Blog: Industry weighs up impact of Brexit
Michelle Russell | 4 July 2016
Britain's historic vote in favour of leaving the European Union (EU) has left retailers and manufacturers mulling the consequences as the nation prepares for a long period of political and economic uncertainty.
For the apparel industry in particular, it must accept Brexit is going to happen - and start planning now in order to try to minimise the damage, one industry executive has said. He offers six suggestions of things we all need to understand about the potential ramifications of Brexit going forward.
In particular, the vote to leave has created deep uncertainty over the fate of EU trade deals that are pending ratification, such as the deal with Canada, and those under discussion, such as the Transatlantic Trade and Investment Partnership, or TTIP, with the US.
It could also have ramifications for the US retail industry, with analysts forecasting one of the biggest risks is likely to come from a strong dollar deterring spending by foreign tourists.
For the UK retail sector, Brexit will ensure inflation returns to the country's clothing and footwear sector, one analyst has said, with the sharp decline in the pound leading to increased import costs.
Elsewhere, a number of deals have been struck, with Israel-based lingerie, underwear and activewear manufacturer Delta Galil Industries acquiring VF Corp's Contemporary Brands businesses in a deal worth $120m. And, HanesBrands completed its EUR200m (US$223m) acquisition of Champion Europe.
German sportswear giant Adidas also divested its non-core nostalgia headwear and apparel brand Mitchell & Ness to a newly-formed entity, primarily owned by Juggernaut Capital Partners.
Victoria's Secret is preparing to take its fitness performance to the next level after deciding to ditch beachwear and focus on sportswear instead, just months after airing its Swim Special on CBS. Euromonitor International takes a look at the reasoning behind the move.
While, a focus on innovation in industrial engineering and information technology (IT) ishelping manufacturing giant Crystal Group maintain its competitiveness in the face of a difficult business climate - as well as contributing to greener, more sustainable manufacturing processes.
And, the latest EU trade trends point to a 10% rise in clothing imports into the EU-28 last year - with double-digit growth for the top two suppliers, China and Bangladesh. In particular, imports of men's and women's wear into the EU last year both saw double-digit value gains, with China continuing to remain the largest supplier.
In other news, Nike reported a disappointing fourth-quarter that saw profits slip; the firm has also named Apple CEO Tim Cook as lead independent director of its board to replace co-founder Phil Knight; and, the US has taken a strong stand against the use of forced labour in cotton production.
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