Surging Demand for Locally Produced Denim Sparks Growth in the Industry

Words by Retail Bum

Surging Demand for Locally Produced Denim Sparks Growth in the Industry
Surging Demand for Locally Produced Denim Sparks Growth in the Industry

Rising expenses and increasing consumer demand are propelling denim brands to focus on enhancing supply chain innovation and sustainability.

The market is witnessing a notable increase in the demand for small-batch “craft” denim, which is manufactured in factories specializing in small product runs consisting of 50 to 500 units, emphasizing localized and customized production approaches.

Brands like Frame and Hugo Boss are some of the many players that are capitalizing on this trend. Frame made headlines by introducing a $12,000 pair of jeans, while Hugo Boss launched its upscale denim line, Hugo Blue, in May. These recent developments highlight the growing importance of premium and exclusive denim offerings, showcasing consumers’ evolving preferences in the market. 

There are also several other benefits to investing in craft denim. In a report published in November 2022, consulting firm McKinsey highlighted that small-scale local factories offer significant benefits to fashion brands. According to the report, such factories can help brands reduce costs by up to 20%, enhance time-to-market by up to 50%, and decrease lead times by up to 70%. These advantages are particularly relevant in the current global economic landscape, where economic challenges are intensifying the urgency for nearshoring strategies.

Craft denim factories also stand to benefit local communities. According to the World Economic Forum, the establishment of new small-scale factories has the potential to generate 4.5 million jobs worldwide by 2030 across various stages of the value chain, starting from design and production to marketing and sales.

The U.K. is one market that is witnessing a growing trend of nearshoring craft denim manufacturing practices, driven by the post-Brexit environment that has encouraged investment in research and development within the British fashion industry. While the region has historically focused on fashion material products such as wool and tweed, the increased costs of transporting goods from Europe following Brexit have prompted the U.K. government to prioritize local manufacturing. This shift reflects a strategic effort to reduce dependence on European suppliers and foster self-sufficiency in the fashion industry.       

The U.K. government has also been making investments in research and development (R&D) in craft denim. In April 2023, Blackhorse Lane, a prominent player in the industry, received a government investment of £80,000 ($98,000) to establish the country’s inaugural denim laundry facility focusing on sustainability. This investment originated from the Business of Fashion, Textiles, and Technology project, a five-year initiative to foster sustainable innovation.

Located in London, the craft denim manufacturer, Blackhorse Lane, has been operating since 2016. The brand specializes in producing small-scale denim collections for its brand and renowned names like Studio Nicholson, TOAST, and MR PORTER.

With founder Bilgehan Ates boasting 34 years of manufacturing experience, Blackhorse Lane has demonstrated impressive production capabilities, manufacturing up to 28,000 pieces weekly. Ates emphasized that nearshoring has become highly appealing to brands as they seek to address the challenges of escalating global costs and meeting the growing demand for sustainable manufacturing practices.

Apart from Blackhorse Lane, eight other R&D projects across the U.K. have also been granted financial support as part of this endeavor. The government’s commitment to supporting R&D in the fashion sector underscores its dedication to driving sustainable practices and fostering innovation within the industry.

These efforts are starting to pay off. In 2019, the export value of women’s and girls’ jeans from the U.K. reached £128 million. Several notable brands, such as Martine RoseFallow, Empire, Hebtroco, and Studio Nicholson, have contributed to domestic denim production in the U.K., bolstering the country’s denim industry and showcasing their capabilities globally.

Outside the U.K., European small-scale denim production has also seen noticeable growth. Portugal has emerged as a significant hub for smaller brands prioritizing sustainable production, although it is not yet widely recognized for denim manufacturing. Similarly, in Los Angeles, which serves as the garment production hub in the United States, sustainable factories are beginning to establish their presence, aligning with the industry’s growing emphasis on eco-friendly practices.

As stated in a report by Fashion for Good, small-scale factories have the potential to significantly reduce resource consumption compared to traditional manufacturing methods. The report found that such factories can decrease water usage by up to 90%, chemical use by up to 50%, and energy usage by up to 80%. These figures underline the environmental benefits of adopting small-scale manufacturing approaches in the denim industry.

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