I think we are all a little weary of the Brexit debate and despite my Politics degree I tend to avoid open debate on such personal choices. However given the total lack of real surety about the implications of a stay / leave outcome I am concerned to read that a very real consequence could be a rise in the cost of clothing – facile to some I know, but a subject close to my heart! (The independent business news 1/3/16)
At the start of the Brexit debate the idea of a leave outcome seemed comical and a distant possibility but as we get closer to the 23rd June it’s clearly hard to call.
Working with Retail Fashion and Lifestyle clients in the UK, it’s equally clear that an exit will have significant negative implications for an industry which contributed an estimated £26 billion to the UK economy in 2014/15. Some of the risks being raised seem to be some of the most solid and realistic outcomes articulated to date.
The most immediate impact would come from the likely depreciation of the British pound. Already, the debate over Brexit has had an impact on the country's currency; in February, at the start of the debate, the pound plunged to a seven-year low against the dollar. If Britons vote “Leave” its value could fall by a further 20%, according to HSBC. (www.businessoffashion.com) For British fashion businesses sourcing in counties such as China & Asia where they pay in dollars, a weaker pound increases costs – these will either have to be absorbed or passed on to the customer.
Should we remain in the EU we will continue to enjoy favourable trading terms with more than 60 nations. An exit requires these to be renegotiated; can this really be simple and straight forward? Will the additional costs be recovered at the point of sale?
20 years ago the significance of British fashion brands was far less, we now have a global reputation for nurturing home grown fashion innovators and this attracts talent to London. For British luxury brands selling volume overseas an exit impacts profitability. Furthermore European brands that choose to HQ themselves in London may think again if their ability to do so is impacted by a leave vote.
Finally, for London’s world-renowned fashion education system, a Brexit can only be bad news. British fashion education benefits from EU investment in the form of research funding and initiatives that support innovation and bring together fashion designers, manufacturers and technology partners from across Europe. London's famous fashion schools also attract talented students from the EU, who may not be able to afford our international tuition fees, were it not for the reduced cost EU member countries receive. Many of these students choose to stay and set up their businesses in the British capital which is part of the core reason for our revitalised success in leading global fashion trends.
For me Donald Trump supporting the Brexit team was enough to ensure I was with the stay camp, but if this isn’t reason enough, paying more for my fashion fix definitely is!
Tamsin Terry-Lush is Head of the Retail Practice and specialises in making senior leadership appointments in fashion and luxury goods.