Brexit 's impact on the fashion industry
Since the United Kingdom broke away from the EU, many fashion professionals stay tuned to see what impact this political event will bring on the retail and luxury market.
After all, Europe is home to the fashion industry, and British local brands have a significant influence on Europe and even on the whole world, such as the British luxury brand Burberry and Jimmy Choo, popular brands in recent years Alexander McQueen and Victoria Beckham.
The most direct impact on consumers is whether the price of UK products will rise or fall. Intuitively speaking, the pound has fallen, so buying from the UK naturally saves money. When we take a careful look at the industrial chain, you will find productions of many British fashion brands are made on the European Continent, especially Italy, the export giant of high-end luxury fabric. Once Britain exits from the EU, costs of imported fabric and production will certainly go up. In the end, the higher cost will be undoubtedly be passed on to consumers. So, it is hard to say whether this means a saving or not.
To give a simple example, most production of Burberry is carried out in Italy and 65% of the sales cost is settled in Euros. With the Brits leaving the EU and the pound devalued will this will certainly give rise to increased cost of raw materials purchase and production of Burberry products.
Perhaps the prices of these British fashion brands will not rise within a short period, because the Brexit process is long enough and these spillover costs will not be reflected in the price immediately, but it’s hard to say in the long run.
When it comes to recruitment, after Brexit, the process for non-native talents to relocate to the UK will become more complicated and difficult. Especially those from the other parts of the European Continent, resulting in a certain degree of hiring hindrance. To retain these high-end overseas talents in the UK, or to attract them to work in the UK, fashion brands, especially the small fashion brands in their startup phase will have to increase their efforts and expect an increase in recruitment costs, which will also eventually be passed on to consumers.
Mobility of talent is essential in the fashion industry. The injection of fresh blood is indispensable to the innovation of old brands and the DNA implementation of new brands. London Fashion Week is also famous for making the greatest effort to promote new talents amid the four best-known fashion weeks. Now we can only wait and see the impact of Brexit on this.
