LONDON — It may be a worrisome moment for the British government, which still hasn’t agreed on an exit plan with the European Union. Yet the country’s luxury businesses are shrugging it off and taking matters into their own hands with a trip next week to their single biggest export market, the United States.
On Oct. 23, Walpole, the sector body for Britain’s luxury industry, will touch down in New York for a three-day visit with organizations including Bergdorf Goodman, Hearst and J.P. Morgan. It has also organized product showcases and social events.
Brands taking part in the second annual Walpole trip include Molton Brown, knitwear manufacturer Johnstons of Elgin, leather goods brand Ettinger, Farrow & Ball paints, whisky makers Glenmorangie and J.J. Corry, The Royal Mint, Historic Royal Palaces, Savile Row tailor Kathryn Sargent and winemaker Chapel Down.
“What do we need to do in response to these challenging times?” asked Helen Brocklebank, chief executive officer of Walpole. “We need to go to our biggest market, the market where we are most welcome, the market where the soft power and reputation of British luxury and craftsmanship can land most effectively.”
In an interview, Brocklebank pointed to the “long, historic relationship between British luxury” and the U.S. high-end consumer, the continuing appetite for British luxury goods in the region and the weaker pound that’s making British exports cheaper by the day. The pound is worth $1.32, down from a pre-referendum high of $1.48 in 2016.
The “Meghan effect” also should not be underestimated, according to Brocklebank. “This year’s visit is even more special because in May, we had the kind of ultimate political-economic alliance when Meghan Markle married Prince Harry. The ‘Markle sparkle’ has been tremendous, building a whole new layer of glamour and great business. She’s wearing handbags from DeMellier and dresses from Goat, which have been great business triggers. Both of those brands have accelerated their plans for U.S. expansion,” she said.
According to Walpole, 75 percent of British luxury brands have identified the U.S. as a “priority” growth market, and that is not surprising. America is the top luxury market in the world, valued at $85 billion and forecast to reach $103.5 billion by 2021, according to research by Walpole and McKinsey & Co. New York alone accounts for $25.5 billion.
Earlier this month the new U.S. Ambassador to the Court of St. James’s, Robert Wood Johnson, hosted a cocktail party at the ambassador’s official London residence, Winfield House, to spotlight Walpole’s mission and the lucrative luxury partnerships between the two countries. The GREAT Britain campaign, which promotes British creativity abroad, and the New West End Company, which represents retailers in Mayfair, and Regent and Oxford Streets are helping to fund the mission.
Brocklebank said one of the trip’s aims is to help British luxury brands get a stronger foothold in the U.S., and in New York in particular. The city represents one-third of the entire luxury market for British brands present there.
Walpole has scheduled a series of master classes and workshops, including a talk with Bergdorf Goodman buyers about how to work with U.S. department stores.
The British group will also promote its brands — and merchandise — during the three-day visit: Harper’s Bazaar editor in chief Glenda Bailey will be getting an award for promoting British luxury abroad, and in a separate event, 16 luxury brands will be taking part in a showcase of their merchandise at The Glasshouses in Chelsea.
Like so many business leaders here, Brocklebank admitted that the “very best post-Brexit scenarios are quite gloomy in terms of the costs. That really hurts because 60 percent of British luxury businesses are small/medium enterprises producing things that are of extraordinary quality. You need the very best raw materials and things need to go back and forth through Europe.
“There are headwinds, but this is a business with a very long-term view. The short-term pain looks quite severe, but you just have to think about what you can do — like doing better business with your greatest trading partner. And in terms of selling things, the customer is very resilient — and not particularly interested in Britain’s future relationship with the EU. We are doing every single thing that we possibly can to make sure that we don’t have a (bad) Brexit bump.”
Walpole is also on a mission to get Americans over to Britain, which is now a top luxury destination, thanks in part to the weaker pound and to the halo effect of the royal wedding in May.
According to Walpole, the U.S. is also the U.K.’s most valuable source market for visitor spending in Britain. According to Visit Britain, 3.91 million Americans visited the U.K. in 2017, an increase of 13.2 percent year-over-year. According to Global Blue, they spent 3.64 billion pounds.