With Brexit extension, fashion companies seek clarity
With Brexit extension, fashion companies seek clarity

retail

With Brexit extension, fashion companies seek clarity

On Thursday the UK was granted a six-month extension to its acrimonious European divorce, which so far has eliminated any immediate threats for companies of a no deal scenario.

Joy Parkinson, who runs a Bury-based company selling natural beauty products, told the BBC Brexit will be challenging but not "insurmountable."

"We've been buying additional stock of the lovely fragrances we buy in from Europe, to make sure we were covered if there were issues around ports and blockages. We were anticipating that some of our partners in European markets might have wanted to buy extra stock, but that scenario never materialised."

"We've not overbought, so we've been fairly sensible and fairly pragmatic, we've not bought six months, 12 months of additional material, so we've managed the cash flow fairly pragmatically."

Negative impact on businesses

Christine Lagarde, head of the IMF, warned this week that businesses and investors will remain hesitant in the coming months and that prolonged uncertainty would have a "negative impact".

Speaking at the World Bank and IMF Spring Meetings in Washington, Ms Lagarde said: "If there was a prolonged uncertainty, we can suspect that the impact on confidence would continue because, you know, whether you're talking about investors, whether you're talking about decisions as to where to expand where to set up how to organise a supply chain, people are going to wonder, you know, what comes next and and how will it settle?"

Earlier in the week, the IMF warned that no deal would cause the UK economy to shrink, echoing the scenarios published by the Government and the Bank of England.

No deal Brexit to cost fashion companies over 1 billion pounds in tariffs a year

In the case of a no deal Brexit, Richard Lim, chief executive of analyst Retail Economics, told the Evening Standard: ‘Hard Brexit — where existing trade deals disappear, and designers, retailers and manufacturers would have to pay to trade with the EU — would mean clothing and footwear tariffs of about 11 per cent, or just over 1 billion pounds more each year.’

Photo Brexit Mural (Banksy) 03, source Wikimedia Commons; Article sources BBC and Evening Standard