Walpole, an institution representing the UK's luxury industry, urged government intervention to address post-Brexit trade with the EU to block trade.

The industry, worth £8.1 billion ($100.8 billion), faces challenges after Brexit, as detailed in Walpole’s latest deal with Europe Report for 2025.

The study conducted by Frontier Economics shows that luxury exports fell by an average of 43% after Britain left the EU.

This "Brexit effect" is substantial given the industry's role in maintaining more than 450,000 jobs and contributing £14.6 billion to the Treasury.

Fashion and accessories exports were hit hardest, down 64%, while interior design, household goods and craft exports fell 50%.

The complexity of the UK-EU trade relations has exacerbated demand from Chinese consumers due to increased U.S. tariffs.

The study shows that export dynamics have changed, with EU exports falling from 42% of total luxury exports in 2017 to 32% in 2022.

Despite this decline, the EU market for UK luxury goods still surpasses the United States and Asia, each accounting for 22% of exports and 14% in the Gulf region.

Post-Brexit trade barriers introduce increased paperwork due to new certification requirements and customs complexity, higher costs and export delays.

It claims these challenges have a disproportionate impact on brands that maintain high customer service standards. Rules enforcement across EU member states and ports are inconsistent, complicating things by introducing unpredictability into costs and timelines.

Complications of VAT refunds and reclamation processes have caused some businesses to lose their return items.

Marketing efforts are also confused by the difficulty of assigning product samples to journalists and influencers. Changing sustainability standards and labeling requirements also inject operational uncertainty into the business plan.

To address these challenges, some British luxury brands have established distribution centers and commercial operations within the EU to redirect investments and thus stay away from potential UK growth.

Walpole CEO Helen Brocklebank said: “The growth potential in the UK’s luxury segment is incredible, with a forecast of £12.5 billion by 2028.

"But, to achieve this ambition, we cannot bear the back of one arm. The strong connection and good deals with Europe are key to reaching this forecast, as well as our success in other global markets, and supporting craftsmanship and high-value manufacturing in the UK."