Home / Knowledge / News / Apparel/Garments / Brexit affects clothing retailers in UK: Moody's
Brexit affects clothing retailers in UK: Moody's
Oct '16
Brexit could add to the woes of clothing retailers in the UK as they will find it difficult to pass on the cost increases incurred by them due to pound's weakness, says a recent report. However, the overall annual revenue growth for European retailers will remain within a range of 2 per cent to 3 per cent during the next twelve to eighteen months.

Sustained economic recovery and rising consumer confidence will drive steady overall revenue and earnings growth for European retailers into 2018, said the 'Retail - Europe: Moderate Overall Sales and Continued Earnings Growth Support Stable Outlook' report by Moody's investors service.

“Following the Brexit vote, UK clothes retailers could find it tough to fully pass on cost increases incurred as a result of sterling's weakness. This is because we expect the market to remain highly promotional, with plenty of discounting, as volumes so far this year have been hit by unseasonal weather, shifting consumer spending and weak consumer sentiment around the time of the vote,” said David Beadle, vice president - senior credit officer, Moody's and the report's author.

The report noted that earnings growth rates will differ across individual countries and segments in Europe, with UK retailers facing a less confident overall outlook than some of their peers due to the added pressure by the Brexit vote.

Moody's also predicted higher average annual EBITDA (or Earnings Before Interest, Taxes, Depreciation and Amortization) growth of approximately 4.3 per cent for rated issuers as some firms may benefit from store roll-out plans or mergers and acquisitions (M&A) cost savings.

On a country-by-country basis, large Russian retailers will continue to report double-digit revenue growth, added the report. Spanish revenues will grow 3 per cent as the country continues to recover from recession. Annual revenue growth in Germany, France and the Netherlands will be 1.5 per cent to 2 per cent as their economies recover. Italian annual revenue growth will remain subdued at around 1 per cent.

Customers' growing demand for convenience and value will result in the growth of online sales penetration, while both discounters and specialists across segments will continue to win market share from mid-market generalists.

“European retailers perceived as offering superior value at various points across the price spectrum, for example affordable luxury players, will outperform those perceived to offer mediocre products at less attractive prices,” added Beadle. (KD)

Fibre2Fashion News Desk – India

Must ReadView All

Textiles | On 24th Oct 2016

Indian govt plans roadshows to promote textile exports

The Indian government has planned to conduct roadshows to boost the...

Textiles | On 24th Oct 2016

TPP may hit roadblock

The 12-member Trans-Pacific Partnership (TPP) that was signed earlier ...

Textiles | On 24th Oct 2016

Baba Ramdev’s Patanjali to enter textile manufacturing

Patanjali Ayurved, an enterprise initiated by yoga guru Baba Ramdev,...

Interviews View All

Jurgen Gauger

‘Buying crowdsourced or creative designs are much more appealing to the...

Frank Gossmann
Rotorcraft AG

‘RT3 motto is: Do not check millimetres, check colours.’

Giovanni Pizzamiglio, Paolo Crespi & Riccardo Robustelli
Epson, For.Tex & F.lli Robustelli

‘The percentage share of printing in the global textile market is pretty...

Marcel Alberts

Coating at a fibre level is a practice not usually seen in the...

Ashok Desai
Bombay Textile Research Association

Bombay Textile Research Association (BTRA) is a leading name in textile...

Larry L Kinn
Suominen Corporation

Larry L Kinn, Senior Vice President - Operations Americas of Suominen...

Tony Ward
Tony Ward

"You have to truly understand what your client wants, know her needs, what ...

Robert Brunner

Golfwear and menswear brand Devereux is set for greener pastures. Robert...

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies

October 2016

October 2016

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.


Browse Our Archives


Advanced Search