Denounced staff, factory workers who are sent home because of lack of job, concerns about the future. Parts of the shoe industry in Northampton is already affected by the uncertainty caused by Brexit and UK’s goodbye to the EU, combined with other factors.
The British shoe mecca Northamptonshire has seen a massive boost since the turn of the millennium with the sharp increase in interest in Goodyear welted shoes around the world. The factories have been booming, even some new factories have opened for the first time in many decades, and sales have flourished. In 2018, however, this upturn has got a backlash.
One part is that the interest in classic men’s shoes has leveled out a bit, which I have written about before here at Shoegazing, and that we are entering a period with weaker economy, but above all, it is all the uncertainty surrounding Brexit that is the cause. In England the sales, not least in the luxury segment where classic quality shoes are to be included, has fallen dramatically during the year. Especially for physical stores, the situation is tough, no less than 2,700 so-called “High Street stores” in England closed the first half of 2018, 14 a day. The big department stores may have the worst situation. People are holding on to their pennies more when they don’t know what will happen after March 29 this year, when the UK somehow will leave the EU. And what one cuts down on first is the luxury consumption, the purchase of things that you may not really need.
Exports from the UK have also been affected, since no one know what will apply in the future when trading with British companies, there are less new players around the world who are starting to buy from here at this stake.
For essentially all shoe manufacturers in the Northampton region, the domestic market is the single most important. So many are affected by a failing trade in the country. And for some, it has quickly become harsh. As an example, one of the larger factories was recently forced to terminate 18 people, another just before Christmas sent home the staff early when they had so little to do, a third states that at the moment they only have orders for production a bit forward in spring and then it is currently empty.
What will happen next? Of course, much depends on how the Brexit clutter ends, which nobody has a clue about at this time. If the agreement negotiated between the UK and the EU becomes applicable, nothing will change compared to the present situation on March 29, when the UK will continue to be part of the customs union for at least a longer transition period. If Brexit is postponed nothing happen at that date either. If it becomes a hard Brexit, where they leave without any agreement at all, however, it will immediately be 11 percent duty on shoes from the UK to the EU, much more complicated import rules, and when private individuals from the EU shop from England you also have to pay your own countries VAT on it in addition to duty (however, the purchase must be made VAT-free, at least in the long run, but since England has lower or similar VAT as many other European countries, it’s not something positive).
What can hopefully alleviate the struggle in that case is that the pound is expected to weaken massively, which means that foreign goods in the UK will be even more expensive than just the added customs will cause, which should make more people choose domestically produced products, and that for foreign players it will be cheaper to trade from England with low pounds which, at least to some extent, can even out the duty charge. For EU citizens who are tourists in England you will be able to buy tax free, and depending on where you live, what you buy and the price you can avoid customs and VAT if you bring the goods home yourself. For example for us in Sweden, it is SEK €430 which is the limit at present if you go by plane, so shoes below that price level can be cheaper when bought on weekends in London.
It should also be noted that this does not go for all factories in Northampton, there are still those who have a positive development and who hasn’t been affected in the same way by the factors mentioned above. And an industry that survived two world wars, the invasion of cheap mass-produced cemented shoes, etc, will likely not duke under for a thing like leaving the European Union.
Anyway, most importantly now for both Northampton’s shoe industry and the British people in general is getting some clarity on what will happen after Brexit March 29. When we know this, things can hopefully be stabilised and a continued fall for the industry can be avoided. It would be sad if the fine period that Northampton’s shoe business had entered into was swept away.
What could we regular folks do? Well, keep buying British of course.