“The currency situation has had a major impact on retail,” said George Wallace of U.K.-based retail specialist MHE Retail. “The total U.K. retail market is down by 2 percent or 3 percent, but I have seen figures suggesting that London retail is 5 percent up over last year.”
In March 2007, the pound equaled 1.47 euros, but by March 2008, it had fallen to 1.29, and now the two are almost equal, with one pound worth 1.07 euros. That has encouraged more euro-zone shoppers to travel to London to shop.
“Since the beginning of the year, Eurostar has seen an uptick of more than 10 percent in leisure travelers from mainland Europe,” said Simon Montague, Eurostar’s communications director.
According to the department store Selfridges, euro-zone shoppers are visiting its London store in increasing numbers. Based on several credit-card reports, it found that in January and February, trade from the euro zone was up by more than 40 percent compared with the same period in 2008. France was the top shopping nation, with spending up 70 percent year-over-year.
Other retailers report similar trends.
“We’ve seen a change since December and an uplift particularly in customers from Germany, Spain, Italy and France,” said Browns’ women’s wear buyer Erin Mullaney, who noted that sales on the Web have also grown.
However, she added that prices have risen on European-made goods, so she has to pay attention to her pricing structure to compete with brands such as Lanvin that have flagships nearby.
But brick-and-mortar stores are not the only ones benefiting from foreign trade. “We’ve seen a significant increase in footwear sales online, specifically with European customers taking advantage of the weak pound,” said Mark Baverstock, Matches’ international women’s wear buyer. “Despite the economy, clients are investing even more than usual in really special footwear styles from brands including Azzedine Alaïa, Balenciaga, Yves Saint Laurent and Chloé.”
The pound’s slide against the euro also has brought international business to U.K. stores that operate their Web business through London-based Internet portal Farfetch.com. “We have stores on our site from all over Europe, but those that are U.K. based are getting as many orders from overseas as from the U.K.,” said Paul Brine, Farfetch.com’s marketing director.
While many retailers are cashing in on the currency situation, others, particularly those that cater to locals or do not have an online presence, have not been as lucky.
“We don’t really get much tourist trade,” said Gerard Levy, who owns Spice, which has shoe stores in Primrose Hill and Islington in North London. He added that prices have risen dramatically since last year.
“I’ve just had a delivery of Castañer shoes that were last year priced at 65 pounds and this year will cost 85 pounds,” Levy said. “Everything has gone up by 30 percent, and what it means is that I won’t make the healthy profits I did before.”