This week, we unveil the results of our Brexit survey, and set out the four key issues you believe should be the priorities in the negotiations as we prepare to leave the European Union.
Unsurprisingly, the survey unearthed strong feelings on both sides of the Brexit debate. Going through the comments, what struck me was the continued sense of disbelief from many in the fashion industry that this is where we’ve ended up. Words like “disaster” and “devastating” appear more than once.
However, others spoke of the opportunities that could come from Brexit, such as being able to develop our own trading partners, unhampered by the EU. Even among the “remoaners”, there was often a stoicism: “I voted to remain, but now the decision has been made, let’s get on with it,” was a typical response.
The biggest priority you identified is the need to form a trade agreement with the EU that keeps import costs low, while simultaneously pursuing agreements with non-EU countries. At the British Retail Consortium’s Brexit debate last week, chairman Richard Baker warned that any significant increase in tariffs will inevitably find their way into shop prices, as retailers cannot absorb many more costs. Businesses we have spoken to over the past few weeks firmly agree.
We’re stuck with Brexit, so let’s look at the opportunities
The fashion market is declining at its steepest rate since the global financial crisis. Retailers are continuing to over-buy and run deep discounts, and this puts more pressure on margins at a time when the cost of doing business is increasing. You can only squeeze your supply chain so far.
Having said that, I agree with the optimists among you. We’re stuck with Brexit, so let’s look at the opportunities. Yes, the cost of trading within the EU may rise – but we may also be able to form our own trading agreements with other countries in the future. Yes, we face a potential skills shortage in the UK if there is a clampdown on immigration. But if the government recognises this risk and commits to funding the development of such skills locally, it could give Made in Britain a welcome boost.
Professional services firm KPMG has coined the phrase “a Savile Row Brexit”, to capture the necessarily “British and bespoke” nature of the negotiations. The UK will be the first country to trigger Article 50, so we have a unique opportunity to carve a new path. The fashion industry contributes £28bn to the UK economy. Let’s combine our might and fight for the best deal.
A future in which the cost of cross-border trading is kept low and the UK is still considered an inclusive society may seem like a distant dream at the moment, especially as politicians bandy about threats of a “hard Brexit”. But there are at least two years of negotiations to come, and nothing is set in stone. If the referendum has taught us one thing, it’s that anything is possible.