According to John Saunders, CEO of the Bristish Footwear Association (BFA), “it is still really too early to say with any certainty what long term effect Brexit will ultimately have on the UK and the wider of global economy.”

The days following the decision of the British people were marked by market instability and currencies fluctuation, and this is expected to continue, as the aftershocks will hit the global market, already destabilised for many unarresting events.

One thing seems to be clear now: this is not an issue confined to the UK borders. John Saunders agrees and ads: “the effect of the referendum is not simply a UK problem with the effects already being felt across global markets. The UK footwear sector, with its international interdependencies, is far from immune from the resulting volatility. “

Mr. Saunders believes the Brexit could be an opportunity for exporting industries in the UK, and footwear won’t be an exception. “British footwear manufacturers are well placed to meet any increase in demand….this should bring a degree of upside opportunity for British footwear makers and exporters”.

Despite the fact that this might come as an opportunity for the UK, uncertainty is never good for business, and the upturn of having more competitive exports, is that the devaluation of GBP against the US dollar and the Euro will inevitably increase the cost of the UK importing finished footwear, internationally sourced components and raw materials (including leather).  This will result in an upward pressure on prices and will more likely reduce margins for makers, importers and retailers.

On the consumption side, we might witness more resistance to immediate purchases and a delay in the buying decision might take place in the UK. This could have a bigger impact across the industry, as the UK market with a 560 million pairs of footwear consumed in 2015, is - according to the 2016 edition of the World Footwear (available here) - the most dynamic one in Europe. So, any retraction in this market will have impacts for any footwear companies operating in the UK. 

But the impact won’t be contained to the UK market. The costs for British companies doing business overseas is expected to increase if the British pound continues to devaluate. However, John Saunders says the “EU as a whole may work better without the UK and will be able to move towards closer political and fiscal integration and control if that is what is desired.  However, Europe, including the UK, will always remain fundamentally linked from a security prospective, historically, culturally and importantly for trade - these points must form the basis of our ongoing future relationships.”

In a currently challenging environment for international trade, the UK might be forced to set agreements with some key trading partners such as Australia, Canada, Japan and the US, and the country clearly lacks experience in doing this, as in the last 40 years this has been dealt at central level by the EU.

Notwithstanding, Mr Saunders keeps optimistic: “Our hope has to be that in the end common sense will prevail on both sides. If this is the case Brexit may still prove to be a new start for the whole of Europe and offer a new way forward for us all.”