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Post-Brexit, fashion industry puts on a brave face despite uncertainty

Alexandra Gibbs

While the decision to leave the European Union may not yet have shown its full wrath on the U.K. economy , fashion designers remain relatively optimistic, believing the industry will weather the storm.

"I'm not worried at all. I think London and British fashion is growing and I think that London is a great city for creativity and I think it'll be absolutely fine," fashion designer Anya Hindmarch told CNBC's Tania Bryer at London Fashion Week.

As the U.K. prepares to trigger Article 50, many companies are still in wait-and-see mode to see how the entire process will impact the U.K.'s economy.

"I think ultimately Brexit is affecting everybody, in one way or another," said Topshop's creative director Kate Phelan.

"I think it's going to pan out and we're going to see what the results are, but I think in some ways it's an unknown quantity at this point. No one seems to really know what the impact is going to actually be," she added.

Over the course of this month's London Fashion Week — currently in full swing — more than 5,000 guests are set to attend the five-day event, which has over 50 catwalk shows and 32 presentations. Yet while new designs should be the main takeaway, Brexit remains a key topic.

Like many other industries, Brexit has delivered both benefits and dilemmas for fashion in recent months. The weaker pound (Exchange: GBP=) has helped draw in more tourists and spending to the U.K., and made companies like Mulberry more competitive, its CEO Thierry Andretta told CNBC.

Meanwhile, for businesses that produce and source outside of the U.K. - particularly smaller businesses that haven't hedged their currency - companies are starting to see squeezes on margins, the chief executive of the British Fashion Council (BFC) Caroline Rush told CNBC on Friday.

According to the BFC who cited Oxford Economics data, the fashion industry acts as a major contributor to the U.K. economy, with it directly contributing £28.1 billion ($34.9 billion) to U.K. GDP in 2015, and employs some 880,000 people according to the same report. Therefore the future of the industry remains key to supporting the U.K. economy.

Last summer, the BFC hosted six roundtable discussions with representatives from several U.K.-based designer businesses and PRs. From those talks, the BFC saw six topics as key challenges for the industry in light of Brexit: trade deals, intellectual property, talent & skills, customs tariffs, post-EU incentives for growth, and finally the industry's reputation as being 'open for business'.

"I think our prime minister (Theresa May) is someone who is ready to listen," said fashion designer Roland Mouret.

"She would understand what is the reason to have an industry like fashion in England that can grow, can exist through Brexit and after Brexit and before Brexit. It's really something that England should be proud of."

The future of talent

Following Brexit, the future of trade and bringing in talent from overseas remains unclear. Despite these concerns, figures from the fashion industry remain upbeat on the U.K.'s future relations with other countries.

"What we want is the very best talent to be able to stay here to build businesses," British Fashion Council's Caroline Rush said.

"If you look at London Fashion Week, there are many international students that came to London, that studied here, that have built businesses, that are contributing to the economy, that are employing more young people and that's a really positive news story and that's something that certainly we don't want to go away," she added.

While it is uncertain whether talent from the EU will continue to come to the U.K. to support the fashion industry, Rush said she believed leading British fashion institutions wouldn't be affected when it comes to attracting global talent in a post-Brexit world.

Topshop's Kate Phelan echoed similar comments, saying the fashion industry was an "incredible melting pot of great culture" and the industry needed this culture to keep on making it "so interesting and so inspiring".

"The doors need to stay open and we need to continuously work with all the incredible talent that's available to us."

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