Exit from European Union would hit British luxury companies
22/06/2016
Uncertainty over new trade arrangements, macroeconomic instability and currency unpredictability would all contribute, according to some analysts. UK luxury houses with suppliers in Europe would be negatively affected by currency movements.
Burberry is one such group. It manufactures the majority of its leathergoods in Italy and so a drop in the value of the pound sterling would make it more expensive for the company to buy raw materials and pay its manufacturing costs. Burberry CEO, Christopher Bailey, and Chairman, Sir John Peace, have both pledged their support for the country remaining part of the EU.
European brands may benefit from a Brexit, as a weaker euro could support sales in the US or in Asia. Andrea Morante, chief executive of luxury shoe firm Sergio Rossi, says it could be “an opportunity” for Italian and French companies.
Francesco Trapani, chairman of fashion brand Roberto Cavalli said a Brexit would lead to “a long period of uncertainty” and that people are “generally less inclined to spend or invest” during these periods.
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