According to JESSICA DOONAN of INVESTEC, the impact on the UK FASHION INDUSTRY will affect us too …
As we edge ever further into the murky waters of a post-Brexit world, many of Ireland’s business concerns have centred on the financial services industry and how we can best capitalise on financial giants looking to move from the UK to another European base. However, we’re also set to be impacted by the effect Brexit is set to have on the global fashion industry.
The most tangible early outcome of the shock vote was the tumble in sterling value, which for the savvy Irish shopper meant one thing – instant online bargains. In the wake of Brexit, London-based luxury fashion retailers such as Burberry, Mulberry and Jimmy Choo experienced a significant increase in sales to overseas buyers with the sudden comparative value to be had.
However, the longer-term outlook is bleaker. “Uncertainty” is the buzzword when it comes to any attempt to predict the consequences of Brexit, but the general consensus is that our clothing purchases from Britain look set to become a whole lot more expensive. Whatever trade deal the UK manages to strike with the EU, additional costs in the form of customs and duties look certain to become a feature of online purchases from our favourite British fashion retailers.
The UK is a global fashion powerhouse, but this position looks set to be tested in the near future. Britain is renowned for its exceptional fashion education and houses some of the highest-ranked fashion schools in the world. Restriction of movement will have a significant impact here, both from the perspective of European prospective students now facing visa bureaucracy and, of course, for British graduates who could previously travel easily to any of the European fashion houses to launch their careers. There are also a significant number of European citizens employed in UK fashion houses; the threat looming over their ability to work freely in Britain is undoubtedly a major concern for the industry as a whole.
Further worries stem from the need for Britain to negotiate new trade deals with every country it does business with. The fashion industry will have a particular interest in negotiations with countries such as China, Vietnam and India, all significant suppliers to UK retailers and designers. Easy trading access with the EU and US is also paramount in order for the British industry to remain competitive. The British Fashion Council has also expressed concerns about the protection of UK fashion designers and intellectual property rights post-Brexit. The EU legal framework currently in place is, in their opinion, “highly effective and efficient”, and the loss of this safeguard could increase costs substantially with the need to individually register designs.
As with everything Brexit related, it’s simply too early to predict with any accuracy the full impact on the fashion industry but it’s certainly shaping up to be a turbulent period as we await the negotiation outcomes.
Jessica Doonan is a Financial Accountant at Investec. To learn more about Investec, call 01 421 0000, or see www.investec.ie.
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