The decision by the United Kingdom, popularly known as Brexit, to leave the European Union may have had vastly damaging effects on the global economy but it is music in the ears of high end shoppers outside the UK.
The currency depreciation of the pounds sterling no doubt took took a toll on many industries. One industry that is reeling under the impact is the luxury brands in Europe and UK.
According to a study in June, the stock price of brands like Burberry dropped 3 percent and nearly 6 percent for Mulberry. The largest luxury brand group LVMH dropped 6 percent; Dior fell by 7 percent, L’Oreal 7 percent and Prada 4 percent.
As retailers based in the UK face complexities and a slump in prices of their commodities, for consumers outside the region this comes as a relief – albeit a temporary one, on spending on luxury goods. Tiffany have already warned that if the pound continues to weaken against the US dollar it would be compelled to raise its retail prices in order to maintain its worldwide relative pricing structure. Economists are already forecasting a rebound for the pound following the assumption of office by Theresa May, the new prime minister who came to office following the resignation of David Cameron.
Pending when the pound will rebound, shoppers are heading to the United Kingdom in search of most favourable deals in luxury items. The UK is the world’s sixth-largest market for luxury spending, at 15.5 billion Euros ($17.2 billion).
In view of the slump of the pound sterling, invariably the purchasing power of many people outside the UK including Nigerians, have increased.
A recent study by real-time analytics firm Edited, full prices of luxury goods dropped dramatically year-on-year in the wake of the UK’s Brexit vote. The result of the referendum is thought to have added to the existing woes of luxury retailers already suffering from a fall in tourists visiting Europe, a sales slowdown in Hong Kong and weaker demand in China, putting further pressure on full priced sales.
Nigerian Men for instance, who love to shop in the UK for their suits can take advantage of the various discounts being offered by fashion houses such as Savilerow. For instance a Black White Prince of Wales Check Slim Fit Suit which used to go for £299 is now sold for £249 while a black slim fit suit which was sold for £299 can now be bought at £199.
Recently, Burberry reported that its adjusted profits will be boosted by about £90 million if exchange rates remain at current levels. Online sales spiked strongly in all regions in view of the pound depreciation.
Luxury retailers like Matchesfashion.com now have items that cost considerably less in dollars and euros.
As already mentioned, the windfall in prices of the items may only be for the short term. On the downside, the stress that shoppers will experience in the long run in accessing their visas to the UK may dampen the prospects of any savings they are make from shopping in London or any major UK city. Experts also forecast that luxury companies may be forced to raise prices should the pound’s weakness continue.
In the meantime shoppers can save money and stress by making their orders online. Burberry and a couple of high-end luxury item providers offer free shipping.
FRANK ELEANYA
