Why the UK's luxury brands aren't expected to "do a Gucci"

There was a dual tone throughout this programme: a kind of impatient casting up of the eyes to heaven about Britain’s lack of tax incentives for luxury craftsmen, and a deep smugness that many of our producers have neither the backing nor even any remote

Selling British Luxury
Radio 4

A programme on Monday about the UK’s luxury brands (Church’s brogues, Fox Brothers flannels) naturally applauded their “subtle fusion of heritage and craftsmanship”. But there was a dual tone throughout: a kind of impatient casting up of the eyes to heaven about Britain’s lack of tax incentives for luxury craftsmen, and a deep smugness that many of our producers have neither the backing nor even any remote desire to “do a Gucci” and be wheeled out across China. “The discernment trends are with us,” sniffed Deborah Meaden of Dragons’ Den, speaking very fast in a convinced tone, like someone forever moving towards grabbing mid-level loot. It sounded sensible but hardly audacious.

I once interviewed a former chief executive of Louis Vuitton who said that his favourite part of the job was not the parties or products (I believed him – he was wearing a zip-up cardigan) but the dawn poring over sales figures, seeking shapes and promises in buying, forging forth to Chennai and Yekaterinburg and Siberia.

“I have a very big idea of what Europe is,” he said inexorably. “Basically it starts in Paris, and ends up via the rest of the world in Vladivostok.” At the time we were in Kazakhstan, where he was opening a store in a mall aimed at young Kazakhs oil-rich from a treacherous site in the Caspian sea and shopping high-end for the first time in a century. And yet, the first product I spotted in this gold-dripping mall? Not, in fact, Louis Vuitton or Prada or Hermès – but a bottle of bubble bath from the Somerset brand Cowshed.

Later that day, on the damp walls of a restaurant on the outskirts of the largest city, Almaty (arrived at in a 1980s Lada), I noticed a mouldering but cherished hand-tinted, 18th-century print of West Wycombe Park in Buckinghamshire. If ex-Soviets can foster such whimsical ideas of Britain, anybody can. (And they do. One of the last prisoners in the Gulag, a double agent and former KGB code-breaker, said that his most prized possession back in Moscow had been an AA road map of the UK, featuring a special route to T E Lawrence’s house in Dorset.)

For now, though, we must accept our roots in the petit-bourgeois trading classes, plug our cufflinks, and think smallish.

Is it cause for smugness that British brands aren't able to "do a Gucci"?

Antonia Quirke is an author and journalist. She is a presenter on The Film Programme and Pick of the Week (Radio 4) and Film 2015 and The One Show (BBC 1). She writes a column on radio for the New Statesman.

This article first appeared in the 17 October 2013 issue of the New Statesman, The Austerity Pope

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Leader: The unresolved Eurozone crisis

The continent that once aspired to be a rival superpower to the US is now a byword for decline, and ethnic nationalism and right-wing populism are thriving.

The eurozone crisis was never resolved. It was merely conveniently forgotten. The vote for Brexit, the terrible war in Syria and Donald Trump’s election as US president all distracted from the single currency’s woes. Yet its contradictions endure, a permanent threat to continental European stability and the future cohesion of the European Union.

The resignation of the Italian prime minister Matteo Renzi, following defeat in a constitutional referendum on 4 December, was the moment at which some believed that Europe would be overwhelmed. Among the champions of the No campaign were the anti-euro Five Star Movement (which has led in some recent opinion polls) and the separatist Lega Nord. Opponents of the EU, such as Nigel Farage, hailed the result as a rejection of the single currency.

An Italian exit, if not unthinkable, is far from inevitable, however. The No campaign comprised not only Eurosceptics but pro-Europeans such as the former prime minister Mario Monti and members of Mr Renzi’s liberal-centrist Democratic Party. Few voters treated the referendum as a judgement on the monetary union.

To achieve withdrawal from the euro, the populist Five Star Movement would need first to form a government (no easy task under Italy’s complex multiparty system), then amend the constitution to allow a public vote on Italy’s membership of the currency. Opinion polls continue to show a majority opposed to the return of the lira.

But Europe faces far more immediate dangers. Italy’s fragile banking system has been imperilled by the referendum result and the accompanying fall in investor confidence. In the absence of state aid, the Banca Monte dei Paschi di Siena, the world’s oldest bank, could soon face ruin. Italy’s national debt stands at 132 per cent of GDP, severely limiting its firepower, and its financial sector has amassed $360bn of bad loans. The risk is of a new financial crisis that spreads across the eurozone.

EU leaders’ record to date does not encourage optimism. Seven years after the Greek crisis began, the German government is continuing to advocate the failed path of austerity. On 4 December, Germany’s finance minister, Wolfgang Schäuble, declared that Greece must choose between unpopular “structural reforms” (a euphemism for austerity) or withdrawal from the euro. He insisted that debt relief “would not help” the immiserated country.

Yet the argument that austerity is unsustainable is now heard far beyond the Syriza government. The International Monetary Fund is among those that have demanded “unconditional” debt relief. Under the current bailout terms, Greece’s interest payments on its debt (roughly €330bn) will continually rise, consuming 60 per cent of its budget by 2060. The IMF has rightly proposed an extended repayment period and a fixed interest rate of 1.5 per cent. Faced with German intransigence, it is refusing to provide further funding.

Ever since the European Central Bank president, Mario Draghi, declared in 2012 that he was prepared to do “whatever it takes” to preserve the single currency, EU member states have relied on monetary policy to contain the crisis. This complacent approach could unravel. From the euro’s inception, economists have warned of the dangers of a monetary union that is unmatched by fiscal and political union. The UK, partly for these reasons, wisely rejected membership, but other states have been condemned to stagnation. As Felix Martin writes on page 15, “Italy today is worse off than it was not just in 2007, but in 1997. National output per head has stagnated for 20 years – an astonishing . . . statistic.”

Germany’s refusal to support demand (having benefited from a fixed exchange rate) undermined the principles of European solidarity and shared prosperity. German unemployment has fallen to 4.1 per cent, the lowest level since 1981, but joblessness is at 23.4 per cent in Greece, 19 per cent in Spain and 11.6 per cent in Italy. The youngest have suffered most. Youth unemployment is 46.5 per cent in Greece, 42.6 per cent in Spain and 36.4 per cent in Italy. No social model should tolerate such waste.

“If the euro fails, then Europe fails,” the German chancellor, Angela Merkel, has often asserted. Yet it does not follow that Europe will succeed if the euro survives. The continent that once aspired to be a rival superpower to the US is now a byword for decline, and ethnic nationalism and right-wing populism are thriving. In these circumstances, the surprise has been not voters’ intemperance, but their patience.

This article first appeared in the 08 December 2016 issue of the New Statesman, Brexit to Trump