The Brexit and its effect on the luxury business are the talk of the town again. In June was already predicted that shopping in the UK could possibly save you money. In the very beginning of this month, we revealed that Italian brands really benefit from the tourist shopper who is on the hunt for bargains due to very favourable conversion rates. Before, Paris had always been the go-to city to get your luxury goods, as it was the 'cheapest' by far. However, due to the Brexit, the tide has changed and London is apparently the place to shop your new designer bag.
Spending power of the tourist
According to recent research from Deloitte, luxury goods cost less in the UK, than anywhere else. Since June, the pound has dropped with 17% in comparison to the dollar. This resulted into a good amount of tourists visiting Great Britain, which boosts the spending power of the tourist. Nick Pope, fashion and luxury head at Deloitte, has a clear explanation for this event: 'The trend in luxury pricing in the UK is being driven mainly by the depression of the pound - thus making the same item more affordable in the UK market, than any other market'.
Nothing lasts forever
The overseas residents made 3,8 million visits to the UK in July and this number increased with 2% in August. In total, an amount of 2.5 billion dollars was spent. All because of the fact that 64% of the luxury goods are cheaper in the UK, than in any other country. Ofcourse, this isn't meant to last forever. Due to the fall, the prices have already been pushed up slightly and a few luxury brands have already increased their prices.
We did the math!
Ofcourse you want to know how you could benefit, so we did some math for you. The Speedy 30 is one of the clearest examples. It was the cheapest in its city of origin Paris, where it costs €760. A very decent price, as it costs ¥7450 (€1003) in China and $970 (€880) in the US. However, the drop in the exchange rate, causes the Speedy 30 to cost £645 in the UK, which means that the Speedy 30 costs €716 in London. Other brands like Balenciaga are cheaper in the UK as well. The Balenciaga Foulard Fringe Dress is £1055 (€1177) in the UK. The French brand sells their Foulard Fringe for $1765 (€1604) in the US and for €1395 in Europe, a significant difference.