The impact of Brexit on the British luxury industry

How has Brexit affected the British luxury industry?

For the United Kingdom’s maisons and premium labels, the post-Brexit story has been structural rather than temporary. Walpole – the industry body representing the Kingdom’s high-end sector, including names such as Burberry, Alexander McQueen and Harrods – has repeatedly warned that the changes are long-lasting, not a short-term adjustment.

According to Walpole, exports of British luxury goods to the EU are estimated to be 43% lower than they would have been without Brexit, with the gap widening as new trade barriers settled into day-to-day operations.
For many companies, the picture is compounded by global headwinds: shifting international demand, slower growth in China, and lingering uncertainty in consumer spending.

Brexit did not simply add paperwork. It changed the economics: every extra form, check or label translates into measurable costs; administrative costs, logistics costs, and opportunity costs when lead times slip.

What regulations are affecting the British luxury industry the most?

Here are the major Brexit regulations which are affected British luxury companies

Brexit introduced a new policy environment for trade with the EU. The impact is visible at border points, in product compliance, and crucially in VAT and returns.

#1 Delays to deliver their goods

Since leaving the single market, companies have faced longer delivery times due to customs procedures and certification requirements.

Two shifts have been particularly disruptive:

Transition from CE to UKCA marking:
products sold in the United Kingdom must carry the UKCA mark, while items entering the EU still require the CE label. Dual certification – mandatory from 2028 – adds complexity and compliance costs, especially for manufacturers with cross-border supply chains.
Sanitary and phytosanitary controls:
products containing animal-derived materials (leather, cosmetics ingredients, certain textiles) can trigger additional border checks. Each shipment requires detailed documentation, adding time and costs when a delay stalls distribution.

#2 Rules of origin

To qualify for tariff-free export under the UK–EU Trade and Cooperation Agreement, goods must meet strict rules of origin.
In luxury manufacturing – where products often integrate materials from multiple countries – compliance has proven particularly difficult.

“A product shall not be considered as originating in a Party if the production of the product in a Party consists only of one or more of the following operations conducted on non-originating materials.”
(Article ORIG.7 – UK–EU TCA)

For many heritage brands, this rule means reconfiguring supply chains or accepting higher tariffs on goods previously traded freely.

#3 Return/ refund policy

Brexit’s most persistent friction is often not at checkout but after delivery.

When items enter the EU, they face import duties and VAT. If customers return the same products, retailers can face double taxation unless they can prove the original export and manage the VAT refund process correctly.
Meanwhile, VAT refund procedures for United Kingdom businesses now follow non-EU rules and vary across European countries, often involving longer processing times, a significant burden for international retail operations across multiple markets.

This is where many brands feel the economic pressure most clearly: returns are already expensive in premium retail; Brexit makes them more complex, more uncertain, and more costly.

Source : Law society

Do you want to access the EU market more easily?

Discover how our Cross-Channel experts can support you

We create tailored support to give you concrete solution to access the EU market and fast-track your development.

#1Express your needs

#2We contact you back shortly

#3We put you in touch with the right contacts

Get in touch with our experts now

Retail and tourism: the missing piece in many Brexit conversations

Brexit has also reshaped the retail environment in the United Kingdom, particularly in London’s high-end shopping districts. International visitors – especially those who travel for shopping – factor VAT, refunds and policy into decisions. When the rules become less attractive, tourist spending can shift to other European countries.

Add the pandemic to the timeline and the picture becomes sharper. COVID-19 disrupted international travel and retail footfall; Brexit then added a second layer of friction just as the sector tried to recover. In combination, the pandemic and Brexit amplified uncertainty and slowed growth in certain segments of the market.

British luxury industry: is having a base in the EU the solution to overcome Brexit challenges?

Increasingly, Walpole and industry observers point to the same direction: brands that build a stronger EU presence can simplify trade and regain control of lead times.

A base on EU soil can help companies:

reduce customs friction and streamline cross-border processes,
optimise distribution routes and improve speed to market,
manage VAT more predictably for both shipments and returns,
keep closer relationships with distributors, clients and flagship retail networks.

For many international brands, it is less a “move away” from the United Kingdom than a practical adjustment to post-referendum reality, designed to protect European revenue and unlock new opportunities.

Hauts-de-France: a strategic gateway for British companies

Among EU options, France – and particularly Hauts-de-France – stands out for proximity, infrastructure and capability.

#1 A strategic location

Just a short distance from London, the region connects the UK to five major European capitals. As one investor put it:

“We searched all over Europe to find the best location for us. In the end, everything convinced us to put down roots in the Hauts-de-France region, where 83 million consumers within a 300km radius, including many of our customers.“ – Eugène Deleplanque – CEO of Dickson Constant

#2 Smart transport infrastructures to deliver your clients

The region is the closest European continental neigbour to the UK with direct access via the Eurotunnel and multiple ports, the region ensures fast and secure delivery of high-value goods across Europe.

#3 Access to talent and skills

The luxury sector in Hauts-de-France employs more than 12,000 people, supported by a strong regional network of 30 specialised degree programmes dedicated to fashion, design, and craftsmanship.
The region also ranks 4th in France for factory-schools in health and cosmetics, offering hands-on training tailored to the specific needs of luxury and beauty companies.

#4 A heritage in the luxury industry

Northern France has a long-standing tradition of craftsmanship and textile innovation, making it a natural home for luxury manufacturing.
The region hosts prestigious names such as Le Creuset, Verescence, and Chanel, as well as four L’Oréal Luxe production sites, a testament to its unique blend of industrial know-how, creative heritage, and excellence in high-end production.

Tailored support from the UK Business Centre Lille

Expanding into France can be transformative, but only if the operational details are handled well. The UK Business Centre Lille (UKBC Lille) supports UK companies looking to establish and operate in the EU by connecting them with the right partners and local expertise.

Support typically covers:

customs and VAT representation to ensure compliant trade flows,
legal and administrative guidance for setting up subsidiaries,
operational support across HR, logistics and relocation,
public support mechanisms relevant to investment projects,
local networking to connect with suppliers and regional institutions.

Start your EU journey now

5 key takeways about the impact of Brexit on the luxury industry

Brexit has created a lasting export gap for British luxury brands. British luxury exports to the EU are estimated to be 43% lower than they would have been without Brexit, showing that the impact is not temporary but structural.
Trade friction now affects every stage of the customer journey. From customs checks and dual certification requirements to rules of origin and complex return procedures, British luxury companies now face higher costs, longer lead times, and greater administrative pressure.
Compliance is becoming a strategic issue, not just an operational one. With dual UKCA and CE marking becoming mandatory from 2028 for relevant products sold across both markets, brands must rethink sourcing, logistics, and market access models.
Establishing an EU base can be a powerful competitive advantage. Hauts-de-France offers immediate proximity to the UK and access to 83 million people within a 300km radius, making it a strategic gateway for serving European clients faster and more efficiently.
The region combines logistics, talent and luxury expertise. With more than 12,000 luxury-sector jobs, 30 specialised degree programmes, a 4th-place ranking in France for factory-schools in health and cosmetics, and a strong presence of luxury brands, Hauts-de-France provides the ecosystem British luxury brands need to scale in Europe.