Even if 90% of the British fashion designers were against the “Leave”, more than 51% of British citizens chose this option, Prime Minister David Cameron resigned and Stock Exchanges all over the world reached their historical minimum.
As I anticipated in one of the latest posts (“What about Brexit in the fashion world?”), the survey conducted by the British Fashion Council showed that many designers openly lined up with the “Remain” front and the result of the referendum of the 23rd June caused strong irritation and shock.
The British Fashion Council is a non-profit organization that promotes British fashion in the world and it has the district of London and the European Regional Development Fund as its main historical partners.
Fashion in UK is a very important economic and business sector that accounts for £ 26 billion (as the data from 2014 show). That’s why the very first official declaration after the referendum came from Caroline Rush, CEO of the British Fashion Council: “ As a non-profit organization that promotes British fashion industry in the world, we constantly work with many governmental subjects to make sure that UK continues to be a leader concerning fashion and creativity industries. We will continue to do so with our local and international partners. Now that Brexit won, our role is that of updating the Government about our priorities and the designers about the future repercussions of our exit from the EU.”
But, what about the importance of UK in the international fashion system?
Great Britain, starting from the city of London, is considered a key market for fashion and a place of avant-garde in terms of trends.
We have also to consider that London is a cosmopolitan city that attracts tourists, and also shoppers, from all over the world: in 2014 the city welcomed 17,4 billion tourists.
Many of the most important players and actors in the fashion system are settled here, from fast fashion (Topshop and Asos) to luxury (Burberry, Alexander McQueen, Stella McCartney and so on). Just to make you an example Burberry reacted well to Brexit, because at the end of the referendum day its title accounted for +1,53%.
Speaking about luxury fashion, the French group Kering, that owns also Alexander McQueen and Stella McCartney, declared : “As a global business that evolves in a global market, Kering has a long history of adjustment to changes, consisting of many successes.” So they state that, even if it is too soon to comment on the implications of the Brexit on the luxury market, they will surely rely on their adjustment ability to this new context.
Yesterday the data showed this situation: Kering (-7,39%), Lvmh (-6,54%), Tod’s (-7,82), Prada (-3,51%), Ynap (-9,70%).
What about Italian fashion system after Brexit?
The United Kingdom is the fourth client for Italy in terms of textile-fashion Made in Italy. According to the data of SMI (Sistema Moda Italia), in 2015 Italy exported to UK 1,8 billions Euros of textile-fashion products and imported them from UK for about 431million Euros.
But, as I said before, it is very hard in this moment to understand and forecast the repercussions of Brexit in the fashion system. Claudio Marenzi, President of SMI, considers the exit of UK from the EU as a potential opportunity for Italy because “ London, as Paris, represent a destination of transit to other countries and the impact on our industries, if there is one, will be very limited.”
In addition, it could bring some advantage because “ We lose a competitor that in the past and in the present has opposed our industry: from the battle about the Pakistan productions, to the recognition of China as a market economy, to the “Made In” issue.”
On the other side, Carlo Capasa, President of Camera Nazionale della Moda Italiana, is more cautious in his evaluations: “Brexit is a process that will take at least two years, and we wish that it will be possible to find agreements such as the ones we signed with Norway, that allow to maintain close commercial relations. We are worried as well, that the EU will react very firmly to the exit of the UK, bringing back to the top customs duty. We hope that what happened to the UK represents a warning for Europe to implement a less rigorous politics and more respectful for the weaker classes, in order to increase the internal consumption. We think that a strong domestic market is necessary to be competitive worldwide.”
About the possible effects on Italy, President Capasa says: “We expect a reduction of exports to the UK and to the other countries that are more exposed to the repercussions of Brexit, and maybe a light increase of the exports to the non-EU countries. But also a decrease of the domestic demand and of the sales volume in Italy of the fashion industries, caused by the financial uncertainty and the possible restrictive measures of the Italian Government.
More in general, the negative effects forecasted by Capasa are : “A decrease in British consumption of about 1-3% per year. There will be difficulties on the exchange of workforce and transfers. The retail oriented European companies will manage their channels only locally and they will have problems in exchanging products. All the centers dedicated to creativity and formation (schools), that are great pole of attraction and strength for the quality of the human capital, could have problems because European people that work and study there will become non-EU citizens.”