The British Fashion Council (BFC) is leading calls for more Government support for the fashion industry as new figures reveal that almost a quarter of a million jobs are at risk as a result of the COVID-19 crisis.
Oxford Economics has produced a new report that suggests that the fashion industry will be hit twice as hard as the economy in general, effectively wiping out the above-average growth achieved by the industry in the past ten years.
The data shows that alongside the economic impact, an entire generation of creative talent is threatened to disappear, putting in danger the UK’s position as the “creative crucible” of global fashion.
Fashion employed 890,000 people in 2019 and Oxford Economics predicts that 240,000 of this directly employed in the industry are at risk. This figure rises to 350,000 when indirect roles in the supply chain are factored in, representing 1% of all UK jobs.
The level of GDP contribution is forecast to drop from its previous £32bn to £26.2bn while revenues are set to slump from £118bn to £88bn.
The BFC said it welcomed the support offered by the Government so far but its research suggested that many fashion businesses had not been able to access the support schemes. It added that in order to support future employment, which resetting the industry with a focus on “clean growth and positive” change on people and the planet, the Government needed to do more.
It has set out seven steps is feels are needed to protect the industry’s future. They are as follows:
1.) Helping keep retail open, protecting our towns and cities
With almost no tourism and projected long-term limited footfall due to low office occupancy and remote working in towns and cities, the commercial value of leases and cost of business rates makes it difficult to sustain retail. The BFC asks for Government support to enable lease re-negotiations where landlords aren’t acting responsibly and measures such as grants or long-term interest free loans to offset the costs of leases, as well as rent & rates relief for all businesses to ensure that our cities and towns don’t see a swathe of closures resulting in mass job losses, and further reduced footfall.
2.) Funding for Small to Medium Size Enterprises (SMEs)
Grants or interest free loans to SMEs that are not eligible for proposed Government measures, but were viable pre COVID-19.
3.) Innovation and research & development funding for clean growth
Support the creation of an eco-system to allow the industry to reset including smarter manufacturing, waste management, recycling, upcycling, and business models for a world-leading British circular fashion economy.
4.) Responsible retailing
Mitigate the inventory crisis by legislating and regulating it so that large retailers support small businesses, stopping the cancellation of goods and sell-through guarantees on agreed orders.
5.) Access to finance and future proofing
Explore financial mechanisms that will de-risk businesses for the future, such as supply chain finance. The global pandemic has further spotlighted the financial challenges of fashion businesses. It is essential that a fiscal framework is created to help develop more robust businesses that are less reliant on leveraging cash flow within the supply chain.
The BFC asks for the Future Fund to be made more appealing to private investors by offering EIS relief; the creation of a new Fashion Investment Fund with industry mentoring support and fiscal incentives for investment in business and inward investment.
A moratorium on payment of duty and tariffs to support the restart of international supply chains and further support liquidity and cash flow in the industry.
7.) British Manufacturing & Local Personal Protective Equipment (PPE) Supply
Support the growing opportunity to re-onshore responsible fashion and textile manufacturing throughout the UK through investment in innovation, capital and skills, as part of the Clean Growth Strategy while creating the right trading environment through tax relief and negotiations in new Free Trade Agreements. Following Downing Street’s commitment to producing 2 billion pieces of British-made PPE, work with industry to co-invest in British manufacturing, to support not just PPE required now, but the development of material innovation to create the most resilient, environmentally friendly PPE for the future.
The BFC has been attempting to shore up small designer-led fashion businesses through its BFC Foundation Fashion Fund and in May it awarded £1m to be shared across 37 businesses to help them through the crisis. A portion of funds was allocated to students, underpinning the future generation of creative talent. The fund will re-open for further rounds of applications so that more meaningful support can be given, every time the £500,000 milestone is reached.
This call from the BFC follows on from a call from the New West End Company in London, which said that a more than 70% slump in footfall in the capital was disastrous for the area’s retailers and restaurants and suggested that 50,000 jobs were at risk in that area of London alone.
It is calling upon the Government to reform tax-free shopping to stimulate spending.