London Fashion Week showcases Capital as global mobility centre

September 2018’s London Fashion Week may have drawn to a close, but the fashion industry is one of the fastest growing sectors of the economy in Britain. It employs close to one million people – comparable to the financial services industry, and is worth more than the car industry.The impact of fashion in terms of earnings and jobs is often overlooked, and yet the fashion industry contributed over £32bn to the UK economy in 2017, according to the British Fashion Council, an increase of 5.4 per cent on 2016. It’s not just about the income it generates, however. It’s also about London’s kudos as a centre for creativity, its international importance, and its status as a fashion hub, along with New York and Milan.Chanel, the luxury goods maker, has just announced it has chosen London as its international headquarters. The company had global sales of over £7 billion last year and employs more than 20,000 people. It told BBC Radio 4's Today programme that it “wanted to simplify the structure of the business and London is the most appropriate place to do that for an international company.” London’s geographical suitability, language and regulations were all reasons for the decision.In its new Value of Fashion report, the British Fashion Council (BFC) says that fashion is a major UK employer, with 890,000 jobs supported across the industry. Stephanie Phair, the new chair, said the UK was “a global centre for creativity and innovation” and had excelled at harnessing new technologies.

Fashion industry needs to be become more agile

While the industry is in robust health, it also faces significant challenges. The McKinsey Global Fashion Index forecasts fashion industry sales growth to nearly triple between 2016 and 2018, from 1.5 per cent to between 3.5 to 4.5 per cent.However, it says the industry will need to become more agile to cope with the growing global pressures. Fashion companies will need to build flexible supply chains and delivery models that can respond quickly when the environment changes.One of the impending changes for the UK is Brexit. Stephanie Phair of the BFC explained that the industry was “truly global and connected”. Goods need to move from one country to another and models travel from New York to London, and then onto Milan for Fashion Week. The industry would need frictionless borders and tariff free access to the EU in order to operate effectively, she told the Today programme.

Tough economic times for retail

Some luxury brands like Chanel, which in June released its trading figures for the first time in its history, are performing well. More affordable High Street retailers have, however, struggled with weaker consumer confidence, increased competition and higher business rates.The John Lewis Partnership has just revealed that its profits fell to almost zero in the first half of the year. It said it had been squeezed by trying to match special offers from rivals and that the retail sector as a whole was facing “challenging times”.Luxury goods retailer Burberry has also reported that sales in the UK and Europe have been weaker recently due to the stronger pound. Chinese consumers, who account for 40 per cent of sales, took advantage of currency movements after the Brexit vote two years ago and chose to shop in the UK. As the pound strengthened, they travelled to shop in other countries where their purchasing power was greater.

The effect of High Net Worth Individuals (HNWI)

Still, it is far from a gloomy picture. The UK experienced the largest inflow of non-bank deposits globally in 2017 and demand for luxury goods is particularly marked among high-net-worth, who now number 18.1 million globally, according to Capgemini's 2018 World Wealth Report, up from 16.5 million in 2016.The combined wealth of the HNWI – those whose assets are worth at least $1 million (£750,000) excluding their primary residence – has also hit an all-time high of $70.2 trillion, thanks to accelerating economic and equity-market performance across Asia and North America.This echoes the findings in Knight Frank’s Wealth Report, which provides an up-to-date view on the movement of luxury residential property prices in 20 of the world’s key cities. It says Asia is set to overtake North America in number of demi-billionaires.Even the uncertainty over Brexit does not seem to have had a significant dampening effect on demand for London’s most expensive properties for local or global buyers, Knight Frank says. And the demand for luxury serviced apartments for business travellers in the city is increasing too.

UK education: demand still increasing

One of the biggest drivers for prime residential markets is the demand for international education. Knight Frank estimates that a total of £2 billion each year is invested in London’s prime housing market by parents looking to secure accommodation while their children are at school in the capital.The most popular age for wealthy parents to choose to send their children to study in the UK is sixth-form age, followed by 13. The three greatest motivations for clients sending their children to school in the UK were: quality of education (87 per cent of all respondents); prestige of school name (including perceived future employment prospects) (67 per cent); and to improve their children’s chances of securing a place at Oxbridge or other top UK universities (62 per cent). Other motivations included property investment and quality of life, as well as the higher cost of school fees in other countries.  

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If you are looking for a school in the UK, take a look at our Guide to Education & Schools in the UK 2018 which is packed with help and advice.

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The most frequently cited reasons for selecting a university in the UK were prestige of university name and quality of education offered (each 80 per cent), followed by quality of culture and lifestyle (44 per cent).Such is the UK’s reputation for quality schooling that the vast majority of respondents (66 per cent) believed that the UK’s vote to leave the EU had had no impact on the attractiveness of the UK for education. The UK scored highly on strong pastoral care and number of extra-curricular opportunities. Wealthy parents see sending their children overseas to develop language skills and build a global network as an important factor in their future success.In order to achieve a place at a prestigious UK university, parents are enlisting the help of private tutors, even when their children are in private school education, according to a report by the Daily Telegraph. The newspaper found the use of private tutors has soared in recent years, with more than a quarter of secondary school children having had some form of private or home tuition, that figure rising to more than 40 per cent in London.Access hundreds of global services and suppliers in our Online Directory  Get access to our free Global Mobility Toolkit

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