How Brexit Will Affect the Sneaker Industry

Brexit. It’s barely even begun, yet somehow feels like it’s been happening for a lifetime.

When the U.K. officially withdrew from the European Union on the 31st of December 2020, just less than five years on from the bitterly divisive referendum, we all knew things were going to change: we knew our rights on the continent would be diminished, along with our place in the world, and we knew that trade between the EU and the United Kingdom was a key issue for the negotiating teams on both sides of the Channel.

But that’s pretty much all we knew. And what we know now – obscene logistical costs and complexities, absurd postage times, previously unheard of taxes – we know only from trial and error. And these are only the tip of the iceberg; the most obvious, surface level issues affecting pretty much all businesses of all kinds.

And the U.K. fashion industry, despite its immensity – being worth around £35,000,000,000 – is far from exempt, with a whole host of its own more niche problems. Problems which it has, in line with the general government approach to more or less everything, been left to tackle alone.

That the industry’s top export partners are all within the EU, making 80% of the total exports – Germany, France, Italy and the Republic of Ireland alone being worth over £3 billion GBP – is no small hurdle to jump. But what else is there to do? If you don’t jump, you get your feet taken out from under you and that’s a lot harder to style out.

Speaking in a personal capacity, London-based sneaker expert Nav Gill, who - among other clients – works with the Swiss athletic brand On Running, explains that there is more to the problem than the issue of new, up-front costs or of a possible decline in customer satisfaction when it comes to postage delays.

“The problem with deliveries isn’t just a problem with sales, it’s also created huge issues with influencer seeding and outreach programs,” Gill tells me. “If a brand is seeding new releases, to build hype for a launch, it’s not like they arrive in the warehouse months ahead of time – and by the time they land with U.K. influencers, it’s too late.”

Tried and tested marketing campaigns are faltering because, logistically, they’re no longer workable with the same kind of ease they were just last year; there is no influencing to be done if there is no product on-hand to push. And, where the U.K. is no longer a viable option, other territories will step up to take its place; there may be an extra 3,000 miles between Switzerland and the nearest part of the mainland United States compared to London, but deliveries can still expect to arrive faster and with fewer complications. This isolation on the part of the U.K., Gill further explains, means that “a lot of European brands' seeding strategies need to shift toward US influencers over those in the U.K. because they simply cannot get them product on time.”

Still, while On is far from a small concern – it holds 40% of the running shoe market in its native Switzerland and 10% in the much, much larger German market – it’s important to note that the biggest players in the sneaker industry have been vocal about their Brexit-based concerns, too. None more so, perhaps, than adidas CEO Kasper Rorsted

Back in 2018, Rorsted batted away questions about the U.S.-China Tariff War, pointing to his company’s continued growth in the Chinese market, and instead pointed toward Brexit as his biggest concern.

Speaking to CNBC’s Sara Eisen, rorsted pulled no punches: “I think that Brexit is probably the most unwise economic position Europe has taken in the last 20 years, along with the UK,” he told the American host. “There’s no doubt that the consumer and the economy will be impacted in the UK, in Europe for all businesses, including ours. Of course, we are setting up separate warehousing, doing more to hedge our bets.”

It’s one thing to know that small sneaker businesses are being hit hard by Brexit – naturally, those without the resources will always find alternative arrangements rather than paying a price they can’t afford – but the time, money, and thought being poured into these issues by household names really hammers home the scope of the problem.

In fact, in a second interview with Eisen in early 2019, Rorsted – not for the first time – called for a second referendum, citing adidas’ biggest concern as “the European impact of a potential Brexit,” and adding that, “The best thing that could happen would be a revote on the Brexit… It is weakening the European economy. It’s weakening the English economy and we just think it’s a very, very bad decision that will have very severe consequences in the long term.”

It’s not just our European partners left in limbo, either. In February 2021, with the post-Brexit reality inescapable, British sportswear giant JD Sports announced that it would be forced to open a new distribution centre within the EU – most likely Germany or the Netherlands – facing costs of “double digit millions” if European operations continued from the company’s main hub in Rochdale, England.

Problems, though, aren’t just affecting brands – they’re also affecting buyers.

A quick sweep of Reddit will turn up post after post in various sneakerhead threads with questions about everything from import taxes to raffles. Answers are varied, with stories of surprise fees and slow postage, if they come at all. The community is clueless; sneaker anarchy abounds.

In the Brexit update on its website, sneaker resale platform StockX attempts to put fears at rest, telling potential customers that “While Brexit may bring about change, rest assured your StockX experience won’t,” with a promise of “no surprise charges at your door.”

But this is only really what you might, generously, call a “half-truth”: another post on the StockX website, from just nine days later, paints a less rosy picture. The follow-up, once again, tells us that “all applicable duties and taxes are included in the price you see,” but this time comes with a kicker, eventually conceding that, “this may cause prices to seem higher than previously…to ensure your purchase follows all local laws and you have no surprise charges upon delivery.” Personally, I’d call that a noteworthy change.

The fact is, like businesses, as a community we’re only just beginning to grapple with the realities of Brexit – just starting to understand the frictions, roadblocks and exclusions which see us isolated from our counterparts in the EU. Exactly how that will play out over time, it’s hard to say – but U.K.-based sneakerheads, like U.K.-based footwear brands, will likely find their part in the global community becoming less and less integral as the EU looks inward and the United States and Europe look more frequently at one another.