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Election uncertainty hits fashion retail

Industry leaders have called for more engagement with businesses and a clear plan for Brexit, as the run-up to the snap general election has caused uncertainty among consumers in an already difficult market.

theresa may

theresa may

As the UK prepares to go to the polls on 8 June, several party pledges have emerged that will impact fashion retailers.

Among key manifesto points, the Conservatives have vowed to double the charge levied on companies employing migrant workers to £2,000 a year by the end of the next parliament. They also plan to increase the national living wage to 60% of median earnings by 2020 and give workers the right to up to a year’s unpaid leave to look after sick friends or relatives.

Labour, meanwhile, has outlined plans to bump up corporation tax to 26% from 19% by 2020 and raise the minimum wage to £10/hour over the next three years. Over-18s – who currently are set a lower minimum – would be entitled to the same as those aged 25 years and over.

Fashion bosses told Drapers the manifestos showed a lack of business understanding by both leading political parties. 

Executive chairman and founder of The Dune Group Daniel Rubin said: “There has been an element of uncertainty. Retailers are facing a series of challenges, including the living wage, the apprenticeship levy and the rents hike.” 

“Consumers are more cautious about spending. I’m concerned the government is coming across as business-unfriendly. It is essential the government engages with businesses to improve productivity.

“It’s about understanding the challenges a business faces and doing everything they can to increase productivity by engaging with business leaders. Their priority should be more investment and working with businesses to improve UK economic performance.”

Superdry founder Julian Dunkerton said both main parties did not adequately address the need to increase overseas investment opportunities: “I don’t think any of the candidates have grasped what the future holds for us all. Britain needs to send out a clear message, and introducing tax-free manufacturing in the UK would show we are open for business. We need a positive agenda for foreign investors. This is what I would like to see from whichever leader we get.”

The election has exacerbated Brexit uncertainty, which is an unwelcome additional pressure for some.

Simon Berwin, managing director at tailoring business Berwin & Berwin, said: “The election’s links to Brexit has led to even more uncertainty that wasn’t needed. This will perhaps reflect more on womenswear than menswear, but with the summer sales approaching in four weeks and the election in three, retail is in a very difficult place at the moment.”

In the independent sector, retailers have been suffering from a lack of consumer confidence in the run-up to the election.

Lauren Brown, owner of womenswear boutique Sisters Boutique in Falkirk, said that trade has been “hideous” compared with last year: “The election has caused uncertainty and dampened consumer confidence. The manifestos are bad for business – we do not need this right now. Business rates is a huge issue. Also, parking needs to be free and VAT needs to be lowered.”

Hilary Cookson, owner at occasionwear independent Maureen Cookson in Whalley, Lancashire, echoed this and expressed concerns for the autumn season: “I am sad to say that I think the election has affected business. Brexit dampened customer’s ardour and the snap election has definitely hit us hard.”

 

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