CEO Letter | Hands across Europe
By the time you read this, I will be on a plane to Madrid for a meeting with my colleagues in the European Cultural and Creative Industries Alliance, of which Walpole is a founder member. The ECCIA brings together all the luxury and high end sector associations across Europe to work on shared issues – protection of IP and governance of the internet, including work on Selective Distribution; market access, trade and tourism; and highlighting the role of the cultural and creative industries as a key driver of Europe’s overall economic health, competitiveness, innovation and employment.
The excellent outcome of ECCIA’s work on selective distribution legislation last December is just one of the many tangible examples of how ECCIA works to make sure luxury businesses continue to flourish, and of course, in the context of Brexit, our strong working relationship with our fellow European luxury associations becomes even more precious.
On the agenda for the first ECCIA meeting of 2018, is ‘Hands Across Europe’, a social media initiative spearheaded by Meisterkreis, the German Walpole, and designed to stimulate interest amongst young people in craftsmanship, savoir-faire and in hands-on making skills. Highly skilled craftspeople are the mainstay of many luxury businesses, and across the whole of Europe and the UK there’s a troubling decline in the numbers of young people coming into these kinds of trades. ‘Hands Across Europe’ will complement Walpole’s work connecting British luxury businesses with their local schools to bring the world of work in luxury to life and to begin a conversation about jobs and skills – research shows that four interactions with business throughout a pupil’s time at school will reduce the possibility of their becoming NEET by five times. Last week, Walpole held its first round-table with member brands and Careers and Enterprise, who have the network into local schools, to start to develop a blueprint for the project and I look forward to sharing that with you in due course.
Also for discussion is the forthcoming European Excellence Summit, taking place in Madrid on 28th and 29th June this year. The inaugural convention, held in Berlin last year, brought 200 European luxury CEO’s together, including a strong delegation of Walpole member CEOs, with representatives from Johnstons of Elgin, Church’s, Wedgwood, DAKS and more, and was a powerful way to cement pan-European relationships, share common issues and hear examples of best practice. As in Berlin, Walpole will combine the trip with trade activity at the British Embassy in Madrid – in our recent survey, Spain ranked very highly as a target European market for many of you. If you are interested in attending the Summit, please do drop Charlotte Keesing a line.
Early next year, the UK will cease to be a member of the EU and become what’s known as a ‘third country’. In my first year as CEO of Walpole, the ECCIA conversations about trade with third countries focused on the EU-Japan Free Trade Agreement for which negotiations began in 2013, and in December last year, the EU-Japan Economic Partnership Agreement was finalised. It’s rather curious to think that, after March 2019, I will be preparing for an ECCIA meeting with ‘EU-UK FTA’ on the discussion agenda.
Despite the many ‘known unknowns’ of Brexit, the subject necessarily informs our discussions with our European counterparts – many British luxury businesses are in European ownership – just think of LVMH and Glenmorangie and Thomas Pink; Kering and Alexander McQueen; Volkswagen AG and Bentley; BMW and Rolls-Royce Motor Cars. In addition, between 30 and 60% of the British luxury workforce are EU nationals; most luxury businesses have long-standing and often complex supply chains across Europe; and, importantly, for most European luxury businesses, the UK is a key export territory – one has only to look at Bond Street to see how Chanel, Hermès, Louis Vuitton, Prada and Gucci thrive in London, not least because of the allure of London for visitors from the US, China and the Middle East and who brought a 22% increase in tax-free spending to the UK in 2017.
The issue of Customs Union is a critical one for many Walpole members – potential delays at customs would be financially damaging for brands – and it was interesting to hear Sir Keir Starmer, Shadow Brexit Secretary, confirm on the Andrew Marr show yesterday that staying in a customs union was now official Labour policy and “the only way realistically” for the UK to get tariff-free access to the EU, which was, he said, really important for manufacturing. The government is strongly opposed to staying in a customs union with the EU on the grounds it would prevent the UK negotiating its own trade deals with non-EU countries after Brexit. I am looking forward enormously to hearing what Sir Keir Starmer has to say at Walpole’s Brexit Breakfast on 7th March.
If you have not already RSVP’d for the Brexit Breakfast with Keir Starmer, and would like to attend, please email Olivia Lowdell. Places are very limited, and are for Walpole members only.
Wish me luck in Madrid – the UK and Spain share diplomatic ties going back more than 500 years, and commercial ties which go back even further – I’m excited to be talking about the shared interests of the luxury sector in Europe when I am there.
Pictured above: One of Method’s master craftsmen at work. Image courtesy of Graeme Hunter Pictures & Method, a 2018 Brands of Tomorrow.