Here’s what the UK’s shock decision to exit the European Union means for fashion and retail industries. WGSN reports
UK fashion and retail company shares are falling this morning as the news sinks in that the UK has voted to leave the European Union, 43 years after it joined the giant free trade bloc.
Asos, Burberry, Jimmy Choo, boohoo, Next, SuperGroup, Debenhams, Sainsbury’s and more in the UK saw their share prices in the red with major double-digit dives for some.
Both Marks & Spencer and Next this morning said they would not making any official statement on the UK’s exit from the European Union. The same message came from Superdry brand owner SuperGroup who had previously said it was not unduly concerned over a vote for ‘in’ or ‘out’… “it will be business as usual,” a spokeswoman told WGSN.
Shares markets around the world are also falling on the prospect of European and global economic instability and the UK currency, the pound, hit its lowest level against the dollar in several decades. Major European stock markets were also a sea of red.
The shock result, which went against the final exit polls may have come down on the side of leave but also showed a UK deeply divided with almost as many people voting in as out.
UK prime minister David Cameron said he would resign by the autumn with a new leader set to negotiate with the EU just how and when Britain leaves in order to enact “the will of the British people,” which “is an instruction that must be delivered.” That means out is out.
He also said the UK will prepare for the tough talks with the EU to try to forge trade deals that will retain favourable access for UK goods in European markets and vice versa. This is likely to take several years with all EU rules and rights still in force until it happens.
The fashion and retail sectors came out heavily in favour of Britain staying in the EU with key cities, led by London actually voting to stay in.
In recent days, former CEOs of giant chains including Tesco, Sainsbury’s, Asda, Morrisons, M&S and B&Q all came out and said prices of goods, including clothing, would rise if Britain quits the EU. The USDAW retail workers union also warned against a Brexit vote.
The chief executive of Hennes & Mauritz AB warned against the effects of the UK’s possible exit from the European Union, saying economic uncertainty around the referendum may have already affected the Swedish fashion giant’s profit.
“The clothing market in the UK has been poor during the first half-year in general,” he said, adding it may be in part the result of “uncertainty connected to Brexit.”.
Persson said a Brexit would not only affect the UK negatively, but also the EU and world economy. “I don’t think it’s a good thing,” he said.
Earlier this week Burberry warned staff of the “unnecessary economic consequences” of Brexit in a memo. While chief executive Christopher Bailey and chairman Sir John Peace did not explicitly tell staff to vote Remain, they said Burberry would be “stronger and more prosperous” in the EU.
“We face a period of ambiguity that could see companies and customers alike delaying significant decisions relating to investment, employment and travel,” they said.
“Britain and Burberry would be stronger and more prosperous remaining in the European Union.”
Giorgio Armani had also urged Britain to stay in the European Union, warning that the bloc would be worse off without England’s influence on fashion and design.
“I’m in favour of the British staying in Europe,” the Italian designer said in Milan, where a week of menswear shows wrapped up on Tuesday with the unveiling of Armani’s main S/S 17 collection.
“The island is part of Europe and I have always seen England as the avant-garde part of Europe– the bit that moves, that develops, always the first to do something eccentric and to give space for art.”
A recent survey of UK-based designers by the British Fashion Council found that 90% wanted the country to stay in the EU, mainly because of concerns that Brexit would make it harder to export their wares and that international student numbers could fall due to tighter visa restrictions.
Vivienne Westwood, one of the innovative designers Armani perhaps had in mind, said it would be “absolutely tragic” if Britain were to leave the EU.
“I am disgusted that we might leave,” said the 75-year-old, who made her name by putting punk style on the catwalk. “I’m ashamed of what is going on in England. It is awful.”
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