Small fashion brands battle Brexit costs

Some unhappy customers contacted Yolke after receiving unexpected invoices. All were compensated by the brand, says Ringner. “We had to make the decision to risk losing customers or to cover these costs ourselves. But absorbing additional costs weighs on margins, so the brand increases the prices of its products.

The UK fashion industry is putting pressure on the UK government. An open letter, led by Tamara Cincik, Managing Director of Fashion Roundtable, and signed by more than 400 names in the industry, was sent to the UK government on Tuesday, calling for more support. “The deal with the EU has a gaping hole where the free movement of goods and services promised to all creatives, including the fashion and textile industry, should be,” the letter said.

London-based womenswear designer Eudon Choi says his brand’s future is on hold. “As a small business, we cannot afford the administrative, tax and research expenses necessary to manage these trade changes with the EU,” Choi said. “If we move part of our business to Europe, we risk a loss of profit and the possibility of employing people in the UK. I think no one wants this to happen, but this is the position we find ourselves in without government support and pressure for a better deal with Europe. “

Wholesale partners, a savior?

A saving factor for Goat was the big wholesale partners, such as the Net-a-Porter group, which was “very well prepared,” according to Shah. The online luxury retailer was able to help Goat absorb part of the VAT and customs fees, and also provide logistical support.

Contemporary London label Cold Laundry was launched in 2019 as a DTC business, with 70% of its customers now outside the UK. The brand has been hit hard by tariffs, additional duties and new shipping costs to Europe, says co-founder and creative director Ola Alabi. Sales in physical stores, which previously accounted for 30% of turnover, were also severely affected. The brand responded by increasing its prices by 15 to 20 percent and is now exploring wholesale options.

European brands are also looking for larger partnerships. Holzweiler, a six-year-old brand showing at Copenhagen Fashion Week, launched at Selfridges in November. Large retailers such as Selfridges can “find solutions to get goods shipped,” says co-founder Andreas Holzweiler.

Returns are another post-Brexit challenge. E-commerce return rate increased by 95 percent over the past six years, and brands face an additional challenge of products stranded in the EU that customers have wanted to return because they were asked to pay unexpected additional costs. The UK Fashion & Textile Association (UKFT) has even informed retailers that the most profitable option may be to ditch or burn these products.

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