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Retailers sound alarm over Brexit negotiations

Retailers and trade bodies are worried the fashion industry’s priorities and concerns have yet to be heard by the government, as prime minister Theresa May gears up to trigger article 50 next week.

Theresa May 2017

Theresa May 2017

Theresa May 2017

May will set the UK’s exit from the European Union in motion on Wednesday 29 March, kicking off two years of negotiations.

Industry bodies including the British Retail Consortium (BRC), British Footwear Association, UK Fashion & Textile Association (UKFT) and the British Fashion Council have all engaged with the government since the EU referendum last June to present the priorities for fashion and retail.

Yet some fashion and footwear retailers feel the government still does not understand the impact various post-Brexit scenarios could have on British businesses.

Daniel Rubin, executive chairman of The Dune Group, told Drapers: “[The government] has taken on board the views of bigger industries, such as car manufacturing, but the channels of communication for the fashion industry are not yet open.

“It is paramount that the government sets up the right channels to speak to the industry. There are a series of unknowns that will dramatically shape how we do business. There’s not a lot we can do at the minute but the government must get the message, as the impact could be devastating.”

He added: “There are so many factors relating to Brexit that will affect the way we operate – employment of our European staff, tariffs, the speed of moving goods – it could be disastrous for us, unless they take on board our practical considerations.”

The managing director of one etailer said: “I certainly haven’t had any interaction and I get the sense that I’m not alone in that. I think there has been a bit of a miss in terms of London Fashion Week and the BFC, it’s all well and good hosting a drinks reception at 10 Downing Street and saying fashion is a key leader in UK business but we’re not seeing any benefit of that in terms of getting ahead of other industries. Brexit is going to hit fashion hard in the second half (of the year) when prices go up and the customer starts to feel the pinch.”

Andrew Shapin, chief executive of Long Tall Sally, which makes 70% of its sales overseas, said: “I’m not clear at all that the interests of the UK business community are what are first and foremost in the minds of the negotiators at this point. I’m confident that we will find a way to serve our customers in whatever way we can, but it is worrying.”

The BRC has attended several meetings and roundtables with the Department for Exiting the European Union and other government departments to present the priorities for the retail industry ahead of the negotiations. It has argued that the immediate priority is “to guarantee a continuation of tariff-free trade on all products traded between the UK and the EU”.

But on Monday, a spokeswoman said it would not become clear whether retailers’ views have been taken into account until the negotiations have taken place.

Adam Mansell, chief executive of the UKFT, which represents the British fashion and textiles industries, called for more clarity from the government on what it has planned: “There are still a lot of unanswered questions surrounding Brexit and triggering article 50 does not necessarily solve any of these issues. We don’t know what will happen in terms of imports and exports, intellectual property, regulatory frameworks and several other issues.

“We can carry on carrying on, but we need more certainty on how to proceed.”

The finance director of one womenswear multiple, who did not wish to be named, said the drop in the value of sterling since the Brexit vote last summer remained his primary concern: “Everything retailers buy from the Far East is in dollars and the cost of raw materials has gone up by 20%. Even getting product into the [UK] is more expensive – everything’s being squeezed.”

However, he was positive the UK market would improve: “I do think there will be bigger issues than Brexit around the whole of Europe and the world, if you look at what’s happening in the French elections and with Trump in the US. It’s been a tough year but I do think that slowly the pound will start to get stronger.”

Meanwhile the managing director of one womenswear multiple said it may be too early for the government to discuss its plans with the industry: “I don’t believe they can be even ready to start consulting with all affected parts of industry at this early stage. Clearly they will not want to ‘show their hand’ too early in negotiations which must be why they are resistant in sharing information and possible scenarios at this stage.”

He added: “As soon as they are in a position to do so then retail will need a seat around the table to understand and then influence both the detailed legislation and timing of changes and I think that will be led by the larger retailers like M&S, Arcadia, Tesco, Next, Asda as they will have the resources and influence due to their scale to represent the retail industry as a whole.”

Drapers submitted the results of our nationwide survey of fashion retailers and brands to an inquiry by the culture, media and sports committee on the impact of Brexit on the creative industries at the end of last year. Read more the results of the survey here.

Readers' comments (1)

  • Retail needs to stop flapping. It's their version of the Millennium Bug. BREXIT is only a problem if you make it one.

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