The UK government has been called upon to roll out support measures for the fashion industry with experts suggesting the sector could be hit “twice as hard” by the Covid-19 recession compared to others.
The British Fashion Council (BFC) has today (16 July) released new data from Oxford Economics that reinforces the stark reality of the impact of the global pandemic on the British fashion industry.
The data suggests the Covid-19 recession could effectively wipe out the above-average growth achieved by the industry in the past ten years. The data shows that alongside the economic impact, an entire generation of creative talent is threatened to disappear.
In an industry that employs 890,000 people, 240,000 direct job losses are predicted. Including indirect jobs through the supply chain and consumer spending, this rises to 350,000 which equals 1% of all UK jobs. The level of contribution to GDP is forecast to drop from GBP35bn in 2019 to GBP26.2bn. Revenues, meanwhile, are predicted to fall from GBP118bn to GBP88bn in 2020.
“Whilst the BFC welcomes the support measures implemented by the Government throughout the Covid-19 pandemic, research found that many fashion businesses have not been able to access the schemes. Therefore, in order to ensure future employment, whilst re-setting the industry with a focus on clean growth and positive change on the planet and its people, the BFC is asking Government to consider the future of the sector through a series of seven measures.”
The measures include:
- Support to enable lease re-negotiations where landlords aren’t acting responsibly and measures such as grants or long-term interest free loans to offset the costs of leases, as well as rent and rates relief for all businesses to ensure that cities and towns don’t see a swathe of closures resulting in mass job losses, and further reduced footfall.
- Grants or interest free loans to SMEs that are not eligible for proposed Government measures, but were viable pre Covid-19.
- Supporting the creation of an eco-system to allow the industry to reset including smarter manufacturing, waste management, recycling, upcycling, and business models for a world-leading British circular fashion economy.
- Mitigating the inventory crisis by legislating and regulating it so that large retailers support small businesses, stopping the cancellation of goods and sell-through guarantees on agreed orders.
- Exploring financial mechanisms that will de-risk businesses for the future, such as supply chain finance. The global pandemic has further spotlighted the financial challenges of fashion businesses. It is essential that a fiscal framework is created to help develop more robust businesses that are less reliant on leveraging cash flow within the supply chain.
- A moratorium on payment of duty and tariffs to support the restart of international supply chains and further support liquidity and cash flow in the industry.
- Supporting the growing opportunity to re-onshore responsible fashion and textile manufacturing throughout the UK through investment in innovation, capital and skills, as part of the Clean Growth Strategy while creating the right trading environment through tax relief and negotiations in new Free Trade Agreements. Following Downing Street’s commitment to producing 2bn pieces of British-made PPE, work with industry to co-invest in British manufacturing, to support not just PPE required now, but the development of material innovation to create the most resilient, environmentally friendly PPE for the future.