Overtrading looms over UK leather industry
The full consequences of this practice have not yet materialised but already almost half of the industry has seen its profitability decline. David Pattison, Senior Analyst at Plimsoll explains: “The good times could be passing; profits are certainly falling. In an attempt to retain sales, 257 companies have already started to blatantly oversale, selling at a loss.”
353 companies, typically existing on tight and declining margins, are reported to be hardly breaking even. The remaining 325 are as yet unaffected, mainly those that have remained very profitable.
This situation could lead to a fall in prices across the industry as competition increases or to the ‘overtrades’ running out of money.
