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Brexit Reality Bites London Brands, Designers and Retailers

Fri 19 Feb

London’s five-day digital fashion week begins today against a backdrop of anxiety about cost of doing business with the European Union after Brexit.

With Britain still in lockdown and designers grappling with complex, costly paperwork and trading post-Brexit, fall 2021 will likely be remembered as the season of choking on red tape.

While Britain may have struck an eleventh-hour free trade deal with Europe — avoiding potentially onerous World Trade Organization tariffs — fashion houses here still have to face the reality of filling out multiple value-added tax forms; decide who pays VAT, and bankroll the extra charges on the materials and supplies they import from regions such as Asia, and then later export as finished goods to the EU.

“It’s a mess,” said Stefano Martinetto, chief executive officer and cofounder of the fashion brand development platform Tomorrow London, describing business post-Brexit. “At the moment I can’t see a single advantage to the industry.”

He said Tomorrow is fortunate in that it was able to hire experts to help the business chart a path through the new regulations — although that path is proving expensive.

Tomorrow is having to take on extra warehousing in the U.K. and in France, and has committed to paying duty on all deliveries to retailers outside the U.K. “We’re doubling up on costs and operations to protect our customers. In the end you have to fight hard to protect your customer,” he said.