Barbour, the upscale outdoor fashion brand, has recently announced its decision to increase prices in response to mounting production costs and a slowdown in consumer spending. Despite witnessing robust sales, the company is grappling with issues such as surging inflation and the cost-of-living crisis.
Steve Buck, Barbour’s managing director, revealed that several factors have contributed to the need for price hikes. These encompass the escalating costs of materials, workforce, shipping, energy, as well as greater duty expenses. In an interview with The Telegraph, Buck explained, “The fiscal year 2022/23 will present extraordinary challenges for our business. The ongoing repercussions of the pandemic, Brexit, and the prevailing global economic uncertainty have presented numerous impediments to margins across all markets and channels, including mounting costs and pricing pressures.”
To alleviate the burden on customers, Barbour has absorbed only half of the cost increments, passing on the remaining share to the consumers. However, despite these challenges, the company experienced a notable 32% surge in sales, amounting to £286.6 million, in the year leading up to April 2022, as it rebounded from the adverse effects of strict lockdown measures. Buck highlighted that the UK has been more severely impacted by the cost-of-living crisis compared to Europe and Asia. Nevertheless, customers are still investing in high-quality pieces, particularly wax jackets, contributing to the maintenance of strong sales figures.
Barbour’s determination to raise prices highlights the persistent difficulties that businesses across diverse industries continue to face in light of the global economic climate. Inflation and escalating expenses have presented significant hurdles, compelling companies to seek strategies to ensure profitability while balancing the needs of their customer base. The fashion industry will likely be substantially impacted by these challenges, and it remains to be seen whether other brands will follow suit and also implement price hikes.
Useful links:
1. Article from The Telegraph
2. Article from BBC
