How will Brexit impact the UK fashion industry?

How will Brexit impact the UK fashion industry?

   November 15, 2018  
 
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How will Brexit impact the UK fashion industry?

Britain’s fashion industry didn’t vote for Brexit: 90 per cent of designers told the British Fashion Council they were voting remain.

But with less than seven months to go before the UK formally cuts its ties with the European Union, this £28 billion sector has to get three very different looks ready to future-proof business.

Richard Lim, chief executive of analyst Retail Economics, outlines the potential scenarios: ‘Hard Brexit — where existing trade deals disappear, and designers, retailers and manufacturers would have to pay to trade with the EU — would mean clothing and footwear tariffs of about 11 per cent, or just over £1 billion more each year.’ A second option is a free trade agreement, ‘but we don’t know what kind of strings will be attached — it’s hard for businesses to plan’. Third, the UK could remain part of the customs union, but that seems unlikely given that Theresa May has already rejected this path.

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‘Whatever happens, the price of a pair of jeans will, in all likeliness, go up after Brexit,’ says Lim. ‘It’s tariffs, and an exodus of [European] shop staff, designers, warehouse staff, delivery drivers… As we “take control of our borders”, the pool of available staff is likely to shrink, meaning an inflationary impact on wages. It’s likely to be massively disruptive.’

Referendum result

The UK imports almost £10 billion worth of clothes and shoes from Europe each year; more than 10,000 European staff work in the British fashion industry. It has become a microcosm of UK Plc’s struggle to deal with the referendum result.

Katharine Hamnett has sold thousands of her ‘CANCEL BREXIT’ T-shirts and has released a new version, ‘FASHION HATES BREXIT’. She is campaigning for a second referendum, but has a contingency plan, too. She has set up her own Italian company, near Venice, ‘to handle production and logistics, so we don’t get snarled up in complicated Brexit red tape and import and export problems for our manufacturing and shipments’.

‘It’s terrifying that we know so little about “the deal” — the fashion industry works so far in advance, and it feels like we are in a blackout room and having to use a crystal ball to find our way out,’ says Frances Card, fashion consultant and former Matchesfashion.com COO. Her concern is echoed by Clare Hornby of ME+EM, whose Breton T-shirts are loved by the Duchess of Cambridge. Meanwhile, photographer Nick Knight is unequivocal. ‘The overwhelming evidence and general agreement on all sides now is that this country and its communities will be considerably worse off both economically and culturally if we leave the EU,’ he says.

It’s not all bad. The Brexit-fuelled crash in the value of the pound has seen surging numbers of Chinese, Arab and American fashion tourists chucking cash at the West End’s fanciest tills. But higher sales may not be enough to offset rising foreign manufacturing costs and an influx of shoppers may be balanced by an outflux of international talent from the industry. José Neves, founder of luxury online platform Farfetch, put it like this at last year’s Web Summit in Lisbon: ‘We have 25 different nationalities in our London office. If [Brexit] jeopardises that, it’ll be a major loss.’ Writer and consultant Nick Vinson points out, ‘Many great “British” designers are European and proud of it’: Mary Katrantzou is Greek, Simone Rocha is Irish, Peter Pilotto is Austrian-Italian.

EU fast-tracked visas

Stephanie Phair, chair of the British Fashion Council, says that ‘making sure young people from all around the world have access to creative education and skills to protect our home-grown talent pipeline’ is a post-Brexit priority. ‘It’s extremely important that we remain open and accessible to international talent,’ she adds. The BFC helps run the fashion arm of the Home Office’s Tier 1 visa scheme, giving 2,000 top designers from outside the EU fast-tracked visas. ‘In light of Brexit, this is something that is incredibly important.’

Stylist Tamara Cincik set up Fashion Roundtable to make sure the industry’s concerns were heard. ‘Fishing makes £1.4 billion for the UK economy, fashion almost £30 billion, but we only hear about cod,’ she says. ‘I know of two long-established London brands, one in accessories, one in women’s and menswear, moving to Portugal, and a large fash-tech business looking to relocate its logistics to Italy. With a hard Brexit or no deal, swathes of fashion firms expect to leave,’ she adds.

Universities claim the talent drain isn’t happening yet. The London College of Fashion says its proportion of EU applicants hasn’t dropped over the past year. The college’s head, professor Frances Corner, is a rare positive voice: ‘Brexit gives us an opportunity to ask what sort of fashionable future we want. Ideas and thoughts can’t be tied down to national boundaries, they will always break through,’ she says. But she mourns the end of EU funding, and potentially of the Erasmus scheme, which enables students and staff to work elsewhere in Europe.

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