London – With the EU referendum just a number of days away, both sides
‘Remain’ and ‘Leave’ are pushing hard to make their voices heard. As the
rest of the world holds its breath and waits to see which way the pendulum
will swing on Thursday, June 23, several prominent members of the UK’s
fashion industry voice their thoughts on the matter. Industry leaders
including the likes of Vivienne Westwood, Ashley Williams, Jonathan
Anderson and Claire Barrow have all publicly voiced their support for the
staying in the EU, while other designers such as Christopher Raeburn,
Sibling and Daniel W Fletcher used their catwalks shows during London
Collections: Men (LCM) as platforms to show their support. A survey
conducted the British Fashion Council revealed that of British fashion designers will
vote to stay in the European Union on Thursday, versus the 4.3 percent who
will vote to leave.
A photo posted by Vivienne Westwood
(@viviennewestwoodofficial) on May 28, 2016 at 3:48am
PDTHowever, with the majority of the polls showing a neck and neck race for
both sides, a Brexit could still be on the cards, which makes us question,
what effect would it have on Britain fashion industry? FashionUnited has
compiled a list of the 5 effects a Brexit is likely to have on the fashion
industry.Devaluation of the pound
The UK fashion industry is definitely a force to be reckoned with –
contributing 26 billion pounds to the economy in 2014. Unsurprisingly, it
is seen as one of the UK’s most important exports industries, accounting
for a total of 7.5 billion pounds in 2014, according to FashionUnited’s
statistics. However one of the most immediate effects of a Brexit is likely
to be the depreciation of the pound. Debate concerning the EU referendum
has already had effect on the strength of the British pound, which
depreciated to a seven-year low against the dollar before climbing up again
this week. HSBC Holdings has predicted that the value of the pound could
drop by as much as 20 percent if a Brexit is voted through, which could
pose a very significant effect on British fashion businesses that outsource
their production or source fabrics aboard. Fashion companies which produce
their clothing abroad in countries such as Vietnam, Cambodia and China,
where they pay in dollars, would have to pay more as a weaker pound would
see their manufacturing costs soar sky high.A photo posted by Philip Ellis (@philipjellis) on Jun 2, 2016 at 1:13pm
PDTEnd of free trade, posing a ‘serious risk to growth’
Furthermore, exporting and importing fashion goods is likely to become even
more difficult as new trade agreements will have to be made in the case of
a Brexit. The UK currently benefits from favourable trade regulations with
over 60 countries and in order to maintain its relationships,
it will have to negotiate new agreements with both European and non-EU
countries. Although those in favour of leaving the EU counter that Britain
would likely be able to negotiate favourable trade agreements, similar to
Norway and Switzerland, a number of countries have warned that there “will
be consequences” in the case of a Brexit. UK fashion brands may be have to
pay increased taxes and fees to ship and sell their products abroad and
foreign investors are likely to be deterred.
However, export is cited as one of the key components for fashion companies to be
able to reach over a 100 million pounds in sales, and any limitations
placed on exports are likely to lead to a restriction in terms of growth,
especially for small and medium UK fashion companies. A Brexit would also
make it increasingly difficult for British fashion businesses to expand
abroad and build a name for themselves. The G7 leaders recently issued a
joint declaration, in which they stated that a Brexit would pose a “further
serious risk to growth.”A photo posted by Christopher Ræburn
(@christopherraeburn) on Jun
13, 2016 at 8:26am PDTClothing price hike and drop in consumer confidence
If the pound continues decreasing in value if the Brexit is voted through,
it also means that the price of apparel, accessories and footwear is likely
to increase. Why? A weaker pound, as highlighted above means that fashion
companies alike will have to spend more money to produce the same amount of clothing.
In order to recuperate those costs, businesses will be forced to charge
more for the final product. “The cost of a weaker pound impacts all
retailers, so it will be passed on to consumers,” said Brun Monteyne,
senior analyst at Sanford Beinstein, to the Financial Times. Although most
British fashion companies will have hedged their currency exposure for the
next 6 to 9 months, prices are still likely to be affected in the long run.
This price increase is likely to have a significant effect on UK consumer,
who have enjoyed low inflation and little to no price increases for the
past six years. Consumer spending has already declined over the past month
in the run up to the EU referendum, which has taken a toll on which is likely to continue
to drop in the face of a Brexit.A photo posted by Claire Barrow (@claire_barrow) on
Jun 6, 2016 at
7:49am PDTEducational institutions would miss out on funding (as well as foreign
talent)Another blow the fashion industry would be handed in the face of a Brexit
would see its educational institutions suffer. The European Regional
Development Fund (ERDF)
has granted millions of pounds in funding to London fashion schools in the
form of research funding and initiatives which support innovation in the
industry. The London College of Fashion receives significant financial
benefits from the fund and uses its to sponsor initiatives which help
graduates realize global opportunities, while balancing commercial
potential with innovation. The ERDF also sponsors the British Fashion
Council (BFC), the organizer behind London Fashion Week, London
Collections: Men and other key sponsorships like the NEWGEN recipient and
the BFC/GQ Designer Menswear annual fund.In addition, a Brexit would make it even more difficult for international
students to study in the UK. EU students currently pay the same rate as
British students to attend prestigious fashion schools, such as Central
Saint Martins (which charges approximately 10,000 pounds for a MA Fashion
Course). But leaving the EU would likely change that and see European
students having to pay the same as other international students – a cost
which may scare off many prospective talents from studying in the UK at a
great cost to the British fashion industry. Some of London Fashion Week’s
most celebrated and innovative designers, such as Roksanda Ilincic, Mary
Katrantzou and Marta Marques and Paulo Almeida, the duo behind
Marques’Almeida, are EU immigrants, hailing from Serbia, Greece and
Portugal. At the moment there are students from over 65 countries studying
at the Royal College of Art in London, a number which is likely to
drastically drop if the UK votes out of the EU. “At a time when London’s
affordability is already putting tremendous pressure on our creative
sector, we need to be opening up to opportunity, not closing it down,” said
Frances Corner, head of London College of Fashion, UAL, to BoF. “There’s a
lot at stake in this referendum, and not least for London.”A photo posted by J.W.ANDERSON (@jw_anderson) on Jun 6, 2016 at 2:51am
PDTLoss of foreign talent and skills in the industry
One of the most potentially damaging blows a Brexit could deal to the
fashion industry could be the restriction of free movement. Many British
fashion designers and companies based in the UK employ European designers,
or have ateliers abroad where they employ talents – business structures
which could be damaged if European citizens lose the right to freely love
and work in Britain and vice versa. For example, Christopher Kane, a
Scottish designer based in London, label is owned by fashion conglomerate
Kering. Although a number senior member of staff from Kering reside in
London, such as its chief executive officer François-Henri Pinault, the company itself is based in Paris, France. As
one of the largest, luxury fashion conglomerates in the world, Kering
ensured its designers have access to the best seamstresses and ateliers
across Europe. But with a Brexit the borders between Britain and the rest
of Europe may be closed.“All these amazing seamstresses from Italy, from
all over Europe, that have been working with us for five years … How much
would it cost for us to get them visas?” questioned Kane in an interview
with the New York Times. The answer for now remains uncertain as exact
guidelines of how the Brexit would occur have been shared.A photo posted by 1 Granary (@1granary) on Jun 6, 2016 at 9:35am
PDTTravelling abroad becoming more difficult and costly
In a similar vein to the previous effect, travelling between Britain and
Europe is likely to become even more complicated and expensive in the event
of a Brexit. Creative designers, such as Jonathan Anderson, who is based
in the UK but has to travel weekly to Spain to meet with his design team
for Loewe, is just one of many who will be faced with increased travelling
costs and restrictions. The same goes for fashion journalists who travel
abroad for each fashion week. Although the UK will push for UK citizens to
keep the right to work and travel freely in the EU, British travellers will
likely have to pay more for air travel, as a large chunk of the costs in
aviation, such as airplane leases and fuel, are priced in US dollars. With
the declining value of the pound, fares with British airlines are likely to
rise.Photo: Sibling at LC:M, website
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