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Brexit hurts British fashion brands

The Brexit decision is looming large over the UK and the EU, with a great deal of uncertainty around important factors such as trade agreements, EU funding, and the flow of people between Britain and the rest of Europe.

Fashion and retail companies have seen solid sales since the decision. However this is often offset by a higher cost of raw materials and other imports. Fashion manufacturers have many suppliers in the EU, and argue that it will be impossible to fulfill all their needs from within the country. The weaker pound therefore makes material costs higher, driving up the cost of manufacturing and causing many companies to raise their prices. This then minimizes the sales benefits of having a lower pound. It will become more difficult for British fashion brands to compete with other European ones because their material costs are now higher.

It remains to be seen whether sales offset the increased production costs, but there is potential for beneficial changes to the market. Departure from the EU may bring with it new tax incentives and deregulation that help fashion companies to operate and thrive. While there are challenges to overcome, there will also be opportunities to take advantage of.