LONDON — One word sums up the attitude of the British fashion and retail industry toward the upcoming referendum on Scotland’s independence: uncertainty.
On Thursday, Scotland is set to vote on gaining its independence, which involves issues such as what currency an independent Scotland would trade in, whether the nation would join the European Union and what taxation system the region would use.
Opinion polls on the issue have vacillated over the past week: One published in the Daily Record last Wednesday showed that 53 percent of voters would opt for Scotland to remain part of the U.K., while a YouGov poll published the previous Sunday found 51 percent were in favor of Scotland’s independence.
Last week, a number of British retailers voiced their concerns over what an independent Scotland would mean for business and the economy. Andy Clarke, president and chief executive officer of Asda, which is owned by Wal-Mart Stores Inc., said that, while the decision “is a matter for the people of Scotland,” he said that if a “yes” vote went ahead, “it would be imperative to establish a separate Scottish business. If we were no longer to operate in one state with one market and, broadly, one set of rules, our business model would inevitably become more complex. We would have to reflect our cost to operate here.”
Speaking to the BBC Thursday, Sir Charlie Mayfield, chairman of the British retail chain John Lewis, noted that a vote in favor of Scotland’s independence would “have economic implications and raise business risks that would affect our business, and I think most other retailers have said the same. There’s this question of the higher costs — it does actually cost more money to operate in some parts of Scotland. It’s very uncertain as to what will happen to that going forward. At the moment, that gets absorbed across the whole of the U.K. If there was a ‘yes’ vote, it might not be.”
Simon Wolfson, ceo of Next, told the London Evening Standard newspaper, “I’m worried what happens after independence. I’m worried about three things: currency, taxes and jobs. Whatever currency comes in in Scotland, it’s likely to be weaker than the one they’ve got, and that is likely to push up prices.”
The BBC also reported on Friday that a number of British retailers planned to jointly issue a statement warning of higher prices in Scotland should the region become independent.
David Gray, a retail analyst at Planet Retail in London, echoed retailers’ worries about potentially higher costs in Scotland if the country votes for independence. He noted that the costs of running a retailer in Scotland are greater, as the region’s rural landscape means transport costs are higher, which could result in higher prices. Currently, those higher costs are spread across retailers’ businesses throughout the U.K., he said. Ultimately, Gray said, the referendum is creating an uncertain climate that is “bad for business. People can’t invest, and they can’t plan.”
He also noted that, if Scotland opts to become a separate country, those retailers who currently only have a U.K. business would find themselves with an international business. “That’s a whole different ball game, and [retailers] would need to understand the rules of that country,” said Gray.
David Lonsdale, director of the Scottish Retail Consortium, said the organization is “watching the debate closely.
“We are working with our members to ensure retailers understand what the implications are for their business, supply chain, staff and customers,” said Lonsdale, who added that the decision itself “is, ultimately, one for the electorate.” Lonsdale said the SRC is helping its members with the impact that a “yes” vote would have on issues such as currency, EU membership and value-added taxes, along with regulatory regimes, taxation and employment.
Indeed, the referendum has become such a sensitive issue in the U.K. that many retailers and brands based in England and in Scotland declined to comment on the subject or did not return requests for comment. They included The Harris Tweed Authority, Pringle of Scotland, House of Fraser, Harvey Nichols and knitwear label Barrie.
But one designer who is unequivocal on her position is Vivienne Westwood, who, earlier this month, was inducted into the Scottish Fashion Awards’ hall of fame, partly in recognition for her use of Scottish fabrics. Westwood said she was firmly in the “yes” camp. “We really want to encourage Scotland to separate from Great Britain for all our sakes’ and the safety of the whole world,” said Westwood in a typically forthright pronouncement. “Great Britain is locked into the world economy, which is antipeople and antiplanet,” she said. “By putting people first, we know that Scotland could build an economy with true human values….We believe in smaller countries with more autonomy. We believe in cooperation between countries.”
Graeme Black, who designs for his own label in London and recently departed as creative director of Les Copains, said he believes “in a unified U.K. I think trade is better when there is one common goal: fluid commerce between creatives and craftsmen,” he said. “I would hope that a ‘yes’ vote would still enable free trade between Scotland and England, but it is very uncertain how the relationship would work, which makes me very nervous for future business.”
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