With the UK set to leave the European Union at 11pm on Friday 29th March, we’re still no closer to knowing what effects this will have on various businesses. So, we’ve invited Michael Barker, Chief Brand Officer at designer fashion retailer Garment Quarter, to try and shed some light on how Brexit might affect the fashion industry.
As with any question surrounding Brexit, no one has a magic crystal ball with all the answers. Even now, with less than two months to go, it is still unclear how we will leave, and what effect leaving will have on the fashion industry. That being said, it is possible to see how the effects of certain events could ripple through the sector. While we don’t know exactly what free movement of people will look like, whether there will be increased import tariffs, or whether large brands will relocate offshore, we can make informed assessments about the impact these things could have on the industry.
Skills and talent
The fashion industry is undoubtedly a vital part of the UK economy. It’s a sector worth £32 billion a year, according to the Evening Standard, and it currently benefits massively from the free movement of people across EU states. This access to a diverse European talent pool of students, who have been able to freely cross borders to study and contribute creatively to the UK, has been an immeasurable help in growing the UK’s fashion sector.
There are over 10,000 Europeans working in the UK’s fashion industry at present and, if free movement ends, it will become much harder for European students to stay in the UK and contribute to the sector. This poses a problem to the UK fashion industry, as it will restrict access to the new ideas and perspectives that have shaped the diverse and vibrant fashion landscape of the UK.
Trade and tariffs
The UK imports nearly £10 billion worth of clothes and shoes from the EU every year. Without knowing what type of deal we are leaving with, it’s hard to know what future import tariffs will look like. If tariffs increase, it will become more expensive to bring goods into the UK, which would cut into the margins of UK businesses and ultimately result in increased prices for consumers.
The journey from the conception of designs, through production, manufacturing, material sourcing, wholesale and, finally, retail, often take place in many different countries. Leaving the EU could cripple the speed and ease of moving products that is required to keep up to date with the immediacy of the fashion industry. If British designers are hampered by increased costs, they risk lagging behind their European counterparts.
Capital flight
For an industry that is built on speed and delivery, complications with logistics could be catastrophic. The uncertainty surrounding Britain’s supply chains and the potential for increased costs could well lead to the relocation of the UK’s biggest players in the fashion market. Industry leaders Net-A-Porter, Amazon, Asos, Farfetch and Matches all have their headquarters in the UK. Delays to their delivery from design to consumer could lead to relocation decisions, at a loss to the UK economy.
That puts at risk the £30 billion that fashion contributes annually to the UK economy — a sector that has been seriously overlooked throughout the Brexit campaign and negotiations. Much furore has been made about the fishing industry, which contributes under £2 billion annually to the UK economy, but hardly anything has been said about the fashion industry.
Homegrown resurgence
The UK hasn’t been a major producer of clothing since the 1970s, and most of the clothes you wear today will likely be manufactured in Asia. British manufacturing declined in the 1980s as offshoring became the method of choice for fashion brands and retailers looking to cut costs. In more recent years, there has been a bit of a resurgence for British made fashion, such as knitwear, in rapidly developing countries like India, China, and Brazil.
With the looming threat of increased tariffs and a devaluation of the pound, one positive to come out of Brexit could be the added incentives to produce and manufacture garments in the UK. Since the vote to leave the EU back in 2016, British manufacturing has done rather well, with surging sales coming from Asia, the Middle East, the Americas, and even the EU itself. This presents an opportunity to manufacture more clothing in the UK, which could bring with it many benefits.
Though we are still no closer to knowing what will happen come 29th March, we do know that an end to free movement, the implementation of import tariffs, and the relocation of businesses could send shockwaves through the UK’s fashion industry. While British manufacturing may see a boom, it is hard to see this offsetting the other negative effects of Brexit.
Michael Barker
About the author
Michael Barker got his start at Vivienne Westwood in Manchester and was quickly promoted to the role of Website Content Manager. In 2010, he co-founded Garment Quarter with two friends and today acts as the company’s Chief Brand Officer.
