Cool Britannia fights to stay in fashion amid Brexit impasse

Bloomberg

In the 1990s heyday of “cool Britannia,” designers John Galliano and Alexander McQueen ruled the runway, Burberry’s tartan was the design of the moment and model Kate Moss zipped around the globe to the tune of Oasis and the Spice Girls, sporting a Union Jack blazer.
But the music has stopped and today’s fashion kids are more likely to wear a European Union flag hoodie. The royal blue and gold-starred sweatshirts are a sign of a shifting fashion landscape, with industry angst growing over whether the UK can maintain its trend-setting reputation as it prepares to leave the EU.
“I know Brexit is responsible for a great deal of uncertainty and concern,” Margot James, minister for the creative industries, said as she opened London Fashion Week. “One thing that keeps me going is that the creativity in this country exemplified by your industry knows no borders.”
With luxury’s image-makers gathered in London as Prime Minister Theresa May declared an “impasse” in Brexit talks, the spotlight on British brands has been even brighter than usual. Burberry Group Plc debuted a new designer, and Victoria Beckham brought her runway show home from New York for the first time in 10 years. Tailors on London’s fabled Savile Row staged a street party to showcase their ateliers.
At first glance, Britain’s fashion industry is doing just fine. It contributed $43 billion to the UK economy last year, up 5.4 percent from 2016, according to Oxford Economics, as the Brexit-induced weakness of the pound boosted tourist spending and made exports more attractive.

Farfetch, Chanel
UK luxury upstart Matchesfashion.com garnered a $1 billion valuation when it sold to a private equity firm last year, while London-based online luxury platform Farfetch Ltd. held an initial public offering in New York that raised $885 million. Chanel Ltd. is moving some global corporate functions to the British capital from the US.
But Britain’s retailers are sinking deeper into a crisis brought on by the rise of Amazon.com Inc. and exacerbated by pound’s tumble. Department-store operator House of Fraser was sold to billionaire Mike Ashley’s Sports Direct International Plc after initiating insolvency procedures.
Fallout has spread to brands that sell via the chain, with shares of leather-goods maker Mulberry Plc plunging in the wake of the deal.
“The structure of the market has changed. People shop more high-low than they used to,” said Paul Martin, UK head of retail at KPMG, pointing out that Britain’s midpriced retailers are struggling while the likes of Gucci and Uniqlo thrive.
Burberry — the anchor of the British fashion industry, with more than $3.6 billion in annual sales — has turned to the continent to bolster its luxury credentials. The new chief executive officer and creative director, both Italian, were plucked from LVMH, and the company recently bought a handbag factory in Tuscany.