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Fashion industry braced for prospect of Brexit

The British fashion industry is braced for the trading implications of a possible vote to leave the European Union on June 23, as public opinion appeared to swing in favour of Brexit this week.

Moda

Moda

There are concerns about the impact of a Brexit on trade shows like Moda

The “leave” campaign had an average two-point lead in the polls earlier this week. The fashion industry, however, is at odds with the wider public.

A survey published this week by the British Fashion Council of 290 UK-based designer businesses found 90% wanted to remain, 4.3% wanted to leave, 2.4% were undecided and 2.8% would not vote.

Retailers have also expressed fears over a possible Brexit. A recent survey of 50 retail chairmen by advisory firm Korn Ferry found 80% believed leaving the EU would have a negative impact on the UK economy.

Asos chairman Brian McBride said he would be particularly concerned about the potential impacts on the supply chain: “With any form of border tariff friction, parcels get stopped and searched more often, so there is greater potential for impact or delay in the product journey.”

Derry Curry, managing director at footwear supplier Park Lane Shoes, went further: “It would be a total bloody disaster. Everyone relies on imports because we make fuck-all in this country. We’d face tariffs, sterling would go down and the euro would go up.”

Achilleas Constantinou, chief executive of women’s eveningwear brand and supplier Ariella, told Drapers he sympathised with people’s frustrations over the EU, but he added: “As David Cameron said, ‘The way you fix that is from within – not by leaving.’

“It makes absolutely no economic sense to close the door on such a huge economic market. We’ve got kids now who can go over and sell in Milan as if it were Manchester, and we’re on the verge of throwing it all away. Leaving would destroy their careers.”

He said trade shows in particular would suffer, recalling the “bad old days” of travelling to Europe before the EU was formed: “The preparation we had to put in to take our goods across the borders could take weeks.”

Nick Cook, industry director for fashion at Birmingham-based trade show Moda, concurred: “If we leave, psychologically brands will see the UK as being harder to do business with, and the uncertainty surrounding investment in the market will be greater. All the UK brand owners I’ve spoken to will be voting to remain, and I’ll be doing the same.”

There were anecdotal suggestions that relationships between brands and distributors may be harmed – and in some cases already have been – as uncertainty hits confidence.

Anton Del, owner of Anton Del fashion consultancy, said: “A couple of Spanish brands I work with are not moving forward with a contract because of the referendum. They were looking for agents in the UK but they are now holding off until after the vote to see if we leave, as trade terms may change.”

But not everyone predicted apocalyptic trading conditions outside of the EU. Andrew Maloney, owner of Sheffield independent Eton, said he would vote “leave” but admitted his decision was “not really business related”.

“Two of my biggest suppliers are from Italy and France, and I see no reason why that relationship won’t carry on as normal if we do leave,” he said.

A report by the Economic Intelligence Unit has predicted retail sales in the UK would contract by 3% in 2017 in the event of a leave vote.

 

 

 

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