Fashion counts costs of Brexit arrangements

Uncommonly exposed to red tape and restrictions across the English Channel, the UK’s £35 billion fashion and textile industry is feeling the effects of its situation.

What it means:
Despite no tariffs, operational costs to businesses have increased. The short-term problems are delivery delays and higher costs of returns – at a time when customers are using e-commerce more and returning more. In the longer-term, the lack of provision for creative workers and travel in the industry will diminish its competitiveness.

At large, the industry has published an open letter to the government, in which it criticises the done deal’s “gaping hole where promised free movement for goods and services for all creatives, including the fashion and textiles sector, should be.”

Tariffs and carriers

• The problem isn’t the much-feared tariffs that the UK-EU deal avoided so much as the additional costs of administration and carrying – some brands are reporting carrier fees (per item) that exceed what tariffs would have cost.
• Worryingly for brands, customers are complaining of duty or tax bills arriving along with their product, while brands themselves are dealing with tariffs paid on returns. With returns now a key aspect of the e-commerce experience, finding a source of profit will be a key priority.

Delays are hurting

• Delays are mounting up, with 20 of 57 brands with direct sales channels in the UK or Europe included in the Vogue Business Index are warning of delays, though as both markets accustom .
• Rules of origin are a particular headache expected to continue over the long term, especially for the many goods manufactured outside both the EU and UK.

^{[Image: Fashion Roundtable]}