Not long before the latest fully digital London Fashion Week kicked off on February 19 – with a scaled-down schedule reflecting the ongoing impact of the pandemic on the sector – there were more than 450 industry leaders, including designers such as Paul Smith, Katherine Hamnett and Roksanda Ilincic sent an angry letter to 10 Downing Street.
In it, the signatories claimed that the new Brexit trade terms negotiated between the European Union and the UK could jeopardize the survival of hundreds of fashion companies that were “disregarded” by the last-minute deal. The local industry, so the letter, may be confronted with a “decimation” due to the redrawn geography of Europe.
Fashion “contributes more to Britain’s GDP than the fishing, music, film, pharmaceutical and automotive industries combined,” says the letter addressed to Prime Minister Boris Johnson and organized by the Think Tank Fashion Roundtable.
“The agreement with the EU has a loophole in which the promised free movement of goods and services for all creative people, including the fashion and textile sectors, should exist.”
Even Samantha Cameron, the wife of former Prime Minister David Cameron – who chaired the 2016 referendum that led to the UK’s decision to leave the European Union at all – said in a BBC radio interview that her contemporary fashion label, Cefinn, was going through “teething problems.” “after Brexit.
“If you bring goods into the country from outside the UK and then try to sell them back to Europe,” said Ms. Cameron, “it is very challenging and difficult right now.”
It is no surprise that the majority of the British fashion industry continues to rail against Brexit. For the past five years, domestic start-up brands, international luxury houses, leading London design schools and rural textile manufacturers had raised concerns about whether Britain would maintain its reputation as a creative and commercial hub for fashion after Brexit.
More recently, in the last year, as the time drew nearer December 31st, fears about the possibility of no agreement grew, bringing new ones at a time when the UK economy was already under pressure Taxes on merchandise and stalled ports with them in the pandemic.
This scenario was avoided in the eleventh hour. But as the UK adapts to its new position outside of the bloc, a chorus of voices from across the fashion industry are expressing increasing concern about what to do next.
Take John Horner, CEO of Models 1, a London-based modeling agency that represents Naomi Campbell and Lara Stone. For decades he has been booking models for runway shows or magazine shoots abroad with less than a day’s notice, with at least a quarter of all income generated from European jobs. However, free movement between the UK and the EU ended on January 1, which resulted in new visa requirements. Mr. Horner believes the extra layer of paperwork and costs will have a dramatic impact on the business.
“Models now need one of 27 visas to work in European countries – it’s going to be an ongoing administrative nightmare,” Horner said, noting that the UK creative industries are banding together to put pressure on the government to negotiate visa-free work arrangements for artists and professionals. “I think we will also see a number of international players avoid London as a filming location and choose European cities instead.”
According to the industry association Walpole, 42 percent of all British luxury goods are exported to the EU. Now British fashion brands are grappling with piles of new customs procedures and taxes where a wrongly ticked box or stroke of a pen can mean time-consuming delays or fines.
Jamie Gill, CEO of Roksanda, said the fact that the deal was closed in the final moments of 2020 meant no one had time to adjust to the unfamiliar bureaucratic hurdles and penalties, from brand employees based in the UK to to their small artisan suppliers and manufacturers in Europe.
“There is so much to learn about new rules for us as well as for large logistics partners like FedEx and DHL,” said Gill. “Right now there are delays in every way, everyone is doing something wrong and it costs both time and money. The industry breathed a sigh of relief when no business was avoided and we ran out of tariffs. But the pandemic means it’s pretty tough out there and every brand wants to get goods to the shop and online as soon as possible. “
Last week, the British Fashion Council, the industry’s lobbying body, said it was “live and ongoing discussions” with government officials about travel restrictions and working with designers and brands to help them familiarize themselves with paperwork and the customs of understanding rules on rules of origin for products.
Not to mention import issues. Many EU consumers who buy goods from UK fashion retailers’ websites receive customs and tax bills for 20 percent or more of the cost of the goods, and UK customers who shop in the EU are also charged additional bills.
Adam Mansell, head of the UK Fashion & Textile Association, warned that it is currently “cheaper for retailers to write off the cost of goods than to take care of everything, either abandoning them or possibly burning them. A lot of large companies don’t have this under control, let alone smaller ones. “
Another blow to many fashion brands and retailers is the UK government’s decision to end its retail export program on January 1st. The program, which allowed international visitors to reclaim 20 percent of VAT on their purchases, had long allowed wealthy foreign tourists to make expensive purchases tax-free in the UK. Now luxury power players like Burberry, Harrods and the Oxfordshire Bicester Village shopping center believe the new laws will reduce the UK’s attractiveness as a luxury shopping destination at a time when such bait is most needed.
In December, 17 luxury and retail companies estimated that planned £ 1 billion investments in infrastructures such as branch expansions and distribution centers would be lost due to lower demand as buyers went elsewhere, something not just felt by ordinary British marquee luxury names.
“It is wrong to see this as a problem that only affects the West End. Over £ 500 million of tax-free shopping is happening locally, including Manchester, Edinburgh, Birmingham, Glasgow and Liverpool, ”said James Lambert, vice chairman of Value Retail, which owns Bicester Village. The outlet center, which is supposed to look like a small town home to Burberry, Gucci and Dior, among others, has become one of the UK’s most popular tourist attractions.
“The impact will have an impact on the entire retail and hospitality supply chain across the UK,” said Lambert.
Still, not all companies are so pessimistic. While some UK silk and thread suppliers said the feedback from their European customers was that they would buy from European suppliers instead of accepting additional costs and hassle, Brian Wilson of cloth maker Harris Tweed Hebrides felt the short-term hurdles were nothing what could not be overcome.
“We are not in the same position as grocers or those with perishable stocks who are clearly having a terrible time,” he said.
Harris Tweed is a durable, all-weather textile handwoven in their homes by islanders in the Hebrides. While 14 percent of the fabric is exported to fashion makers in Europe, Wilson said the American, Korean and Japanese markets have remained resilient and that trade with these countries has remained stable in order to minimize the Brexit disruption.
The cabinet office, which had not officially responded to the Fashion Roundtable letter by February 19, said it had offered helplines, webinars and support for companies in the fashion industry. However, this may not be enough for companies already decoupling from ongoing lockdowns and a year of pandemic.
Katherine Hamnett, the veteran fashion designer long known for her simple speech, summed up the situation for her colleagues.
“Unless there is a radical overhaul,” she said, “British brands are going to die.”
