London Fashion Week showcases Capital as global mobility centre
Fashion is big business. Bringing in over £32bn a year to the UK economy, it is worth more than the car industry. Marianne Curphey takes a look at the importance of the sector to the UK economy and finds out how it is weathering the Brexit storm.
Fashion industry needs to be become more agile
While the industry is in robust health, it also faces significant challenges. The McKinsey Global Fashion Index forecasts fashion industry sales growth to nearly triple between 2016 and 2018, from 1.5 per cent to between 3.5 to 4.5 per cent.However, it says the industry will need to become more agile to cope with the growing global pressures. Fashion companies will need to build flexible supply chains and delivery models that can respond quickly when the environment changes.One of the impending changes for the UK is Brexit. Stephanie Phair of the BFC explained that the industry was “truly global and connected”. Goods need to move from one country to another and models travel from New York to London, and then onto Milan for Fashion Week. The industry would need frictionless borders and tariff free access to the EU in order to operate effectively, she told the Today programme.Tough economic times for retail
Some luxury brands like Chanel, which in June released its trading figures for the first time in its history, are performing well. More affordable High Street retailers have, however, struggled with weaker consumer confidence, increased competition and higher business rates.The John Lewis Partnership has just revealed that its profits fell to almost zero in the first half of the year. It said it had been squeezed by trying to match special offers from rivals and that the retail sector as a whole was facing “challenging times”.Luxury goods retailer Burberry has also reported that sales in the UK and Europe have been weaker recently due to the stronger pound. Chinese consumers, who account for 40 per cent of sales, took advantage of currency movements after the Brexit vote two years ago and chose to shop in the UK. As the pound strengthened, they travelled to shop in other countries where their purchasing power was greater.The effect of High Net Worth Individuals (HNWI)
Still, it is far from a gloomy picture. The UK experienced the largest inflow of non-bank deposits globally in 2017 and demand for luxury goods is particularly marked among high-net-worth, who now number 18.1 million globally, according to Capgemini's 2018 World Wealth Report, up from 16.5 million in 2016.The combined wealth of the HNWI – those whose assets are worth at least $1 million (£750,000) excluding their primary residence – has also hit an all-time high of $70.2 trillion, thanks to accelerating economic and equity-market performance across Asia and North America.This echoes the findings in Knight Frank’s Wealth Report, which provides an up-to-date view on the movement of luxury residential property prices in 20 of the world’s key cities. It says Asia is set to overtake North America in number of demi-billionaires.Even the uncertainty over Brexit does not seem to have had a significant dampening effect on demand for London’s most expensive properties for local or global buyers, Knight Frank says. And the demand for luxury serviced apartments for business travellers in the city is increasing too.UK education: demand still increasing
One of the biggest drivers for prime residential markets is the demand for international education. Knight Frank estimates that a total of £2 billion each year is invested in London’s prime housing market by parents looking to secure accommodation while their children are at school in the capital.The most popular age for wealthy parents to choose to send their children to study in the UK is sixth-form age, followed by 13. The three greatest motivations for clients sending their children to school in the UK were: quality of education (87 per cent of all respondents); prestige of school name (including perceived future employment prospects) (67 per cent); and to improve their children’s chances of securing a place at Oxbridge or other top UK universities (62 per cent). Other motivations included property investment and quality of life, as well as the higher cost of school fees in other countries.If you are looking for a school in the UK, take a look at our Guide to Education & Schools in the UK 2018 which is packed with help and advice.
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