With strict limitations on freedom of movement, London could lose its status as one of the world’s fashion capitals.
The U.K. officially exited the European Union on December 31, after rushing to finalize negotiations around the post-Brexit deal before the end of its transition period. This signified the end of a long and divisive era in British politics–yet is now proving to have significant implications for many businesses in the U.K. and Europe, in particular the fashion industry.
Fashion is one of the hardest hit industries in the U.K. at the moment, due issues such as limits placed on the free movement of goods, as well as the withdrawal of the VAT retail export scheme. In short, some brands are warning that they may have to burn clothing that has been returned by EU customers, because it is cheaper than bringing them home to the U.K., while others are worried they will lose business as international visitors will no longer be able to shop tax-free.
One particular issue driving business out of the U.K. are the new limitations on freedom of movement, whereas EU citizens were previously able to move freely within the region whether for travel, work, or to relocate entirely. As the U.K. has left the EU, fashion creatives now have to go through complicated visa processes in order to work in the U.K., while British creatives seeking to work in the EU will have to obtain visas from each individual country they plan to work in. Freedom of movement also applies to goods, which means that custom duties, taxes, and tariffs are now payable on items like fashion samples, which are subject to full duty if they are in a position to be resold.
Tamara Cincik is the CEO of Fashion Roundtable, a fashion think-tank that acts as a go-between for the fashion industry and policy leaders. Over the phone, Cincik explained to Mission that the fashion industry was unable to prepare for Brexit as the final post-Brexit deal was negotiated only a week before the end of the transition period, and that the deal doesn’t work for the industry.
“Everywhere I look across our complex, innovative and highly successful U.K. fashion industry, I see perfect storms and tsunamis, unless we act,” she says. Cincik has since started a campaign to encourage the British government to save the industry, and presented them with an open letter last week highlighting the key issues, impacts, and unforeseen consequences of the post-Brexit deal. Signed by 451 signatories across British fashion, it asks that the industry be granted a seat at an urgent roundtable meeting with ministers, to work together and create solutions.
When asked if London could potentially lose its status as one of the world’s major fashion capitals, Cincik’s answer is simple: “Yes.” She believes that although “no one benefits if all of the industry faces distribution challenges,” international visitors looking to splurge on luxury fashion will now prefer to shop in Paris or Milan over London due to the benefits of tax-free shopping, while other regions will capitalize on new opportunities. Her predictions are that Portugal and Lithuania will become manufacturing hubs, France and the U.S. hotspots for creatives, and the Netherlands the home of streetwear. Due to the fact that the fashion industry relies heavily on last-minute bookings and EU talent, many EU-based brands, such as Zara, H&M, or Mango, may also find it easier to arrange shoots within the EU rather than the U.K.
The British government has not yet responded to Fashion Roundtable’s open letter, though they have begun a dialogue. “Government U-turns” are what Cincik says she wants to achieve in order to save the industry, and hopes to “escalate the casework and keep pushing for our meeting” by urging people to write to their local MPs.
U.K.-based readers can use her template letter to contact their MPs here.
Image credit: Burberry
