LONDON — As British politicians continue to bicker, backbite, and delay the big decisions, British fashion retailers are moving on, preparing for growth and business after Brexit.
On Thursday, a few hours before the European Union signaled it could delay Brexit by two months if Parliament passes Prime Minister Theresa May’s unpopular deal next week, Next and Ted Baker opened up about their plans for doing business if Britain ever leaves the EU.
Next, whose chief executive officer is the plain-speaking conservative Simon Wolfson, said while there may be uncertainty about Brexit, the company could “see no evidence that this uncertainty is affecting consumer behavior in our sector. Our feeling is that there is a level of fatigue around the subject that leaves consumers numb to the daily swings in the political debate.”
Indeed, people on the street here are talking about being “Brex-hausted,” or having “Brex-iety,” while the funnier ones are referring to a hard — or no-deal — Brexit as the “full English Brexit,” a play on the full English breakfast.
Next said it appears that consumer behavior in fashion retail will only be materially changed if the U.K.’s departure from the EU — or continued uncertainty around Brexit — begins to impact employment, prices or earnings. “It does not seem to be having any adverse effect on these variables at the present time,” the company said.
The retailer, which reported a 2.5 percent uptick in group sales to 4.22 billion pounds and flat profits at 590 million pounds in the fiscal year ended in Jan. 31, added that it’s ready for “all eventualities,” and has the systems and administrative procedures in place to ensure a smooth transition to a new customs regime.
The company said it was “encouraged” by the temporary measures that the U.K. customs office had announced to ensure that ports remained fully functional in the case of a hard Brexit. It has also put in place contingency plans to route more stock through ports other than the busiest ones of Dover, England, and Calais, France.
Next also said it was cheered by the government’s provisional tariff rates in case of a hard Brexit. Next estimated that there would be a net reduction in the tariffs it pays of up to 15 million pounds. As reported, the U.K. is planning to slash import tariffs on most products temporarily, with the exception of cars and food.
The retailer said it would pass on cost improvements to U.K. customers in the form of lower prices.
Also on Thursday, Ted Baker, which notched a 4.4 increase in group revenue to 617.4 million pounds, and a 22.8 decline in profit to 40.7 million pounds, told shareholders it had formed a Brexit working group, and has been “scenario planning” in the case of additional customs duties and duty declarations, value added tax, and the restriction on movement of people.
The company said that, in the long term, it is considering opening another warehouse on the continent to circumvent tariffs on deliveries to the EU if the U.K. cannot agree a favorable trade deal with Europe. Ted Baker also said it will continue to monitor “strategic opportunities” regarding trade deals with countries outside the EU if Britain does not remain in the customs union.
Britain is due to leave the EU on March 29, although that is looking increasingly unlikely given the EU’s talk about a two-month delay to May 22. In the next days May is expected to take her twice-rejected Brexit deal back to Parliament and — once again — try to convince lawmakers they should accept it so that Britain can move on.
If May’s deal does not pass, EU leaders said the Brexit deadline will be extended only until April 12. With no deal at that point, the U.K. would crash out of the EU.
In the meantime, Labour leader Jeremy Corbyn has been trying to build consensus in Parliament for an alternative, “softer Brexit” deal — although the EU has already refused further Brexit negotiations with Britain.
There is also talk of “canceling” Brexit, with a celebrity-endorsed citizens’ petition that has already gathered more than a million signatures, according to Sky News. There could be a second referendum, or even a general election, which would, no doubt, create even more Brex-iety for businesses and residents alike.