturers—the difference in value between optimum stock levels for each product, versus the actual value of stock held. The UK average across all manufacturing businesses was £102,000, according to the Cash Flow and Overstock report by inventory management software provider Unleashed.
UK clothing, footwear, and accessories manufacturers are heavily overstocked, but could benefit from an average cash windfall of £86,223 as they recover from last year’s overstocking crisis.
Around 381,000 products were stocked by over 1,800 firms across various countries including the UK.
The UK average across all manufacturing businesses was £102,000.
Jarrod Adam, head of product at Unleashed, said: “Firms last year were forced to stockpile in response to supply chain shocks. But that’s had serious cash flow impacts. Now the challenge for many is freeing up cash flow as economic conditions tighten—and the good news is the money is there, when you look closely at the numbers.”
The Cash Flow and Overstock report, by inventory management software provider Unleashed, analysed 381,000 products, ingredients, and components stocked by over 1,800 firms across the UK, North America, Australia, and New Zealand.
Commenting on the figures, Phil Oakley, MD of systems integration specialists Outserve, said: “I think it will vary, from business to business, and those with quicker stock turnover will realise the cash quicker. So, they could make small changes to their purchasing cycle where they’re only a month or two ahead of themselves, giving themselves a bit of a breather to get their stock at the right limits rather than over-stocking. Having that right limit just allows them to slow down their purchasing. So, within a month or two they could see that cash staying in their bank account rather than going out.
“If you’re on a longer cycle and you’ve got more in stock, then it’s going to take a bit longer for you to benefit. But there may be other benefits that you can look at, like selling some of the items that you’re overstocking, even if it’s not quite the margin you’d like, it’s getting cash back into the business. It’s freeing up warehouse space.”
Fibre2Fashion News Desk (NB)
