UKFT has sounded the alarm over the latest export statistics of the UK fashion and textile industry, revealing a startling 63% decline in apparel exports to the European Union over the past five years.

The fashion and textile industry has long been a cornerstone of the UK economy, contributing significantly to its growth and vitality. However, the recent export statistics paint a grim picture of the industry’s trajectory since the UK’s departure from the European Union. The full impact of this departure was previously obscured by the pandemic but has now become starkly evident.

According to the latest data examined by UKFT, the period between 2011 and 2017 witnessed a notable surge in export value, with a remarkable 36% growth, peaking at nearly £7.36 billion in 2017. This growth coincided with substantial government support through grants and trade show initiatives aimed at bolstering exports. However, from 2018 to 2023, the industry experienced a staggering 47% decline in exports overall, including a dramatic 63% drop in exports to the European Union. The Tradeshow Access Programme was cancelled in 2021, which used to support almost 1,000 UK fashion and textile companies every year.

The decline in apparel exports, a key segment of the UK fashion and textile industry, can be attributed primarily to dwindling EU export revenue, which plummeted by 63% over the five-year period, while exports to non-EU companies rose by 14%. This decline underscores a shift in global supply chains away from the EU, possibly in anticipation of heightened costs and trade barriers post-Brexit. Many UKcompanies have been forced to reroute their exports away from the EU to avoid double duty, exacerbating the industry’s challenges.

UKFT is aware of many UK brands switching off their B2C sales to the EU because they cannot afford the new cost of returns. Larger UK companies have invested in EU logistics hubs to avoid double duty for their sales to the EU, especially those targeting larger department stores in the EU which now only buy from UK companies which can “ship from the EU” on a landed basis. Large department store retailers in Spain and France are good examples of this.

The US remains the UK’s largest export market after the EU with a marginal increase as more UKcompanies target this market to compensate for losses closer to home.

Despite efforts to mitigate losses by targeting alternative markets, the UK’s traditional third-largest export market, Japan, has dropped out of the top 10 altogether. The complexity of global trade dynamics, compounded by stringent Rules of Origin, has further hindered UK apparel exporters’ competitiveness in international markets.

While external factors such as the pandemic have contributed to market fluctuations and disrupted supply chains, the sustained decline in apparel exports underscores deeper systemic issues stemming from the UK’s post-Brexit relationship with the EU.

UKFT has proposed a series of policy reforms to address these challenges, including renegotiating trade agreements and implementing targeted support measures for UK exporters. These include:

• Securing a new deal for British exporters whereby government tries to do less but invests more to provide real help with grants and connections to build UK businesses overseas
• Establishing agreements on reclaiming duty (and import VAT) paid on the outward export journey if goods are returned to the UK, or vice versa
• A new UK VAT refund scheme to attract foreign tourists to shop in the UK rather than in Paris, Milan or Berlin – since 2020 the UK is now the only country in Europe and CPTPP not to offer such an incentive
• Prioritise the needs of exporters when reviewing  the UK-EU Trade and Cooperation Agreement

Paul Alger MBE, international business director at UKFT, emphasized the urgency of addressing these issues, stating, “These latest export figures confirm what the industry has known for some time: that the current agreement with the EU is not working for UK exporters. Whichever party wins the next election is going to have to address these issues as a matter of extreme urgency.”

UKFT remains committed to advocating for policy changes that will revitalise the UK apparel industry and secure its place in the global marketplace.

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