With the click of a button, a classic Burberry trench coat can be delivered to your doorstep within days. As an iconic British brand, Burberry has over 498 locations around the world and countless products traveling between national borders every day. Consumer demand and international markets that make the item seasonless while it remains a symbol of British fashion and production around the world. As winter creeps closer, you get your hands on a classic Burberry trench coat and discover the larger story of how it got to you through the process of international trade.

Statista

Burberry was founded over 160 years ago in 1856 in Basingstoke, England as a high-fashion brand. Unlike other luxury brands, Burberry has prided itself on producing its clothing in England. When the brand announced that they would open a manufacturing in China in 2012, they were met with staunch negativity. Because the trench coat is a symbol of British manufacturing and England in general, Chief Executive Officer Christopher Bailey thought that the brand should stay loyal to the heritage of the textile industry that would provide the timeless quality of the coat and opened a factory in Leeds in 2015. Although China’s production would have a comparative advantage and possibly make more money for the brand, the products would lose their history and sentiment. Using the original method that includes over 100 processes, it takes three weeks to complete a single Burberry coat. The site in Castleford manufactures 5,000 trench coats a week and has a capacity of 240,000 a year. With an average price point of $1,500, that’s $360 million a year in trench coats produced at this site. When Brexit occurred, people and brands were on edge of how trade barriers would change and impact British brands and products throughout Europe and if trade agreements would also change with the United States.

The Telegraph

With consumer prices on the rise in the U.K., the pound has fallen by a fifth to the U.S. dollar since the U.K.’s vote to leave the European Union. This is caused the price raw materials to increase, causing the price of consumer products to climb as well, which means the cost of that trench coat would rise as well. Since the U.K. will be leaving the EU, borders that were once open and had few restrictions will all change. The uncertainty of the U.K.’s trade could make labor market conditions tighter and cause even higher inflation. This type of monetary affect would curtail consumer spending, which is a main driver of the British economy. In addition, it may be harder for other Europeans to get their trench coat delivered from digital, which outperformed in this half according to Burberry’s “First Half Trading Update.” In fact, digital saw growth on a global scale in Asia, EMEIA (Europe, Middle East, India and Africa) and the Americas since the redesign and launch of burberry.com this past September. Knowing this, the delivery methods of European market segment may change in the future based on trade rules, barriers and even tariffs. The price of a coat could rise based on these factors and it is uncertain if shipping will be a different

For America, Brexit gave the United States a chance to get closer as trade partners. Obama previously said that Brexit would put the U.K., “at the back of the queue” when it came to free trade deals. The United States is the U.K.’s second largest trading partner while the U.K. falls behind as the U.S.’s seventh largest trading partner. Exporting goods is a huge boost to the British economy, in fact 10% of British exports came to the United States last year, which I can only assume included numerous Burberry coats. If the U.S. and the U.K. were able to form the Trans-Atlantic Trade and Investment Partnership (TTIP), it would cover 800 million people and facilitate closer trade with two of the largest economies in the world. However, like almost every trade deal, it has been disputed by Brits because of worries that large corporations that could take over the market, movement of jobs and softening on food safety and regulation.

You may not have realized it, but before your coat arrives to you via digital or if you pick it up in-store, all these factors have impacted that single coat. Raw materials makes your trench more expensive, the fall of the British pound has created inflation in women’s clothing. The landscape of the economy for England is in a transitional period and how it will change within Europe and America is yet to be seen at its full capacity. Your trench coat’s price is always changed based on these factors and more and how it will be delivered to customers may change and further impact this price. Perhaps it is in your best interest to go to England and purchase it straight from the source because it will be at the cheapest cost. However, next time you buy a Burberry coat, pay attention to what’s happening in the world of trade and Brexit, because the story of that coat might have changed.

HighCharts