The United Kingdom’s exit from the European Union does not only affect the entertainment industry and labor but causes fashion brands to contemplate its future and their market base.
The fashion industry is one of the industries to be affected by Brexit, reports Business of Fashion. Not only is employment an issue but funding and pricing as well.
One impact of the UK’s leave from the EU would be on foreign employment. According to the Business of Fashion, a large percent of the workforce in fashion industries is composed of foreign employees.
How these foreign workers would be able to maintain their jobs or how other workers would be recruited would pose a challenge with the impending loss of the free movement of labor. To add to that, without the free movement of goods too, products from the UK such as textile goods would be subject to trade agreements, quotas, and tariffs—12% tariff in duties to be exact, says the fashion news site.
According to the outgoing chief financial officer of Burberry, the company will have to mitigate customs costs incrementally where it is possible. Prices may also be raised due to the fact that the pound has suffered a devaluation.
Foreign visitors may also decrease and they are credited by designer Anya Hindmarch behind the boost in sales. Her Italian suppliers are also worried by UK’s withdrawal but are determined to keep working together.
Lastly, without the EU, funding for fashion institutions such as the British Fashion Council and the Center for Fashion Enterprise would also disappear. It is unknown if the millions of euros that will be lost will be covered by the government.
A soft Brexit will be much more favorable to the industry than a hard one. Article 50 is scheduled to occur this year, late March.
