'Weak pound is working in our favor': British brands in U.S. talk Brexit effect

Everything from consumer view of the British brand to currency fluctuation is reshaping how English companies are orchestrating their U.S. ecosystems.

Brexit. 

On behalf of the British, I’m sorry we’re still talking about this. 

But the conversation is far from over, so strap in for the ride -- things are about to get weird and momentous.  

Theresa May passing the Prime Minister baton to Boris Johnson coupled with recent leadership turbulence in the U.K.’s ruling Conservative Party brings fresh upheaval and uncertainty around Brexit.

Figures reported in Campaign suggest the European Union separation process, which has been going on since June 2016, has had no significant material impact on advertising. In fact, U.K. adspend is forecast to grow by 4.8 percent in 2019, according to an Advertising Association/Warc expenditure report, with this figure having increased from the 3.8 percent growth forecast a year earlier.

But the Brexit effect is far from contained within those English coasts. Ripples have already made their way Stateside. Brands housed in the U.K with American branches are dealing with an onslaught of unprecedented changes to the way in which their businesses work overseas.

Everything from consumer view of the British brand to currency fluctuation is reshaping how English companies are orchestrating their U.S. ecosystems -- some with surprisingly positive outcomes. 

"Despite the current farce of British politics, we’ve found that the British brand continues to work well in the U.S., for tailoring at least," said Ian Meiers, co-founder of suit tailor company Cad & The Dandy, who officially expanded his business to New York City last year. 

"There’s a deep rooted association with tailoring and Britain, which isn’t going to disappear anytime soon. That said, customers do joke with us about Brexit and the three years it’s gone on for -- this has done nothing to instill confidence in people that Britain is a place to do business. Dragging Brexit out further will only damage the global view of Britain, but a messy divorce could be even worse."

Ironically, some of the flames fuelling Cad & The Dandy’s rapid growth in America has been the weak pound. 

He explained: "Fortunately, the weak pound is working in our favor. With U.K. production and 70 percent of our cloth being made in the U.K. -- the other 30 percent in Italy -- the weak pounds allows us to offer a more aggressive price point in the U.S. Some bespoke tailors charge double what we do, so it’s fair to say that the weak pound has been part of the reason for our success since launching in America."

It’s an outcome luxury leather goods company Ettinger is taking advantage of, too. But CEO Robert Ettinger said that a rise in sales due to lower product costs is only offsetting extra cash the company’s having to find to cover raw material imports from Europe.

Simon Bolzoni, managing director at bespoke shoe company Foster and Son, is also feeling the positive effect of sterling’s new low. 

"We make a conscious effort to source most our supplies and raw materials from the U.K.," he said. "This has the benefit of also reducing the impact of currency fluctuations. On the other hand, we have definitely noticed a positive effect on our exports, especially in the higher tier products such as bespoke shoes, luggage and cases."

Bolzoni is confident that the U.K.’s unrest will not severely damage the perception overseas consumers have of British brands. 

He said: "In terms of the perception people have of Foster & Son, I would say it has had very little to no negative affect. If you appreciate English shoemaking then the only place you will ever be able to find them being made is in England. That transcends political and societal turbulence. The same probably goes for most specialist industries.

"As for consumers perception of Britain as a whole, it might have an effect on how people perceive our politics at this moment but I don’t think it damages the actual brand of ‘Made in Britain’." 


What it means to be a British brand in America right now

George Z Graham
CEO & Co-Founder
Wolf & Badger 

What impact is Britain’s current political and societal climate having on your brand's perception and the consumers' perception of the U.K. as a whole? 

Although headquartered in the U.K., we also have a significant presence in the U.S. and if nothing else Brexit has spurred us on to further develop and expand in the exciting U.S. market. Certainly the current political climate is doing us no favors, not least in currency fluctuation, but the flip side is that the weak pound has significantly strengthened our U.K. export business, leading to us selling a record amount of U.K. goods into the U.S. and elsewhere.

British brands landing in the U.S. have, by and large, leaned hard into its heritage and royal history. Is there still an appetite for this or has it run its course? 

We focus on a more international angle, representing sustainable and ethical brands from around the world. While Wolf & Badger itself is a U.K. brand and proud of its British heritage, this is not something we necessarily 'play up' in our stores or online as we continue to build a global platform for independent brands.

What's the one giant hurdle your brand has had to overcome in the U.S. market you didn't see coming? 

The continuing weakness of the pound has made set-up and running costs in the U.S. significantly more expensive for us than anticipated. Notwithstanding that, the dollar income we are now producing is more valuable, and the weak pound is helping drive an increased trade from our U.K. brands into other markets, particularly the U.S., so there both pros and cons.



Ian Meiers
Co-Founder
Cad & The Dandy

What impact is Britain’s current political and societal climate having on your brand's perception and the consumers' perception of the U.K. as a whole? 

Despite the current farce of British politics, we’ve found that the British brand continues to work well in the US, for tailoring at least. There’s a deep rooted association with tailoring and Britain, which isn’t going to disappear anytime soon.  

That said, customers do joke with us about Brexit and the three years it’s gone on for, this has done nothing to instill confidence in people that Britain is a place to do business. Dragging Brexit out further will only damage the global view of Britain, but a messy divorce could be even worse. I'm hoping that matters are resolved soon and that we have the right leadership in place to make a success of Brexit, whatever the outcome is.  

British brands landing in the U.S. have, by and large, leaned hard into its heritage and royal history. Is there still an appetite for this or has it run its course? 

There’s still an attraction to the heritage of Savile Row, and the unique skillset it offers, but the appeal of saying that your company made for someone famous a hundred years ago is dying. The proposition and product need to be relevant and reflect what people want to wear today. We offer a slimmer fit, softer shoulder and have introduced new products like safari jackets and casual wear to meet the needs of the more causal working environment. To prosper these days in tailoring you’ve got to offer what the modern customer wants and it’s fair to say that people don’t want to look like their grandfather anymore!

The pound is at a major low right now. How are you dealing with currency fluctuation? 

Fortunately, the weak pound is working in our favor. With U.K. production and 70 percent of our cloth being made in the U.K. (the other 30 percent in Italy), the weak pounds allows us to offer a more aggressive price point in the U.S. Some bespoke tailors charge double what we do, so it’s fair to say that the weak pound has been part of the reason for our success since launching in America.  

What's the one giant hurdle your brand has had to overcome in the U.S. market you didn't see coming? 

There are various levels of tailoring, from ready to wear, to custom and made to measure, through to the full bespoke that we offer. Some U.S. customers haven’t heard of the term "bespoke" so part of our challenge in launching in the U.S. has been educating customers about the bespoke process.  

A full bespoke suit is made by hand and has a series of fittings before the final suit is made, allowing us to refine and perfect the fit.  We’ve found that word of mouth is the best way to get the message out as customers love the experience of coming in to their fitting, with the cloth covered in basting stitches, while they watch as we chalk and pin their suit.  The best surprise about the U.S. market is that our customers are more keen spread the word, whilst an Englishman likes to keep his tailor his best kept secret!



Robert Ettinger
CEO
Ettinger

What impact is Britain’s current political and societal climate having on your brand's perception and the consumers' perception of the U.K. as a whole? 

Yes, the current political and societal climate in Britain is turbulent, it is the unknown and not having control that makes it so difficult particularly for companies to know what to do, what will happen and how to plan for it. Ettinger currently exports 85 percent of what it designs and manufactures and is fairly confident that there will be a customs union and agreement with Europe, even if it comes after the leaving date. Some of our raw materials do come from Europe and there might well be some duties on these and where we export our finished product to Europe, could well have duties as well. 

But we are prepared for this and will deal with it as and when it happens. We are finding our brand's perception in Europe is just as strong as ever and the consumer's perception of Britain in Europe is still good, in fact a number of people I have talked to in various European countries are actually sad we are leaving. 

They also say it won’t stop them coming to Britain on holiday, buying British goods or in fact change anything at all to do with Britain. Many of them actually are seeing, apart from the good points of the European union, the bad points as well and this may just make the European Union look a little bit more closely at the whole alliance. Outside of the European Union business is as normal.

British brands landing in the US have, by and large, leaned hard into its heritage and royal history.  Is there still an appetite for this or has it run its course? 

Ettinger is now attending four trade shows annually in the U.S., as well as making a number of other trips to visit retailers and promote the brand. Having a Royal warrant - which was bestowed in 1996 by HRH The Prince of Wales - is most definitely highly regarded and respected in the U.S., it gives us a seal of approval, a stamp of trust regarding the quality of our products and the trust that the Royal Household has in the company. 

Our heritage - which now spans 85 years this year since my father founded Ettinger in 1934 -- is also still very important and customers love to delve into it and learn as much as they can. It gives depth to the consumer conversation. So to answer the question, there is definitely still an appetite amongst our U.S. customers to learn as much as possible about our heritage and royal connections.

The pound is at a major low right now. How are you dealing with currency fluctuation? 

The fluctuation of the pound does indeed cause us problems because although we try to buy as much of our raw materials as possible in England, we always buy the best we can and so some materials do come from Europe -- our leathers in particular -- and having a weak pound means it costs us more. 

But the pound has been fluctuating for many years now and it is something we are used to dealing with. The good thing about the weak pound is that the products cost less for our customers so sales go up and to a certain extent that counteracts the extra costs we have had in buying the raw materials.

What's the one giant hurdle your brand has had to overcome in the U.S. market you didn't see coming? 

Many companies enter the U.S. market thinking that the U.S. and U.K. are the same, but they're not, they're very different and the sheer size of the country is also a challenge. One needs to research and understand the market very carefully and not expect them to either like the same sort of products or sell them in the same sort of way. You also need to be prepared to make a longer term commitment to achieve growth and appreciate that this will require 'boots on the ground' for a consistent market presence and regular contact with buyers. 

We have had to have an open mind and be prepared to accept doing business in a different sort of way, much as we have had to do in Japan or Korea or China or indeed any other country in the world.



Simon Bolzoni
Managing Director
Foster and Son

What impact is Britain’s current political and societal climate having on your brand's perception and the consumers' perception of the U.K. as a whole? 

In terms of the perception people have of Foster & Son, I would say it has had very little to no negative affect. If you appreciate English shoemaking then the only place you will ever be able to find them being made is in England. That transcends political and societal turbulence. The same probably goes for most specialist industries. As for consumers perception of Britain as a whole, it might have an effect on how people perceive our politics at this moment but I don’t think it damages the actual brand of ‘Made in Britain’. 

British brands landing in the U.S. have, by and large, leaned hard into its heritage and royal history. Is there still an appetite for this or has it run its course? 

I think it depends. If a brand genuinely has heritage and provenance then this is a positive part of its story. When the visual identity and branding work in harmony with this, whilst still looking fresh and relevant, then this is still, and will always be, a very powerful combination. When branding is not sympathetic to the heritage, or if the heritage is a bit suspect, then people generally switch off quite quickly and it becomes irrelevant. 

The pound is at a major low right now. How are you dealing with currency fluctuation? 

We make a conscious effort to source most our supplies and raw materials from the U.K. This has the benefit of also reducing the impact of currency fluctuations. On the other hand we have definitely noticed a positive effect on our exports, especially in the higher tier products such as bespoke shoes, luggage and cases.

What's the one giant hurdle your brand has had to overcome in the U.S. market you didn't see coming? 

For the bespoke side of our business, which has been going for 179 years, we have a very long history of selling our products in the US, so we have very few surprises and quite a lot of market research. Last year we opened our very own Goodyear welting ready-to-wear shoe factory in Northampton. This has opened up a new wholesale business for us and we are taking our first steps into the US with our new products, As this is at such an early stage we haven’t had any major hurdles yet, other than maybe a bit more jetlag from all the extra travelling!


Bremont luxury watches

What impact is Britain’s current political and societal climate having on your brand's perception and the consumers' perception of the U.K. as a whole? 

The U.K. has been going through an extended period of uncertainty which has undoubtedly led to more cautious spending on luxury goods in general. I’m not sure the political and societal climate necessarily directly affects consumers’ perception of our brand as such. Whilst no manufacturer is an island, the current climate reinforces the importance of Bremont bringing as much of its manufacturing back to the U.K. as possible. Historically the U.K. has very strong manufacturing and engineering heritage, if we can help create jobs and reinvigorate a once booming British industry then it’s a positive message for us with positive societal impact. 

British brands landing in the U.S. have, by and large, leaned hard into its heritage and royal history. Is there still an appetite for this or has it run its course? 

If there’s an authentic story to be told which has heritage to it then there’s absolutely still a place for it and I think it does resonate overseas. Provenance and history are not only lovely stories to tell but they also provide a fantastic source of design inspiration in many cases. 

The pound is at a major low right now. How are you dealing with currency fluctuation? 

Our pricing has remained the same for a number of years now so we’re actually instating a small price increase in certain markets from September 2019, something that was really due anyway. Aside from this I’d say that we’ve probably seen more international customers buying in London as a result of the week pound which is to be expected.

What's the one giant hurdle your brand has had to overcome in the U.S. market you didn't see coming? 

The sheer scale of the U.S. and adapting our message to different regions has been something we’re continuing to address. Compared with other smaller markets such as the U.K. it’s a vastly different approach, culturally each state is incredibly varied and it’s about targeting the right messaging in the right ways to appeal to the local audience. 

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