New Zealand's largest textiles supplier is shutting its fashion division - which some local designers say will leave a huge hole in the industry.

The news follows the announcement earlier this year that another company, Cooper Watkinson Textiles, was quitting the industry.

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Paul Blomfield, an advocate for the NZ fashion industry, said the loss of textile factories across New Zealand would degrade the variety and choice for local designers' final products.

"[Local textile suppliers] were great at sourcing small volumes of interesting prints and that would give New Zealand makers the opportunity to make something a bit more exciting," Mr Blomfield said.

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However, the shutdown of local suppliers appears to be another symptom, rather than the cause, of the pressures on the fashion industry, former Pumpkin Patch designer Carly Tolley said.

"I think it's bigger than New Zealand because Charles Parsons has closed in Australia, their fashion division, so what I think has happened is that New Zealand was just a flow-on from Australia," Ms Tolley said.

"Australia was struggling and we are feeling those effects - the Australian market is probably suffering more than us."

Local designers relied heavily on the New Zealand-made angle to sell their products as it gave them their own signature, Ms Tolley said.

Several high-profile local fashion labels have closed down recently - women's label Andrea Moore, menswear brand Meccano and shoe store Minnie Cooper.

New Zealand label Maaike's designer Abby van Shreven spoke to Nine to Noon about the struggles designers faced as they were confronted with a shrinking supply of unique textiles that were locally sourced.

"Everyone is trying to be different and when you take away the biggest fabric supplier, does it all start to look the same even more so?" she said.

Ms van Shreven said buying fabric from Charles Parsons was the perfect fit for their needs, in terms of fabric and budget, but now they were having to rethink how to process their textiles.

"For us, we already do our own custom fabrics and we get that printed in China because we can't find anyone to do it here in New Zealand that can digitally print, and there's been a few other designers that we've shared that contact with," she said.

Mr Blomfield encouraged New Zealanders to buy more locally-produced fashion items instead of switching to online products or buying from mainstream Australian-owned brands to aid the survival of the industry.