Just today we took some time to hear about goings on in the Luxury Industry at the Stylus Innovation Forum in London, held in partnership with our friends at Mishcon de Reya (see @stylus_live and #ifstylus on twitter or www.stylus.com/).
It was a fascinating afternoon, the subjects of which included the various “New Rules” of Luxury, and will no doubt be inspiring a few of the forthcoming blog topics on this site! First and foremost however, we’d like to report back from the interesting panel discussion held at the end of the event, with Partners in law and PR, and chaired by Colin Stanbridge, Chief Executive of the London Chamber of Commerce and Industry (www.londonchamber.co.uk/lcc_public/home.asp).
What are the key challenges facing the Luxury Industry, as a result of Brexit?
Mark Foster, Partner at Brussels based Communications company, Kreab (www.kreab.com/) was optimistic: “In one respect some of the luxury brands and consumer goods will be less affected than more basic commodities in the sense that there probably wouldn’t be as much of an impact on the demand side of things,” he said.
Foster continued however, admitting that we are facing potential uncertainty in various respects. Things that might steer the Luxury Industry for example: if the government were to choose to reduce corporation tax to encourage growth and investment in the EU; the impact of inflation reducing purchasing power; the kind of tariffs we might be looking at in a ‘hard Brexit’, the added expense of import and; the generalised financial anxiety that might reduces sales in general.
So how can Luxury Brands best secure themselves against risk?
Here are three top suggestions from those in-the-know for businesses keen to place a barrier (where possible) between themselves and the negative impacts of Brexit.
1. Think about how best to support staff right now.
Nobody is immune from Brexit, but understanding the politics, process and the legal challenges around it will be influential in terms of how well you weather the storm.
Maria Patsalos, Partner at Mishcon de Reya said: “We’ve also sat around a table with top fashion designers – members of the British Fashion Council – voicing their worries: what’s going to happen to their Polish pattern cutters and seamstresses? Because without them, everything basically falls away. Apparently colleges and universities in UK don’t even teach these skills because British students don’t want to learn it.”
Patsalos advises those who’ve been in UK for 5 years to apply for Permanent Residency – free from immigration control – although there are stringent conditions attached. For those who haven’t been in UK 5 years, one option is to opt for what’s called a Tier 5 youth mobility visa. It’s for youth from certain countries who are willing to be mobile for a short period (18-30 year-olds) and lasts for two years.
2. Consider Trademarks and Designs now.
Designs are becoming more of interest to luxury businesses now – store designs, packaging etc – but registered design protection will become increasingly important to your businesses as Brexit plans unravel, suggests Mishcon Partner, Sally Britton. “You need to think about it now because you can only apply for designs in the twelve months after you’ve shown it to anyone outside of your business,” she warns.
3. Check contracts now!
“Really look at the big contracts that you’ve currently got in play and think about the issues that are likely to arise with Brexit,” says Mishcon Partner, Lewis Cohen. “Shifts in the costs of raw materials are already having quite a significant impact on people. Foreign exchange, currency… we’ve already seen a huge change in our exchange rate. Their could be further volatility. So manage those risks in your contracts. Have thresholds which if they’re crossed you can reevaluate or renegotiate, that’s useful.” Also think about mitigating costs, he continues: “The likelihood of tariffs, taxes, new regulations… these are things we should be thinking of when we enter into a contract. It might seem like a good deal today but if there’s a sudden duty attached to it, we’re stuck with it, so give yourself breathing space!”
Before you go… The kinds of issues discussed in the blog (and at Stylus Forum) are also areas we advise our clients on. If you have any further questions regarding Brexit and how best to support yourself in these uncertain times, please don’t hesitate to get in touch…
To read our ideas on how best to think positively about Brexit, visit our recent blog here: http://rebucklaw.co.uk/benefit-brexit-lets-look-opportunities-not-obstacles/