Written evidence from the UK Fashion &
Textile Association (UKFT)
INTRODUCTION TO
UKFT
The UK Fashion & Textile Association (UKFT) is
a trade association set up by the industry for the industry to
represent the fashion and textile industry. Its membership covers
designer and mainstream fashion and accessories, textiles and
freelance designers but it also extends to fashion and textile
related bodies at regional and national level including the British
Fashion Council, organisers of London Fashion Week.
INDUSTRY OVERVIEW
The key strength of the UK fashion and textile industry
lies with its innovative designers. This design talent is the
product of our world-leading fashion and design colleges. They
act as a magnet for international talent. Students are attracted
to the UK, and especially to London, and after graduation many
of them stay here to launch their own designer businesses. With
the demise of much of UK manufacturing and the dominance of value
players in the UK high street, most designers choose to set up
on their own, with all the incumbent problems with implies.
A key challenge for these designers, but also for
most fashion and textile companies is that the key route to market
is trade shows. Most buyers do not travel to the UK to buy but
travel to key international events. More than 85% of all trade
fair activity in these sectors is in France, Italy and Germany.
These countries attract buyers worldwide from all countries including
all of the BRICs. Attendance can vary from 40% international attendance
outside the host country to as much as 80%, with the average being
around 60%. These shows, supported by direct contact and a good
agent or distributor are the main route to market for most companies
in these sectors. The high cost of travelling to and within the
UK as well as the limited number of companies which can be seen
at some key shows in the UK mean that buyers rarely come to the
UK to buy, preferring to visit Paris, Milan, Florence and New
York for easy access and a wider choice of product. The BRICs
companies prefer to visit these shows also.
GOVERNMENT SUPPORT
According to the Sponsors Alliance and some Government
departments, the ratio of return on TAP (Trade Show Access Programme)
is approximately £37 pounds of revenue to the UK for every
£1 of investment. TAP is one of the most highly regulated
and constantly amended programmes. As usual, it is subject to
review and constant cuts. The Fashion and Textile budget is one
of the largest, probably in excess of 15% but it is consistently
oversubscribed. By contrast, our EU neighbour's equivalents of
TAP have remained largely unchanged for much of the past 20 or
30 years, are handled by industry associations who enjoy a greater
degree of discretion in the way they invest the money. Whether
centralised or regionalised, funded by industry levies (France
for example) or discretionary budgets handled through national
trade fairs and their related associations (Italy for example)
most of them aim to provide between 50% and 75% support on the
direct and indirect costs of space, construction, travel, accommodation.
The UK currently offers six participations of £1,000, £1,200,
£1,400 or £1,800 which probably cover less than 25%
of the stand costs. The UK programme in 2010 across industry was
estimated at around £8 million. The German scheme is estimated
to cost around £22 million.
An additional problem is the virtual withdrawal of
sectoral trade missions. These missions play an important role
in helping companies which have made an initial start in a market
or series of markets at a trade fair to target and develop their
business in markets further from home. Until some years ago, these
missions were run very successfully by Trade Associations but
they have since been put into the hands of the regions (UKTI ITAs)
who limit the number of companies which can take part. Initially,
these were low cost events organised by Trade Associations working
directly with Embassies and Consulates with a small contribution
towards costs from the companies themselves and a mode travel
grant of up to £700 per company. More recently they were
put out to tender in such a way that increased the costs associated
with them with Embassies charging several thousand pounds for
groups to visit. This year, using the rationale of cost cutting,
these missions have been taken into public hands and their numbers
have been cut. We used to run up to three missions a year, now
there is only one to Japan and this is run by GLE. We need to
be able to encourage companies to look at new markets and missions
would enable us to do this.
Exports are key to the survival of fashion and textile
companies. The main reasons for this is the a lack of a supportive
domestic market in the UK (compared with countries like Italy
and Germany which have a greater percentage of smaller boutiques
which consume higher priced merchandise and can help a designer
business to grow). This can also be expressed as an extremely
open and price conscious UK market which looks to cheap foreign
imports for a large percentage of its product contrasted with
limited appetite for quality product in some of the emerging markets,
especially China. Made in the UK business is being lost to overseas
competitors whose regulatory framework is not as robust or exacting
as the UK's or where their government provides substantial support
to the industry (Italy is the most often cited example for fashion
and textiles but China through its currency situation has been
allowed to undercut almost every other manufacturing market and
has pursued an aggressive policy of fashion and textile domination).
KEY ISSUES
- Trade associations and other not for profit industry
support organisations are excluded from a number of Government
schemes and relationships and would like to work more closely
with government to help it to deliver "more with less".
- UK manufacturers are faced with unfair completion
for procurement (eg MOD and possibly the Olympics) where price
is the only factor quoted. HJ Hall in Leicestershire recently
lost its MOD sock contract to a Northern Irish-based company employing
a handful of administration staff in the UK but manufacturing
everything in China. Job losses are imminent. It would be unthinkable
that a Chinese company would lose out on a similar contract in
China.
- Government has spent much of the past 13 years
deregulating and encouraging banks and insurance companies and
has not given consumer goods the attention and support they need.
To pay for schools and hospitals, we need exports of product and
design. However, in too many cases, the export of design has purely
been in the form of knowledge transfer (as well as jobs, social
problems and environment issues) to China.
PROPOSALS
- Trade Associations like UKFT are potentially
a great area of support and strategy for industry and new designers,
especially as they start out. Over the past 13 years these private
not-for-profit organisations have been marginalised and excluded
during the expansion of UKTI and many are struggling to survive
as government (regionally and nationally) has sought to take an
increasingly dominant role on export marketing and promotion,
often in direct competition to them. In these times of limited
funding, a better working relationship between government and
Trade Associations could lead to a better Trade Association network
which would, in turn, support the industry better, work with emerging
talents and help Government to ensure that key outputs are achieved
with less investment required from Government.
- Build on the success of the existing TAP scheme
to encourage more companies designer companies to sell to new
and existing export markets.
- Encourage larger companies to be part of TAP
(this used to be known as "Godfathering" and it was
hugely successful. The larger companies received a small grant
or a free flight to attend an event in return for which they helped
the emerging talents with contacts and support and the benefit
of their experience.
- Realign the mission budget on a national level
to ensure that limited resources are more effectively used.
- Enable ATOs (Accredited Trade Organisations)
to work directly with Embassies and Posts to organise independent
missions even if additional grant funding is not available. If
Posts could work on missions without charging for their OMIS time,
this would be a better inducement for the private sector and companies.
- Incentivise ATOs/Trade Associations to promote
other UKTI activities (missions, Passport, Gateway etc). Recreate
a strong relationship between the industry associations and the
Embassies and Consulates.
- Rebuild the Commercial Officer network in every
key market and use local trade teams to connect with local buyers
and contacts to feed export leads back to companies in the UK.
In recent years, Posts have had less time to do this and when
they have done so, the information has been communicated poorly
on the UKTI site. UKFT would also be happy to circulate information
to the industry and would be able to send feedback on the status
and quality of the leads to Posts who frequently do not get any
feedback under the current system.
22 February 2011
|
