The cotton crisis has affected every textile sector from clothing manufacture to laundry and textile rental services. Even the corporate clothing, workwear and PPE industry, worth approximately £450million in the UK, is not exempt from the effects.
Workwear buyers have plenty of choice but cost has become increasingly important.
Even though the price seems to be settling it is doing so at a record high that still threatens the UK’s commercial laundry sector and severely affects the operational costs of the big customers for workwear rental and laundering services. The TSA’s latest data on raw cotton prices indicates that the workwear sector still faces tough times.
Several industrial workwear suppliers have told LCN that, over June, the market was volatile with manufacturers reporting pressure on production, increased minimum runs and longer lead times.
Several brands registered price increases at the beginning of April. In the main rises appeared to be
5 – 10% and focussed on
cotton-based products.
Chris Wood of Incorporatewear says cotton prices have continued to rise as they have done over the last year but he expects some stability by mid-2011. The Coleshill-based company, whose customers include Virgin Atlantic, HSBC and Beaverbrooks, saw its turnover increase year-on-year despite
rising commodity prices
and industry costs.
Wood says: “Our latest results demonstrate that we are adapting successfully to global economic pressures, particularly from the Far East, where we have experienced rising labour and material costs.”
Given poor harvests across the globe and flooding earlier in the year in Pakistan, he expects upward pressure to continue.
Recent steep price increases have forced a reality check for many garment buyers, says John Oates, brand manager at Johnsons Apparelmaster. He explains that unreliable supply is potentially more damaging than a price hike, especially where the correct clothing is a pre-requisite for doing a particular job.
Companies that are financially robust, have well-established supply lines and can forecast requirements tend to overcome problems better than those that have shifted their purchases between low-cost countries for short term gain.
“Offshore sourcing may appear attractive when things go well, but when problems occur on the scale we have seen in the past
18 months, it is sensible to turn to companies that supply garments as their core business,” Oates adds.
He sees definite signs that companies that haven’t used workwear rental are now turning to this service. However, the hospitality industry is suffering a reduction in demand, which is making life more challenging for companies serving that sector.
Dominic Green, Denny’s Uniforms’ sales director, says that as a wholesaler and manufacturer the company suffers on both counts. Its margins are realistic and the pricing structure has always been competitive but the global economy affects both manufacturing and retail sectors.
Steve Clarke is the managing director of the Brilliant Group, which brings together independent regional laundries and linen/garment rental companies to provide a national UK service.
He says that the UK market has been highly volatile. The whole supply chain has been hit, leading to price hikes – as much as 300% in some cases.
Clarke explains that Brilliant has been working with the TSA to resolve these problems. Along with others in the industry, the group is talking to customers about ways to maintain service and quality whilst accommodating the price rises. “This is all happening at a time when the workwear customer base is also having an extremely tough time,” says Clarke. He adds that the manufacturing side has seen signs of recovery over the past few months and this bodes well for the future.
He says that while the cotton crisis has not had the immediate impact on workwear rental that it had on pooled linen services to the hospitality sector, this will change when contracts come up for renewal and garment prices are 50% higher. Brilliant uses TSA’s cost index to explain the differentials.
Tibard makes and sells work uniforms and provides laundry and linen rental services. Its textile rental operation has a laundry in Manchester and a sub-contracted national network. Commercial director Rick Shonfeld says that the cotton price rise has been detrimental to the hospitality industry. The availability of raw fabrics and the need to increase the unit cost of garments have been serious concerns for Tibard and other manufacturers.
His company has tried hard to avoid passing on marginal increases at a time when purchasing managers and procurement teams want to make savings. However, from a commercial viewpoint prices have to rise for companies to stay viable.
“Many of our suppliers can no longer hold prices for 12 months and we are subject to monthly increases and de-stocking,”says Shonfeld. He believes that a cautious approach to trading is still prevalent. Many sectors face continued uncertainty. Regionally and nationally companies are closing weekly.
Tibard’s largest sector for uniforms and laundry services remains the hospitality sector. “People still need to eat and drink [while away from home] but unfortunately not at the same frequency we saw back in 2009,” says Shonfeld.
Many of Tibard’s customers have looked at cost cutting measures throughout their business including laundry and workwear services.
Shonfeld points out that hospitality customers want short lead times, competitively-priced apparel and continuity of supply. “As well as selling garments through our website and our sales team, we also have a laundry division,” he says. “This allows Tibard to offer nationwide services on chefswear and table and hotel linen. This business has increased steadily, organically and through new markets.”
Green at Denny’s Uniforms says that the tourism sector faces conditions that will leave sales growth flat and profits down. He feels the high VAT rate has been particularly detrimental, resulting in high food and drink prices. A lobby is needed to make Britain more competitive and attractive to overseas and domestic visitors.
Michael Tottman, sales director UK and Ireland at workwear manufacturer Mascot, reports an upturn in demand from the industrial sector. During the recession many companies reduced staff numbers and reduced or postponed their workwear spend.
Now staff turnover is more stable. Customers are becoming more discerning about their purchases and looking for longevity rather than a quick fix.
“In particular we have been approached by companies where hard-wearing, fit-for-purpose garments are an absolute imperative,” he adds.
Mascot has launched the
Industry Collection, which was developed through research with industrial laundries and end-users. This features garments with a canvas weave that combines a good appearance with breathability and comfort. All garments are tested to the standard for industrial wash processes, ISO15797 procedure 8B.
Tottman acknowledges that large FMCG (fast moving consumer goods) businesses purchase direct from the Far East but this requires large pre-sized orders that may not meet the needs of a transient workforce. He says that the fabric and construction may not withstand industrial washing so garments have to be washed at home. As a result, companies risk losing the corporate image that they strive so hard to achieve. Inferior products are being washed at different temperatures on different programs in different machines, resulting in a variety of shades and standards of finish.
Shonfeld at Tibard says there has been an increase in companies looking to source directly over the past couple of years but without a good knowledge of the industry, going through a supplier is the safest route. Tibard has a three tier approach to manufacturing, depending on the size of the order, the flexibility in lead time and the garments. The UK factory has proved invaluable in the recession as customers are ordering less. They are tweaking off-the-peg items with logos or a dash of colour, which can be done at Tibard’s head office.
Brilliant’s Clarke says direct sourcing only works on very large corporate contracts. Even then there are many pitfalls to overcome. Garment prices are so high that it is important they are made exactly to specification. For example if garments arrive from China and they have been made to the wrong spec, it is extremely hard to resolve the problem.
Clarke lists the four main customer requirements.
Flexibility: In uncertain times, customers need flexibility and a workwear contract should be able to allow this.
Value: A workwear rental service from an experienced provider is still the best value option for clothing a workforce. Improved technology allows a laundry and its customers to manage the stock and review the contract’s performance.
Reliability: Customers need to know that the laundry will deliver the right goods in the right quality at the right time.
Finally, Clarke says that sourcing good quality garments is fundamental to a successful rental contract. Brilliant has spent the last year launching its Kitchen Essentials range. All the garments can be processed through bespoke food hygiene processing factories, rather than an industrial workwear unit.
Oates at Johnson Apparelmaster agrees about the key requirements for workwear rental. The notion of “partnership” has become something of a cliché, he says, but to survive and prosper in current conditions does require a high degree of partnership between suppliers and end users.“
The company launched its Gryzko fully co-ordinated workwear range, designed to a high standard with new colours and fabrics. Additions are already in development and these will make Gryzko even more suitable for working environments.
In the heavy-duty specialist PPE/industrial workwear sector, demand appears to be stronger. PHS Besafe, the specialist in technical workwear and workwear laundry services, reports good demand from the manufacturing sector and from new and established customers.
National sales manager Paul Sharkey admits that, with fuel and cotton prices hitting peaks, changes have been inevitable. Customers are demanding higher specs and garments that comply fully with British Standards and with regulations.
Procurement departments are being advised of the pitfalls and hidden costs of purchasing cheaper products. Companies are again turning to Eastern European goods as carriage costs for those from China are becoming excessive and lead times are increasing.
PHS Besafe has launched three PPE clothing ranges: Bright Gear, Flame Gear and Arc Gear. PHS supports these with an expanded range of maintenance services, including the Premier Arc and Enviro Garment Removal, which offers secure removal of PPE which has become contaminated or non-compliant.
Anette Helleberg at textile manufacturer Klopman says that fabrics engineered for industrial washing continue to be a critical to the workwear/corporate wear market. Basic “commodity” fabrics continue to be widely used, but increasingly the end-user customer will consider added value features such as stretch, Fairtrade, organic cotton or recycled polyester. Quality and consistency will remain important for rental companies.
The past 12 months have seen significant disruption to supply, reflecting difficulties with the availability of fabric and with garment making capacity. Reliable supply has become a much valued element within the supply chain.
Green at Denny’s says there is a definite move to just-in-time delivery. The company operates a 24 hour stock call off with many thousands of core lines and has invested in warehousing and increased stock levels to meet the needs of the high volumes required by the laundry industry.
He warns that reducing garment quality is a false economy. Denny’s uses its expertise in sourcing and manufacturing garments to provide customers with workwear that will last longer. Green says that the high spec yarns and weaves used in garments meet the demands of the laundry industry. Denny’s has launched the AFD range of lightweight chefswear. AFD jackets, tunic and trousers contain Advansa Thermo Cool panels, using hollow fibres to improve air circulation and enhance evaporation.
Chefswear specialist Oliver Harvey has increased its sales month-on-month since its launch at Hotelympia 2010. Presenting itself as a “quintessentially British” brand, Oliver Harvey aims to offer discerning chefs high quality garments that are of 100% UK manufacture. The price reflects the standard of manufacture, yet is still affordable, says director Ian Mitchell.
The range, which took 18 months to develop, currently consists of five jackets, available in long and short sleeve styles, two styles of trousers and bib and waist aprons. Fabrics range from a 50/50 polyester/cotton Cooltex fabric to a long-staple Egyptian cotton for an executive style. All the garments can be commercially laundered. Mitchell adds: “This is a niche market but the jacket is a very important garment for a chef. We believe that the styling and the quality of these products will make them very attractive indeed.”
