How Brexit could change the fashion industry

This weekend the United Kingdom coldly welcomed a marginal “Brexit” majority victory.

This is a result that will see inevitable and drastic changes to the economic welfare of the country. It was only seconds after Sunderland revealed they voted in favour of Leave that the value of the pound plummeted, now at its lowest in over thirty years.

The fashion industry in the United Kingdom contributes greatly to its economy - around 26 billion pounds in 2014 alone. It has created around 555,000 jobs within our borders. The British fashion industry is a pretty big team player, allowing the UK to further flourish and prosper. So how will the Brexit vote affect its ability to continue doing so?

It was inevitable that the value of the pound would decrease. Currently sitting at 73 pence against the dollar, this is the worst value we have seen in decades and major repercussions are likely to follow. Overseas production provides a cheap alternative to “Made In The UK” garment manufacturing, which allows small businesses to thrive and appeal to a more to a common, everyday audience (compared to luxury brands).

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These “Made In The UK” companies that make a lot of sales abroad could prosper from this devaluation. If their costs are in pounds, but their revenue is in euros and dollars, they can buy back their pounds now at an increased rate.

However garment manufacture in the United Kingdom is expensive, which is why you pay more money for clothes from bespoke British-made companies who appeal more to the upper, wealthier classes. And even their prices could see a rise as most of their garments are produced within the EU, especially Italy.

Your more affordable clothes are made in places such as Vietnam and China, but trading pound to dollar could see the once cheap production prices rocket. Inflation within the United Kingdom would also mean that the cost of production here would also soar. This would leave companies little choice but to pass this cost onto the consumer. In short? Your clothes are going to cost more.

But it’s not only money the industry will lose. It’s likely to take a hit in employment too. Fashion’s skilled workers come from all over Europe - Britain, Belgium, Spain, Sweden and so forth. What will happen now we have lost the right to move freely throughout the union?

It’s still not clear how free movement and immigration is going to work post-Brexit but we can assume visas will need to be held by all. The cost of visas to live and work in Britain - and for Brits to work in fashion abroad - isn’t exactly cheap, possibly driving these talents to stay within their home countries or elsewhere within the EU.

With a weaker pound, tourism to the UK is likely to become more affordable. Euros and dollars can buy people more pounds to spend here than before. On the surface this seems exciting - loads of tourists spending money in our cities and feeding into the economy! But national brands will need to up their prices to compensate for their losses and international brands are also likely to up their prices to further economic gain from this sudden crash. Everything in Britain, even for those who come for a holiday from abroad, is probably going to become more expensive, and suddenly we can’t just hold out for tourist spending.

So many top fashion designers are EU immigrants to the UK - take Mary Katranzou for example, who moved from Greece to study at Central Saint Martins and is now an incredibly successful and fashion designer not only in Britain but worldwide. The future of the fashion industry is in the hands of those who are currently studying it, but they’re going to take a blow too. The EU funds fashion education and universities in the UK; they invest in research and innovation.

Frances Corner, head of London College of Fashion, told Business Of Fashion “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” - and not least for London, but for Britain.

We can’t be completely sure what happens next. We know that for the next decade or so it’s going to be hard, should Brexit follow through. It took us eight years to regain the value of the pound after the recession and in less than an hour it dropped straight back down. We face the impending threat of losing skilled workers - or never being able to meet them here in the first place; we face possible increased trade tariffs; we face gaps in profit being placed at the end of the consumer and we face mass uncertainty for not only the future of this industry, but for the whole country.

How Brexit could change the fashion industry

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