UK's Leeds Group to benefit from low cotton prices

13 Jan '12

2 min read

Leeds Group Plc, the UK-based company engaged in textile processing, specializing in fabric printing and yarn dyeing, is expecting a better performance owing to recent decline in prices of cotton.

However, the company added that the economic situation still remains grim and customers are buying less fabric than usual this year.

The prices of cotton grew more than 100 percent to reach a record high nearly six months ago. Although the prices have not declined to prior levels, they have declined considerably and the Leeds Group expects this would increase demand and volumes will return to normal.

Hemmers Europe, the Germany-based subsidiary of the Group, saw sales declining by about 20 percent year-on-year during the past few months because of high price of cotton products and less consumer spending.

To preserve margins, Hemmers hiked the sale price of its fabrics and the company was able to post revenues at last year's levels.

In the six months ending November 30, 2011, the revenues of Leeds Group remained flat at £14.7million, while its pre-tax profits surged from £240,000 to £700,000 because of decrease in overhead expense levels and distribution costs.

Leeds Group mainly supplies its fabrics to clothing manufacturers, small wholesalers, German supermarkets and retail outlets.

Fibre2fashion News Desk - India

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