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What the "Brexit" Means for the Fashion Industry

In the early morning of June 23, British voters decided, in a 52 percent to 48 percent split, to leave the European Union.

The largest economy in the now 27-country bloc, the referendum on EU membership has been closely monitored by international financial markets.

The European stocks took a dramatic dip following the announcement. The pound fell to a 30-year low as the FTSE 100 dropped as much as 8 percent, making the UK poorer than France in the face of a global economy that is still in the early years of recovery from the 2008 recession.

Home to fashion houses such as Burberry, Stella McCartney and Alexander McQueen, the fashion industry contributed an estimated $38 billion of the UK’s economy in 2014.

The EU is the UK’s largest trading partner, accounting for 45 percent of exports and 53 percent of imports. Because of this, 90 percent of the 290 designers recently surveyed by the British Fashion Council were pro-EU. Notable supporters of the “stay in” movement included Christopher Bailey and Vivienne Westwood.

Luxury brands are expected to take the biggest hit in this uncharted economic territory, as they will now be forced to moderate costs to appeal to global GDP prospects.

Michelle Emmerson, Chief Executive of Walpole, expects possible short-term trade benefits from the lessened value of the pound, but noted in an interview with Business of Fashion that is it “vital that we retain access to the European Market and we urge the government to keep the luxury industry… in mind throughout renegotiations.”

Beyond market volatility, the identity of European fashion is expected to shift as a result of the UK's exit. Cross-country influence and mobility are cornerstones of the European fashion industry, and how this structure will be affected in the long term is uncertain. Potential damages could include university options and job prospects to those Britons looking to move to the EU, and vice versa.

Few specifics of the exit have been decided, as UK Prime Minister David Cameron announced his October resignation following the vote, prompting Article 50 to be carried out by his successor.

While the process is estimated to take anywhere from two year to decades to complete, the union that was created to prevent a World War III is already having a splintering effect around the globe.

(C) Amanda Oswald, 2016

Photo from the Business of Fashion. Read the article here.

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