What are the Political, Economic, Social and Technological issues currently affecting the UKs fashion industry?

Discuss how these issues may change/transform the industry of the future.

As 25 years of great British fashion is celebrated throughout 2009, the UKs current fashion industry is quite possibly at the peak of its success after 25 Years of the British Fashion Council, 25 Years of London Fashion Week and 25 Years of the British Fashion Awards (www.britishfashioncouncil.com). However within an industry that is reportedly worth an estimated 44.5 billion in the high-street sector alone (http://www.enzinearticles.com) there still remains issues which put its current success at risk, prolonging a significant effect on the British fashion industry of the future.

Fashion centres of the world have always included London (Easey. 1995) with the strongest media platform worldwide, great British designers, including Alexander McQueen, Stella McCartney and Vivienne Westwood, The British fashion council and London fashion week, the UK fashion industry has been granted its place on the global fashion map. Making it a fashion capital alongside New York, Paris and Milan.

The current strength and success of todays fashion industry has developed from the early 1980s when the British fashion council was first established in 1983. There website states...

The British Fashion Council promotes leading British fashion designers in a global market. The events support and strengthen the UK's reputation for developing design excellence. These activities assist in the growth and economic impact of the designer fashion industry to UK PLC and enhance its international, cultural and creative reputation.

As the government does not view the fashion industry as a provider of merit goods it fails to support it financially. Therefore without the British fashion council it is unlikely that the UK would be as much a major player in the fashion industry of today as it is.

Despite the success of the UK fashion industry it is currently being affected by political issues including the impact of British retailers choosing to import goods from abroad. The rise of cheap imports has nearly wiped out UK manufacturing

(http://www.enzinearticles.com) described Glyn Barlow, director of Fashion shop UK. This has created a fashion market clearly driven by retailers rather than manufacturers. The cheap labour available abroad means the majority of UK businesses minus those in specialist fashion or luxury products have realised that the cost of importing manufactured goods for the UK retail market is cheaper than having the goods manufactured in the UK. This has brought the UK into the international fashion business. However fluctuations in exchange rates and the cost of importing and exporting goods abroad may begin to have a significant effect on the UK fashion industry of the future, if costs of imports become too high then many businesses could be forced to shut down as profit margins become tighter as a result of high production costs.

The current recession in the UK is a significant economic issue to be considered when looking at issues affecting the UK fashion industry, and how such issues will affect the fashion industry of the future. With the disposable income of consumers rapidly declining and with unemployment increasing it would be expected that consumer spending on fashion would have begun to rapidly slow down. However The fashion industry has been remarkably resilient to the global economic downturn, according to figures from Mintel's Global Market Navigator (GMN) (http://www.utalkmarketing.com), this indicates that despite the impact on consumers income, a vast majority of them are fashion conscious and still want to look good.

At a time when the country is celebrating 25 years of British fashion it is a more important than ever to the fashion conscious consumers that they look good. Currently a main strength to the UK fashion industry is that it boasts the greatest high-street in the world (Company magazine. 2009) providing a range of fast fashion at affordable prices. In the past cheap fashion would have been associated with poor quality. However the strength of the UK media during the economic downturn, means consumers are following the trend to become fashion cheats (Hines and Bruce. 2007) as fashion spreads of magazines and newspapers promote this trend to make it ok to mix fast fashion from the high-street with designer.

High street fashion giants such as Primark the discount clothing chain famous for its throwaway fashion, reported a surge in sales over the past six months as cash-strapped consumers become increasingly price conscious (http://www.guardian.co.uk), this illustrates the current effects of consumers spending habits on the UK fashion industry. Primark has also recently been recognised by leading fashion publication Vogue, encouraging those consumers that place themselves at the high-end of the market to choose the high-street in a bid to beat the effects of the recession.

In the United Kingdom women's wear constitutes over half the market at just under 60%. Men's wear moves up into 2nd place with 22% of the market and kids' wear represents 17.7% (http://www.utalkmarketin.com). These figures define the current UK fashion industry, with womens wear owning the majority of the market it is clear that its current success has come from the womans and in recent times the mans need to look good. Despite the recession consumers still feel this is important and therefore continue to shop on the highstreet. This has led to Arcadia reporting that profits have jumped by 13%. (http://www.drapersonline.com). This shows an issue expected to have maximum impact on the fashion industry to have actually strengthened it, as consumers opt for a cheaper alternative instead of stopping spending on fashion altogether. This could transform the UK fashion industry of the future as British consumers despite the economic climate still feel the need to spend any disposable income they do have on looking good.

Young fashion brands Topshop, Topman and Miss Selfridge all had record years, and Green (owner of the Arcadia group) said the Topshop flagship in New York which opened in April was performing ahead of plan (http://www.drapersonline.com). Arcadia not only dominate the UK fashion industry but the success of its flagship store in New York, defines how the UK fashion business is moving abroad, transforming the dynamics of the multi- billion pound industry of the future.

This has led to further economic impact on the fashion industry as fluctuations in VAT and interest rates have affected both its internal and external environment. When the VAT rate reverts back to 17.5% it will have a significant impact on the UK fashion business as Repricing tens of thousands of items is a mammoth and costly task says BRC director of business environment, Tom Ironside. The time spent by sales staff re-pricing items means less time spent focused on serving the customers. Also a situation where some old shelf prices may be less than the new price a customer is asked to pay at the till (http://www.drapersonline.com) may also occur, This may affect the fashion industry as consumers could be put off by the higher prices they are being asked to pay.

Fluctuations in interest rates is also an issue affecting the current UK fashion industry as interest rates drop, consumers are encouraged to spend and borrow more, along with businesses that are seeking capital to pursue expansion plans. However the rise of interest rates in the future during the recovery stage of the business cycle could transform the current success of the UK fashion industry as both consumers and businesses find themselves with less to spend and more to pay back.

The fashion industry will also always be affected by the changes and developments in society, in order for the industry to continue being successful it is important for British designers and the British high street to adapt to these changes. Current social issues affecting the UK fashion industry are the expectations of society for retailers to become more ethical. Green clothing has become an increasingly important issue amongst the British fashion industry of today and retailers have realised this with Marks and Spencer, Topshop and Next all producing eco fashion ranges, Next described its range as Something for the quality conscious consumer (Easey. 1995). However the cost of producing more ecological fashion is more expensive than the methods used for producing fast fashion that doesnt take into account ecological factors in the way it is manufactured. Unfortunately and perversely, the things that are best for you and the rest of the world are often more expensive than whatevers fast, cheap, and easy (http://www.ecouterre.com). This defines the expense of eco fashion to the consumer often leading to sales being disappointing, as consumers with a low disposable income prefer to purchase cheap throwaway fashion. This is having a significant effect on the current UK fashion industry as consumers weve been trained to

(http://www.ecouterre.com) buy quantity over quality meaning the cheaper the product the more that can be purchased, and the happier the consumer.

The access to cheap fashion has also resulted in Technological issues currently affecting the UK fashion industry including the strength of the online fashion market. Innovation and change have become increasingly important factors in the economic growth of the fashion business (Stone. 2007). The development of the digital age means online fashion has taken the UK fashion industry by storm as The internet has gradually become more mainstream as a retail distribution channel (Hines and Bruce. 2009).

The strength of online fashion is a technological issue that has maximum impact on the UK fashion industry, putting the UK high street at risk. Topshops website is believed to be its second largest outlet after its Oxford Street flagship store (Hines and Bruce. 2009) this is a strong indication of the competiveness of the online market against the high street. When a consumer cannot find their size in store they no longer go to the customer service desk to enquire about the next delivery date but instead goes home and logs onto the stores website to order what they want, in the size they want it.

The development of the virtual outlet means theres no longer a need for property leasing, clever visual merchandising or a team of sales assistants, this reduces the cost of running a fashion outlet, allowing cheaper products to be sold online than on the high street while still being profitable, as a cost effective market virtual outlets online may continue to become a key source for British consumers transforming the UK fashion industry of the future.

However the effects of the recent postal strike have resulted in shoppers going back to the high-street as they are guaranteed to have that must have pair of shoes in time for their night out. Current reports have shown that the growth of online spending is at an all time low (http://www.drapersonline.com). This may have a significant impact on the UK online fashion market of the future as consumers develop the impression that purchasing online could be an unreliable decision, as they may not receive their purchases in time for purpose.

Technological developments are also affecting the UK fashion industry socially as fashion blogging means it isnt just the fashion journalists and advertisers that control what the next seasons trends will be and what the best products to purchase will be. A feature in Octobers issue of Company magazine describes why fashion blogging is so this season this is transforming the fashion industry of the future as fashion and style blogging is giving consumers the power to say what makes us and will us fashionable. This could have a significant effects on both the high street and luxury end of the UK fashion business, as bloggers begin to listen to the opinions of each other rather than the opinions of the journalists and advertisers who have invested money in an attempt to convince consumers into buying next seasons trends, and must have products that will maximise their fashionable status.

Technological changes currently affecting the UK fashion industry also impact internally, as the introduction of CAD design programmes means the time it takes to produce a garment and get it on the high street is much faster than in the past. In 1992 only 150 out of the 9000 fashion companies in the UK were using these systems to design garments (Easey. 1995), such improvements in technology means businesses are replacing manual labour with machines, this change is impacting on the rise of unemployment in the UK, which could impact on the fashion industry of the future. However the positive effects of technological change on the UK fashion industry have allowed it to keep up with the fashion world, bringing trends from the catwalk to the high-street in a cost effective way that saves time and minimizes fabric wastage, such cuts in the costs of manufacturing means products can be sold at a profitable price that consumers can afford, having a positive impact on the current UK fashion industry and the industry of the future.

Each of the issues addressed by the PEST (Appendix A) and SWOT (Appendix B) analysis incorporated into this essay define how the UKs fashion industry needs to change and transform to be successful in the fashion industry of the future. Forecasts to 2010 are for the womens, girls and infants fashion market to grow by 23% with a 15.6% growth for the mens and boys fashion market (http://www.enzinearticles.com) having remained resilient to the recession the UK fashion industry has shown themselves to be in a comfortable position. However luxury brands such as Jimmy Choo for example are shown to be adapting

to the issues affecting the current UK fashion industry by coming down to the mass market in an attempt to boost profits. Although this may have a positive impact financially on the brand to begin with, in the long-term Jimmy Choo may be seen to be cheapening their brand image. The worst thing the luxury sector could do is to go downmarket and become undifferentiated from the mid-market, says Harvey Nicks boss in a recent report stating that Luxury needs to evolve (http://www.drapersonline.com). The decision to move from the Luxury to the mass market means aspirational purchases, no longer become aspirational and the same consumer that spends five hundred pounds on the brand name can be seen alongside someone else who has purchased the brands new season collection on the high street in stores such as H&M for as little as fifty pounds.

Overall the UK fashion Industry despite the current political, economic, social and technological issues that affect it, appears to be in a positive position, clearly led by retailers. Forecasts for the growth of the UK fashion industry are positive and the growth of the Arcadia group over the past year defines how the UK fashion industry of the future could be transformed away from the luxury market, into the high street, at a time when fashion is no longer just for the wealthy or for the beautiful but for everyone.

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