For over 30 years, Paul Alger MBE has been travelling trade shows around the world representing the UK Fashion & Textile Association. Each year the UKFT takes hundreds of British brands and textiles companies overseas to promote their businesses. In June 2019, Paul was made a Member of the British Empire for services to exports in the UK fashion industry.
“Once the industry becomes compartmentalised and fractured, everyone feels they’re losing out, they’re spending more money than they needed to before to do the same amount of business.” As new business models for brands to showcase their collections keep appearing on fashion calendars each season, Paul believes it can send mixed message to brands. “We’re still faced with the same problem, there’s no increase in the number of buyers with budgets. If brands suddenly increase the number of events they go to, they’re just spending marketing budgets trying to chase buyers.”
“If a show doubles in size, then pretty much everyone is going to feel the show is half as busy as the year before.” Existing trade shows and showrooms are getting bigger and in exhibitor numbers making it inconvenient for buyers and brands. “It makes life more difficult for buyers because they’re having to visit even more places. We live in an age where buyers are looking for someone to edit for them. But it also makes it difficult for brands because they are trying to second-guess where their buyers are going.”
E-commerce has revolutionised the retail industry and has given buyers a lot to think about when competing with their online counterparts. “The world works differently now, online is a major challenge to brick-and-mortar retail. We all as consumers have to understand that we’ve priced retailers out of the market because of our spending habits. That has masked the fact that buyers are being much more cautious about how they buy.”
“Buyers have consumers trying to get things cheaper. The amount of money available for fashion is on the decline.” With savvy consumers constantly on the lookout for online deals at the best possible price, Paul thinks it is time for buyers to rethink their strategies. “Retailers are beginning to understand that if they buy big brands, those brands are available online. And at prices they cannot influence. Retailers are going to have to be a bit bolder, a little bit more enthusiastic about supporting new businesses, new collections. And not just buying the safe luxury collections.”
In an attempt to fix the changing retail landscape, Paul believes countries need to to be a lot tougher when it comes to tax laws and regulations for the influx of new e-tailers. “It cannot be right that online retailers get away without paying their fair share of tax and income tax. The UK is following France’s lead in establishing a new tax for online businesses. We all need to be doing this.”
And with Britain’s exit from the European Union fast approaching, brands of all sizes are beginning to plan. Paul states, “we expected to see British brands being apprehensive”, noticing that larger brands have already put the ball in motion to avoid any disruption to their lifecycle. “Larger brands have found they need to look at their distribution and make sure that their non-UK merchandise doesn’t get caught up in customs, which is one way of planning for a complicated Brexit.”
Planning is always a good idea, no matter what the scenario will be, and with Brexit, Paul feels there’s not much to do, other than await the final verdict. Like most, “smaller brands have been waiting for clarity,” and Paul says, “there is a limit to how much planning companies can reasonably do. Companies have done research and identified weaknesses, but they haven’t necessarily come up with any answers that are particularly palatable to them as British businesses. They are waiting to see what happens and will have to adapt very quickly to whatever reality we find ourselves in.”
As some of them are choosing to set up distribution channels in neighbouring countries, the future is still uncertain for many non-British run brands. However, Paul thinks the same goes for a lot of British brands and designers, especially if some parts of their supply chain are overseas. “Some people will be deciding whether they want to keep their businesses based in the UK. There will be some British brands that will warehouse outside of the UK, particularly if they’re not manufacturing here.”
Dropping out of the European Free Trade Agreement means that a lot of brands are required by international customers to cover additional duty costs they encounter, which is something that not all brands will be able to do. Paul goes on to explain, “in the case of brands selling into the EU from the UK, they’re looking at 12% duty. In Japan it would be 14% depending on the duty. So, if you’re paying 12%-14% more on costs, that you can’t pass on to your customers, that is not sustainable in the long term.”