It has been revealed that due to Brexit and hefty discounts, the British fashion industry is facing an extraordinary financial challenge.
Figures conducted by Opus Restructuring show that 43.6% of retailers in the fashion sector in the UK are thought to be in financial danger.
The research has shown that almost half of UK fashion retailers are in the “warning area” which means retailers are likely to face formal insolvency or endure key financial maintenance in the next few years.
Opus also revealed that total profits for the bigger high street retailers decreased 28% from two years ago to £1.87 billion and borrowing grew 11.6% to £3.5 billion.
Nick Hood, Opus business risk advisor, said: "The UK fashion retail sector is under exceptional strain, with plenty of anecdotal evidence of sustained periods of discounting as consumers demand ever-lower prices and as the fall in sterling impacts their costs and profit margins,”
"The failure of BHS and Austin Reed earlier this year shows what fate awaits clothing retailers who fail to invest and stay relevant to a constantly changing market."
"Whilst it seems likely that the major outlets will be reporting sharply lower profits, the real pain is being felt by mid-sized chains and the thousands of smaller retailers who are facing a truly bleak future."
