Brexit – the topic on everyone’s lips. Whether you’re relaxing in sunny Spain or working away in the Big Smoke, Brexit has made it’s way into everyone’s dinner table conversation.
When Britain’s vote to leave the European Union was announced on the 23rd of June, the country turned upside down. Some were happy, some were shocked, but whatever your view it’s not come without its hiccups. As soon as the result was announced the pound plummeted to its lowest level against the dollar in 31 years and more than $2 trillion was wiped off the global stock market in reaction to the unexpected referendum result. This sent the country into panic and some who voted leave wished they could take it back but fast forwarding to a year and a half on, how is Brexit impacting our fashion industry?
The main areas of concern outlined by the British Fashion Council were trade and investment, talent and skills, and EU funding. All three could seriously change depending on the outcome of negotiations between Britain and the EU in the next few years. Many fashion companies including Burberry and Mulberry considered it too soon to comment on the issue, given the uncertainty surrounding Brexit at this stage.
At the beginning of the SS17 London Fashion Week, Theresa May gathered with a few of fashion’s elite for a meeting to discuss what would happen to the fashion industry after Britain left the EU. She was quoted “This is nothing new, there have been many booms and busts over the decades, but London fashion and the creative industries have endured, indeed, prospered even, in difficult times.” but with all the uncertainty surrounding the negotiations many are still feeling uneasy.
A recent parliamentary report found that non-financial industries like fashion could face serious damage if the UK fails to reach a suitable free trade agreement with the European Union. These industries accounted for 32 percent of the UK’s exports in 2015 and were valued at £161.8 billion and with no firm deals in sight the fashion industry is struggling to feel confident in the government and their negotiations. However there has been some recent good news for business leaders: it seems increasingly likely that the UK government will push for a two-year transitional deal to help smooth the process. What would this mean for Fashion?
A transitional period would potentially give the UK more time to negotiate free trade agreements with countries in the EU and around the world. Britain needs to conclude meaningful trade deals with the US, Japan, Australia, New Zealand, and so on because the sheer size of these markets creates so much potential for UK fashion. Some of the benefits of the deal include fashion businesses more time to adapt to new customs controls and give more time to establish new administrative systems for customs However, it could also keep the value of sterling low for longer which would potentially lead to retail price rises and have a knock on effect on consumer confidence.
In conclusion, there is still a large amount of uncertainty with how the negotiations will go and how it will impact the fashion industry. All we can do is sit, wait and hope there is a shiny pair of Louboutin’s at the end of the tunnel..