Procurement professionals in the British fashion industry face major challenges in the event of a no-deal Brexit, according to the British Fashion Council (BFC). This week, they warned that such an outcome would cost the sector up to £900 million due to tariffs alone.
When other post-‘no deal Brexit’ expenses are taken into account, the figure is likely to climb even higher.
While procurement teams will be working to achieve cost reductions through optimising sourcing savings, robust category management, and meticulous tail spend management, their efforts are likely to be undermined by a ‘no deal’ outcome.
The resulting switchover to World Trade Organisation rules and the tighter controls on international shipping that will ensue have the potential, the BFC warns, to hamstring the UK fashion industry.
As a result, the BFC is requesting stimulus funding to keep the industry, which contributes around £32 million a year to the UK economy, globally competitive after Britain withdraws from the EU.
The industry, which currently employs approximately 890,000 people, relies on export revenues as well a global supply chain and an equally global talent pool and will face many challenges if no deal is secured before 31st October.
In a statement, the BFC said: “We urge the government to seek a deal with the EU that would guarantee the healthy and steady growth of the fashion industry.”
Fashion designers are preparing to display their spring collections to purchasers and media at London’s Fashion Week, starting on 13th September. They are uncertain about how to manage challenges such as raised prices caused by new trade tariffs and new logistical complexities when transporting components between Britain and continental Europe.
Procurement teams in the UK fashion industry will not be alone in striving to meet these challenges – their colleagues in UK manufacturing face similar issues as 31st October draws closer, with manufacturing output declining at the fastest pace in over seven years last month.