On Thursday 23.06.2016, Britain made history with voting to leave the European Union. It is undoubtably a heartbreaking decision that many people never believed would happen. While many economical questions remain open, understanding the concrete consequences to the Brexit remain difficult to perceive. A bigger challenge is even to understand the direct effects of the Brexit on the fashion industry.
Many members of the fashion industry expressed their disappointment, from Vivian Westwood to Katie Grand, from Christopher Bailey to Cozette McCreery and the list goes on. We as well should be equally disappointed; weather we are consumers or executives we all share the shock of this wave. So what does the Brexit mean for us, and what should we be expecting?
Price fluctuation :
The pound has reached its lowest value point in years after the Referendum vote got out. Which means all sorts of merchandise would become more expensive to buy. Why? A weaker pound would force many fashion companies to spend more money to produce the same amount of clothing. The company is left here with two choices, either absorb the costs if it can bear it or charge the buyer more for the final product. But don’t worry there is still time for that to happen, if you happen to be in London now go on a shopping spree now before prices hike up.
Trading goods & expansion :
The UK used to benefit from trade regulations with over 60 countries, exiting the european union will not only sabotage trade relations but will also force countries to make new regulations with them. Many “Out-ers” proclaimed that this puts Britain in a position of power and control over trade negotiations, but many countries promised consequences. As some of you know, many companies and luxury brands import fabrics mainly from italy, france and portugal to manufacture their clothes, in other words, brands who benefited from this free-trade liaison will now have to rethink and financially restructure the way they have been doing business for years. They might even need to pay higher taxes to ship and sell products oversees. According to Fashion United “export is cited as one of the key components for fashion companies to be able to reach over a 100 million pounds in sales”
Weather this will positively impact companies or not, we are still not sure how consumers will be impacted. One thing for sure, brand expansion will be extremely difficult not only in terms of trade but also in terms of market concurrence, especially for upcoming designers. Many brilliant talented designers have relied on online shopping and free trade to grow their business, designers like Phiney Pet for example who was able to grow her business through ASOS.
These are just the least of the problems the industry might face. To say the least, they will be the main and direct problems of the industry, but we must not forget the loss of creative talent that has long benefited form the good liaisons between britain and the european unions.