Thinking of Buying a Clothing Manufacturing Business in Australia? Here Are 3 Vital Questions to Ask

The Australian clothing manufacturing industry generated $558 million in revenue in 2025 across 502 enterprises, employing more than 2,100 workers.

Industry profit margins average 5.3%, with total profits of $30 million. However, revenue has declined at an annualised 4.8% since 2008 due to rising import penetration, offshoring, and the collapse of domestic department store demand.

While the industry is in long-term decline, niche opportunities remain in ethically produced, eco-friendly apparel, direct-to-consumer online retailing, and premium boutique fashion.

1. Is the Business Financially Resilient Against Imports and Offshoring?

Why It Matters:

Imports now satisfy nearly 90% of Australia’s clothing demand, placing intense pressure on local manufacturers.

Survival often depends on specialising in high-margin, small-batch or sustainable production rather than competing with large-scale overseas manufacturers.

What to Check:

• Revenue trends – The industry has contracted, but niche players in sustainable and ethical fashion command premium pricing.

• Cost pressures – Rising purchase costs for sustainable inputs (organic cotton, wool) can erode profitability.

• Import reliance – Assess exposure to global supply chains, particularly fabrics sourced from China and Southeast Asia.

• Offshoring exposure – Many businesses outsource part of production; evaluate how much value is retained locally.

2. Does the Business Have a Strong Market Position and Brand?

Why It Matters:

With low industry concentration, most clothing manufacturers are small boutique operators. Brand reputation, design innovation, and sustainability credentials determine competitiveness.

What to Check:

• Brand recognition – Businesses like Cue & Co and R.M. Williams thrive by leveraging strong Australian-made branding.

• Customer channels – Direct-to-consumer online sales are growing rapidly, bypassing wholesalers and department stores.

• Product differentiation – Niche apparel, such as sustainable jeans, custom T-shirts, or premium dresses, can shield against price competition.

• Retail partnerships – Assess whether contracts exist with boutiques, online-only retailers, or specialist uniform buyers.

3. Is the Business Positioned for Future Fashion and Sustainability Trends?

Why It Matters:

Global demand for sustainable and ethical fashion is reshaping the industry. Manufacturers that innovate with eco-friendly inputs, circular fashion, and digital sales channels are better placed for resilience.

What to Check:

• Sustainability practices – Ethical Clothing Australia accreditation and compliance with the Modern Slavery Act are increasingly important.

• Technology adoption – Use of automation, 3D knitting, AI-driven design, and virtual fitting rooms improves efficiency.

• Export potential – New Zealand and Asian markets demand premium Australian-made fashion, but a strong AUD reduces competitiveness.

• Product innovation – Businesses producing high-performance or multifunctional garments (UV-protective, moisture-wicking) are better aligned with consumer trends.

Ready to Invest in a Thriving Clothing Manufacturing Business?

Despite long-term decline from import competition, opportunities remain for manufacturers specialising in sustainability, high-quality local production, and direct-to-consumer retail.

Success depends on resilience against global pressures, brand strength, and alignment with sustainability and digital fashion trends.

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