The UK’s luxury businesses will be among those waiting to see how the new deal with the European Union could affect the industry, as luxury association Walpole published a report that showed exports to the EU were 43% lower than they may have been without Brexit.

The research, conducted by Frontier Economics for Walpole, is the first comprehensive analysis of Brexit's impact on the luxury sector. The effect has been particularly pronounced in fashion and accessories (-64%) and interior design, home and craftsmanship (-50%). 

Meanwhile, exports to markets outside the EU have nearly returned to pre-pandemic levels.

 Helen Brocklebank, CEO of Walpole, said: "The British luxury sector has incredible growth potential, with a projection to reach £125 billion by 2028.

“However, to achieve this ambition, we cannot afford to have one arm tied behind our back. Strong links and favourable trading with Europe remain essential to reaching this forecast, alongside our success in other global markets, and key to supporting craft-led and high value manufacturing in the UK."

While the proportion of EU exports as a share of overall luxury exports has declined from 42% in 2017 to 32% in 2022, the EU remains the UK luxury sector's largest export market, ahead of both the US and Asia (both at 22%) and the Gulf (14%).

Since the UK's departure from the EU, the luxury sector has faced significant challenges, including increased trade barriers, complex paperwork requirements, and greater costs. Several British luxury brands have established fulfilment centres and commercial entities within the EU to mitigate these issues.

The luxury sector supports over 450,000 jobs and contributes £14.6bn to the exchequer.

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