Will British Luxury Survive in Central London?

Despite international brands flocking to prime London commercial areas, wither the true artisan brands in this rush?

Article by Rupert Watkins Photography by Andy Barnham

The limos sleekly prowl the streets of central London while property remains a global investment point. Flags from the great luxury houses of the world flutter idly above the shop doorways of Mayfair and Chelsea as the world continues to charge to London to fuel its desire for the finest goods and services. And yet… The capital’s major retail thoroughfares drip with labels but does this necessarily mean that London’s own unique, bespoke and niche artisans can thrive? Certain surface level signs appear highly encouraging. McKinsey & Company’s report for the Walpole Group in 2016 indicated the British luxury sector accounts for eight per cent of total exports and the sector is growing by 10 per cent per annum.

As the Walpole report makes clear however, there are no British luxury conglomerates, no behemoths like LVHM or Richemont and a lack of brands who have be able to punch through the £100 million revenue barrier. Given central London property, and its rent prices, is a law unto itself where those with the most firepower in the bank will dominate, can the smaller London brands, those perhaps that still have workshops centrally, survive in London in the long run? What does this mean for the centre of this hyper-city? Rather like the gentrification of the outlying boroughs, does the pincer movement of multinational conglomerates and prices force out of central London all those who give it its charm and who make it (God forbid) British?

Allied to this thorny question is the ongoing idea of what is the true nature of luxury? Is a luxury “label” in this commercially saturated present day actually luxury? Or is luxury something rarer, unique and crafted to the individual? I sat down to debate the future of smaller brands survival in the property battle for West One with a number of artisans who are still running their own unique businesses across central London.

What they all revealed is that it is a struggle. Many employ a workforce from across the EU; one has 15 European nationalities working for him. Along with the concern about an aging artisan workforce, there was from all my panel a strongly-held view that many of the British apprenticeship schemes that have gathered recent publicity are simply too little too late. “In this country artisanship has been dying for decades,” says one, “Italy and other countries cherish and have nurtured the old methods far more.” Away from this, London’s ever spiralling property market is resulting in even less scope for artisans to live in, or even commute to, a central London location. Swaths of north east London that once had an artisan heritage and populace have been colonised by the blue chip middle classes. One of my panel comments that his shop manager, who had worked in the industry for years, simply had to leave as the financial and lifestyle costs of a commute from Surrey made her believe the job she loved was just no longer viable.

There were two very contrasting strands of thought within the discussion. Some attendees frankly admitted that their five year business plans had fully accepted a bricks and mortar-less future in London. Most were looking to create a comprehensive retail strategy around trunk shows, private client visits and aggressive online marketing. A couple were looking at having small private offices in the Home Counties as their hub. These businesses do not wish to leave central London and Mayfair, the “sense of theatre” that all referred to as essential to the good artisan will be exceedingly tricky to re-create away from a shop. Different psychological and emotional hooks will be needed to engage and pull new custom through the decision and procurement cycle.

The other approach, espoused by many of the older, heritage brands that perhaps lack the flexibility to re-invent themselves, is to adopt a perhaps riskier model and actively grow into more shops and concessions. Continuing as they are is simply not viable. “It’s a question of scalability” remarks one, “whilst many businesses would be happy with a four to five per cent year in year out growth curve, we cannot bear that with our current costs. We have to be larger to be able to absorb the financial burden placed on us and drive faster revenue growth.” This, of course, carries risks – borrowing to fund this aggressive model leaves any brand at the mercy of the economic tide and interest rate rises. However, all attendees representing these historic brands feel duty bound as the “temporary custodians” to pass them on stronger to the next generation. So they feel that this is a calculated risk worth taking given the world currently idolises British heritage brands.

Throughout the discussion there is a strong feeling of David vs Goliath. There is a sense that all are fighting on an ever-more skewed pitch. Landlords hold more and more power and the tiny number of main prime London estate owners means it is all too easy for rent to be raised and raised again – there is no real way for firms to compare “market” rates. One attendee puts the rental difference at roughly £400 per square foot for the major estate owners and £150 per square foot from the few remaining independent landlords. Allied to the constantly changing roster of office minions these craft firms deal with, as one puts it, “I don’t get the feeling they have any interest in whether we are here or not.” Commercial self-interest aside, what happens when a tipping point is reached and leaves nothing but hyper over-inflated eateries, street-end to street-end European brands (made in Vietnam) and redeveloped or new penthouses making the centre of the capital a luxury groundhog day of perversely bizarre mediocrity?

All in recent years have had their inside rental costs doubled, with some tremors on the grapevine suggest tripling is next. Most have in the immediate term, regardless of longer term business planning, resigned themselves to seeing it double again. Some are in legal disputes – one is haemorrhaging over £2,000 per business quarter on lawyers’ fees to keep his rental review open and to prevent being foreclosed and have an unsustainable rise placed on him. Even calculation of rent is a fraught subject. Although the surveyor is nominally jointly selected by both the landlord and the tenant, given the long term and large scale financial return of dealing with the landlords, there is a suspicion amongst my group that it is a process ripe to become ever-more lopsided.

Business rates, a subject much in the news at the moment, are also an immense problem for the smaller British artisan. Despite official support for British brands, my panel had heard off of contacts that rate increases of over 400 per cent were being considered in certain very high profile central London streets, while 200 – 250 per cent increases were widely being talked about – and feared. Combined with the issue of rent, one just fails to see, regardless of the platitudes being flung around, how smaller British firms can compete in this hyper-aggressive and monetized area of London.

Luxury itself, or at least how it is perceived, further complicates matters. There was widespread sadness among my panel at how the idea of luxury has been hijacked by mass-produced labels and also at the degradation of the idea that luxury means something made specifically and refined for the individual, offering something one-off and precious. The internet is widely seen as a lifeline, allowing the curious, imaginative and dedicated individuals who want to know, understand and support London’s true artisans to do so. One of my Mayfair-based panel comments that he is always touched and proud to receive emails from potential clients in the Far East or the West Coast of the US saying they have scoured the world for an artisan firm that does exactly what they want, and they have come to him.

Will the “luxury” market face a crisis as it continues to expand, which is surely the antithesis of all that is luxurious? Certainly even the larger labels are spending more time than ever pondering how to appeal to and retain the interest of the truly wealthy and discerning. “It is about educating people about buying better not just cheaper,” says one. A couple of my panel point to the rapidly evolving tastes and knowledge of the Chinese. They are increasingly coming to London not only because they can play the exchange rate on big label items but also because they can find a variety, “a whole world of smaller, more discreet, older and true artisan firms that they can’t in Beijing or Singapore.” Much of the recent furore about visas revolved around ensuring this expanding and increasingly refined clientele can reach London. But if these smaller firms continue to be priced and bullied out of central locations, will this potential new money follow them to less fashionable environs?

Despite the recent press surrounding Westminster Council’s trumpeting of its new Special Policy Areas (SPAs) to protect various core areas much as Mayfair, Harley Street and St James’s, there is a lukewarm indifference to the supposed protection. Looking at multiple drafts of the document, whilst there is certainly protection for the distinctiveness and nature of the areas, it is by no means certain that it offers any real protection to actual small British artisans, be they historic names or new blood. Whilst the document states existing firms will be protected, the how that will be done is uncertain as the council is unlikely to be able to force landlords to retain existing tenants without actively suspending an open market and, of course, they have no means of knowing how the landlords will change in the years to come. One fears the way remains open for the large conglomerates, over time, to place their private client, bespoke ateliers into these remaining streets. This will result in them taking custom from older firms and if needed, off-setting running costs against their large emporiums in a way a unique brand cannot do. The nature of the areas would not change, what is done in the workshops would not change but the names above the doorways most certainly would. The skills will survive but the companies that promulgate that skill will change. Perhaps as London eats itself in an orgy of its own success this is the best we can hope for.

There is of course, the alternative argument, “is this simply part of London’s evolution?” as one of my panel puts it. London has always been changing, new buildings rising and falling and businesses in a constant state of flux. Is there any real reason why, due to certain historical feelings, anything should be set in aspic? Money has and always will alter the landscape of this city. Surely it is better for the firms to find somewhere that they can thrive, nurture their artisans and apprentices of the future, even if that means certain generational movement around London. After all, the tailors did chase the medics out of Mayfair back at the start of the 19th Century.

Ultimately, it comes down to two beliefs, not only the desire of the consumer to find the unique and pay a premium to receive personalised service but also the desire of that individual to be prepared to hunt it out, to make the effort to travel to where ever that craftsmanship and quality lies. In 21st Century central London, do the time poor, but cash rich want to head to WC2, N9, SW19 or E12 to get what they want? One hopes the desire for the special means they do but it does mean a steep change in the way people think about London.

London offers the elegant and intelligent consumer a remarkable experience, melding history, supreme craft, remarkable service and just that hint of British eccentricity that makes the relationships between client and craftsman so fun and long-lived. Without perhaps a benign British luxury conglomerate to protect, curate and enable the survival of British brands in the middle of this city, as one of my panel said, “luxury is becoming the plaything of the world’s billionaires – they have made – and are making – their money elsewhere so can set up, buy great names, fashion houses and conduct craft as a whim.” Will British craftsmanship survive? Yes, undoubtedly. But will the next decade see an increasing change as the retail space of London is completely left to the global mega brands and their conglomerate backing? Quite likely. The nature of central London will thus change and we may regret too late what we have lost. riddle_stop 2

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