Since the referendum in favour of Brexit almost three years ago, British society has been divided in two. The withdrawal from the European Union is on everyone’s lips, many of whom express their concern about consequences that are still difficult to perceive. Not giving up the battle in any way, the opposition mobilizes under the banner of The People’s Vote movement, which campaigns for the validation of the final agreement by the citizens.
Last January 15, the deal proposed by Prime Minister Theresa May is rejected, referred to as the greatest parliamentary defeat in the United Kingdom’s modern history. The following day, the British Fashion Council officially supports the campaign for a second referendum.
politically involved… unless a market worth 32.3 billion pounds is at stake. What consequences does Brexit already have on fashion? How does it affect brands? The customers? Will its effects be felt only within the country? Will French wardrobes also be affected?
Fishing is not the only sector in trouble…
The torment of waiting
Owned by the Crown, the United Kingdom Fashion & Textile Association (UKFT) aims to create a network that supports young designers. In an interview with VOGUE Business, it states that the effects of political instability are already being felt. Foreign investment is at half mast, the creation of new production units is slowing down, and orders placed by international multi-brands are dropping.
External actors are cautious, fearing to enter a market without being able to speculate on its evolution. Variations in the pound’s exchange rate complicate trading, but above all profits (one month after the victory of the “yes” vote, the currency reaches its lowest level since 1985). Being the opportunistic consumers that we are, one might think London is on the way to becoming a shopping El Dorado. This is true if you spend at Topshop on Oxford Street, rather than on its French e-shop. As for hoping that Gucci sliders would cost less at Harrods than the Galeries Lafayette, the department store’s sales manager confirmed that luxury labels have already adjusted their prices (upwards) to offset fluctuations…
In addition, the successive postponements of the Brexit promulgation upset the fashion calendar, which is wondering how to keep its famous time ahead. With a date announced for October 31st, one month after the presentation of the future SS20 collections, the structures of British brands are likely to change overnight.
No deal, no style?
It is difficult to predict the divorce consequences until an agreement is reached. While uncertainty reigns among designers, the definition of a strategy in case of a “no deal” is essential. If mastodons like Stella Mccartney or Alexander McQueen, protected by Kering and LVMH, will have no trouble recovering from Brexit in all its forms, the same cannot be said of SMEs which, according to the UKFT, represent more than 99% of the sector’s players.
Absent from trade between members of the European Union, the United Kingdom would henceforth be subject to tariffs. In an economy where most shirts are made in Portugal, shoes in Italy, and coats in Romania, logistics would be shaken, not to mention the inexorably rising costs. At Burberry, whose costumes are made on the other side of the Alps, we talk about “tens of millions of books” (source Business of Fashion, ed.).
One can imagine that such a phenomenon would push to stimulate local production… but on its own soil, England suffers from a shortage of human resources trained in the production of clothing. In the London area alone, it is estimated that 80% of sewing workshop workers originate from Eastern Europe. Additional complication: three quarters of the fabrics used in the country are imported, and would therefore also be subject to customs duties (source Evening Standard, ndlr).
Everything therefore suggests that these changes, besides disturbing some of our favourite brands, will have an impact on the final price. Talking to the BBC, the founder of the Our Legacy brand estimates that he will have to impose an average increase of 20% in the event of a no deal. Yet, we can also expect the same increase from French, Italian or American labels: if Balenciaga and Off-White have to raise their prices in England, they will do the same in the rest of the world, making sure that their products retain the same value everywhere. In short, get ready to pay even more for luxury…
In the midst of this confusion, one can only hope that the powers governing us will succeed in finding common ground — if not for the British people who may have asked for it, at least for the sake of our wardrobe. Otherwise, will London succeed in preserving its status as a fashion capital…? •