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Weak pound is a strong point for UK

There are three kinds of people, said the comic George Carlin: those who can count and those who can’t.

This sentiment haunts me, partly because of the financial wreckage that tops the news reports, but also because of my relationship with the euro. When I lived in Italy just after it gave up the lira, the locals moaned about the new currency. I laughed, thinking them parochial fools.

The euro and the dollar were both about two thirds of a pound. But in December 2008, the euro drew level with the pound, and the dollar has spent 2009 surfing around 1.4.

For British companies importing fabric or garments from Europe, goods are more costly. But for British exporters, this could be a bonanza. The weak pound means 20% off for anyone paying in
euros: a fine time for our mills to push their tweeds and wools, and for British brands to drive their goods deep into the continent.

UK companies could reconsider manufacturing in the UK (listen up Burberry).

The trouble with selling clothing to Europe is its incoherence. There exists no chain of multi-brand shops that spans even Germany, France, Spain and Italy. Nor is there an agency that can sell and distribute a brand throughout the continent.

Probably the most effective way to make an impact there is to flog your brand to a US giant which has the infrastructure. Good luck.

To sum up. US goods are not so cheap to buy, but margins have recovered a little if you sell there. EU goods are more expensive, but you can make money if you sell there. British goods are more affordable for Americans and Europeans.

So everyone should buy British, even the Brits. Crisis sorted. Lovely jubbly.

  • Oliver Horton is a fashion writer and trends commentator

Readers' comments (1)

  • SDR

    Whilst the UK members of Drapers Online may feel that a weaker Pound is bad for imports and good purchased outside the borders, I think that internationally it's a pretty strong currency.

    A lot of our clients are UK based, and with an effective exchange rate of approximately 15 to 1 on the South African Rand, we've noticed that coupled with smaller budgets, our shoot schedule is busier than ever before with UK companies looking to maximise their marketing budgets.

    I imagine it's a case of (as per my personal example above) maximising your currency per spend where you can. British and European companies can get a lot more shoot time, better models and locations with us because their currency buys more here than at home. From my side, I know where to purchase equipment (cameras, lighting, etc) as I utilise the weaker Singaporean Dollar to my advantage, even air freighting in equipment works out cheaper.

    I think these times, coupled with smaller markets is all forcing us to be more innovative and careful with our spend. Which at the end of the day may not necessarily be a bad thing.

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