International trade is crucial for the success of apparel industry as it emerges from the pandemic and Brexit effects, says a new report by UK Fashion and Textile Association (UKFT). The report states, though 2021 is likely to be a challenging year for the UK fashion and textile industry. It will also be year of hope. Businesses in UK will navigate lockdown and resume commercial operations as the country finds a way to work out Brexit realities.

The report titled ‘Business Outlook 2021’ was produced in collaboration with Smart Currency Business and UKFT. It shared valuable insights on what the year ahead looks like for UK fashion businesses, implications of the Brexit deal, considerations for protecting the businesses against the pandemic and more.

The report urges UK companies to remain vigilant with existing wholesale customers and agents, as many of them have been substantially weakened in 2020. The same could also apply to some factories. Pricing will be especially sensitive in 2021 and 2022 as consumers can see the price of almost everything, it adds.

The report further urges companies to use credit insurance as a tool to protect their business against a loss incurred due to insolvency, protracted default or political event, and subsequent non-payment of an invoice. It adds, insurer appetite for the fashion and textile sector has been low, given that clothing sales decreased by more than 25 per cent in 2020. However, insurers are now seeing a small bounce back, with March 2021 showing a 5.4 per cent increase on the previous month and a 1.6 per cent growth against February 2020.

The report concludes, availability of physical retail space in 2021 and 2022, in prime city centre sites could be a good opportunity for those looking for a central site or to run a pop-up. However, UK may become less attractive as a retail destination if the government does not reverse its decision to cancel the VAT refund scheme.