Press Release: Fashion Industry Concern At Government Inertia
10th February 2021
Fashion Industry concern at the lack of response from the Government to our open letter asking for an urgent meeting to discuss Brexit impacts and the very real threat of business decimation.
The fashion industry united in signing our open letter with over 455 industry leader signatories urgently requesting a ministerial meeting 8 days ago. The Government is yet to respond. We urge the Government to meet to discuss solutions to help save our industry before it is too late.
The fashion industry makes more than the automobile, film, music and pharmaceutical industries combined, contributing £35bn to UK GDP and employs almost 1 million people.
In comparison, the UK fishing industry employs the same workforce as a single high street brand, making just 1.4bn GVA (equivalent to what East London alone makes from fashion), yet has received £23m in government support for their exports. This indicates a clear prioritisation of one industry above another for reasons other than economic factors.
Our sector is at real risk of decimation by the Brexit trade deal and current Government policy. To reduce the negative impact to the industry, we are asking the Government to urgently meet so we can share solutions which will help save our industry before it is too late.
Following Fashion Roundtable’ Open Letter and #dontmakefashionhistory campaign we have seen many concerned business owners come forward to share their first-hand experiences and impacts of Brexit.
Kenneth Mackenzie, 6876: “My business is living with this every day and it is a nightmare. The shipping price increases, with long delays and VAT are making it unsustainable for internet order shopping. A shipment this week had to clear customs in the UK came via Belgium - Luton then ended up in Heathrow, taking 9 days for a 2 day service. The only viable business solution if I want to keep my brand afloat is to keep EU produced items, that I manufacture in Portugal, exclusively for my EU sales and not sell those at all in the UK, which is a loss to not only my UK sales and taxable income, but also my UK manufacturers, as I will inevitably have to increase my Portuguese manufacturing.”
Anna Foster, E.L.V. DENIM: “We have seen an immediate impact across the business. We have ceased shipping to Europe until we can resolve some of these logistic issues. It’s too costly, plus it’s too damaging for customers to have a bad experience at a time when retailers here are closed due to the pandemic. With our direct to customer sales (B2C) from our ecommerce platform, who are now subjected to 19-24% VAT before they can receive the goods. We are fortunate in that as our goods are 100% Made in the UK our goods are not subject to duty.
However, we have fallen victim to random amounts of ‘disbursement fees’ levied by local carrier offices. We were sent a breakdown of these fees per country by DHL. Firstly, I don’t believe these are necessary, and secondly, they seem to be random and we have no control over how much they are. For example, we were told that Greece did not have a disbursement fee, yet the DHL local office in Greece charged €60 euros as a disbursement fee. Not only that we can’t control the amount of fees the local offices charge. The customer in Greece should have had to pay ONLY 24% max of the purchase price, but she had to pay over 61% of the purchase price to have the items released. Funnily enough she refused delivery. We asked for a breakdown, but were told ‘we can’t control the local offices’.
On a wholesale level our European retailers are saying they can’t work with us anymore. DHL also tells us to refer to HMRC guidelines, which are frankly impossible to fathom and are only good if the other side (EU countries) uphold their side.”
Jenny Holloway, CEO Fashion Enter: “We have to order threads from Guttermann in Germany and normally it takes 5 days. Our latest order took 3 weeks using UPS. The original order was for £50 of threads, but because of the new VAT regulations being £134 as a minimum threshold for EU orders, we complied with that and over ordered at that amount. When it arrived we were charged an additional £44.85 by UPS for ‘additional paperwork’ and EU compliance. This thread is being used to make PPE. Just one order of cotton has quadrupled in cost and in escalated delays. Our Belles of London brand, which we make here at the factory and was doing well in the EU has seen sales go off a cliff for orders from Germany.”
Valery Demure, Valery Demure Showroom and Consultancy: “We are struggling with shipping samples back and forth. The documentation is taking so much of our time and small brands are struggling with added costs and delays. A client of mine used to send 18ct jewellery samples to London for €100 and now it is €400 for a small shipment. We are seriously looking at relocation to the EU after 27 years of business in the UK.”
John Horner, Managing Director, Models 1: “We are very concerned at the lack of response from the Government. Models are critical to every aspect of the fashion industry’s interface with its customers and this is managed on a global scale. It seems absurd that both the EU and the UK government put forward freedom of movement proposals for the overall creative sector and simply because they couldn’t agree, have walked away, putting many industry sectors in jeopardy. 30% of models represented by major UK model agencies are from the EU and 25% of income is derived from the EU. It is all at risk and work will be lost to UK plc.”
Paul Barnes, CEO Association of International Retail: “"As the Independent Office of Budget Responsibility has made clear, there is much uncertainty over HMT's figures on the decision to end the VAT Retail Export Scheme. Just a small drop in visitor numbers and spending would wipe out any VAT revenue HMT predicts from ending the VAT Retail Export Scheme and will lead to a significant net loss to the Treasury. With this policy estimated to cost around 40,000 jobs throughout the UK, we support the call from the Chairman of the Treasury Select Committee for an independent assessment into the full impact of this decision"
Jamie Gill, CEO Roksanda: “Although we are grateful to just retain zero-tariff trade, (which still came as a great surprise), the increased declaration process will cost us administratively. Immediately we are feeling the brunt of high freight costs and changes to EU VAT. It’s burdensome alongside the on-going impact of the pandemic and removal of VAT for our international Buyers”.
Tamara Cincik, CEO Fashion Roundtable: “What is taking the Government so long to answer our urgent request for a meeting? We understand there is a pandemic, but the Government has met with our colleagues in the music industry since signing the Brexit deal and we urge them to meet with us as well. Delays and silence are not a way forward for business certainty. This silence from the Government is deeply concerning and I hope that they commit to meeting with our stakeholders in the coming days, as they already have with our colleagues in the music industry. We urge them to show the same levels of concern and support for all aspects of business, creative industries and export brands.”
Note to Editors
Background
Fashion Roundtable’s Open Letter, signed by over 455 signatories, was presented to the Government on Tuesday 2nd February. A follow-up letter was sent Tuesday 9th February. Both letters request that we can organise an urgent roundtable meeting with the relevant Ministers for the fashion industry in the coming days, to work together and create solutions which will help save our industry.
The Open Letter has received cross-party parliamentary support, with signatories including Baroness Lola Young of Hornsey, John McNally MP, Martyn Docherty-Hughes MP, Lord Cashman CBE, Lord Foster of Bath, Earl of Clancarty, Baroness Bonham-Carter and Lord Taylor of Warwick.
The letter has also gained the support of industry leaders across manufacturing, retail, modelling, creative business, education, brands and journalism. Signatories include Dame Vivienne Westwood DBE (Vivienne Westwood), Jenny Holloway (Fashion Enter), Paul Barnes (Association of International Retail), Kate Hills (Make It British), Jane Shepherdson CBE (MyWardrobe HQ), Caroline Issa (Tank), John Horner (Models 1), Carole White (Premier), Nick Knight OBE (SHOWstudio), Zowie Broach (RCA), ASBCI, Patrick Grant (E.Tautz and BBC’s Sewing Bee), Camilla Lowther OBE (CLM), Bethany Williams, Phoebe English, Professor Dilys Williams (Centre of Sustainable Fashion UAL), Helen Brocklebank (Walpole), Fashion Revolution, Laura Bailey (Model and British Vogue), Dame Twiggy Lawson DBE (model), Katharine Hamnett CBE (Katharine Hamnett), Sarah Mower MBE (Vogue Runway and British Fashion Council), Julian Vogel (Modus BPCM), Ruth Chapman OBE (Matchesfashion), Isabel Ettedgui (Connolly), Yasmin Le Bon (Model), Roksanda Ilincic (Roksanda), Juergen Teller (Photographer), Jess Mcguire-Dudley (John Smedley), Sarah Coonan (Liberty), Justin Thornton (Preen), Andrea Thompson (Marie Claire), Jane Bruton (Telegraph) and Jefferson Hack (Dazed Media Group).
The Open Letter can be found here: https://www.fashionroundtable.co.uk/openletter
About Fashion Roundtable
Fashion Roundtable is the only fashion think tank that sits between the fashion industry and policy leaders: Front Row to Front Bench
We are secretariat for the All-Party Parliamentary Group for Textiles and Fashion chaired by Dr Lisa Cameron MP, with members including Dame Eleanor Laing, Lord Taylor of Warwick, John McNally MP and Baron Vaizey of Didcot.
Fashion Roundtable are also the secretariat for the All-Party Parliamentary Group for Ethics and Sustainability in Fashion, co-chaired by Baroness Lola Young of Hornsey and Catherine West MP.
Tamara Cincik, Founder & CEO of Fashion Roundtable has over 20 years’ experience in the fashion industry and has also worked in parliament. Since launching Fashion Roundtable, Tamara has spoken publicly on fashion and politics with a range of high-profile business press including SKY TV, BBC, Telegraph, Financial Times, Times, Guardian, New York Times, Liberation, Stern, Vogue Business and Business of Fashion.
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