Brexit beat-up of pound lures bargain seekers
Shoppers descend on Britain for deals on luxury goods.
Would you travel halfway around the world for a handbag, or a coat? Maybe if you really loved it and could get 20 percent off.
At the moment, the price is right in Britain, where the decision to leave the European Union has led to a sharp drop in the pound. That’s proving a bonanza for luxury goods shoppers with foreign currency to spend.
Amy Chang, a 30-year-old from China, snagged a Burberry trench coat this week while visiting London for her sister’s graduation.
“I’ve had my eye on it for a long time and I’ve always thought it was too expensive,” she said, gazing through the Burberry window shops in New Bond Street, the heart of highend shopping in London. “But now, coming to Britain, it’s actually much cheaper than in China, so I finally bought it.”
The pound has lost almost a fifth of its value against the dollar since the June 23 referendum on EU membership because of uncertainty about Britain’s economic prospects. That means tourist dollars go further, and visitors are rushing to buy before retailers jack up their prices.
Julie Deane, founder of the Cambridge Satchel Co., said the bargains have had a “massive effect” on tourist spending.
“They come and check out the exchange rate and what it’s going to cost them and often that will mean that they go ahead and put a second bag in,” she told the BBC. “In some cases it’s been five bags and six bags.”
The U.K. is currently the cheapest place to buy luxury goods, with 64 percent of products selling for less in Britain than in the U.S., China and France, according to a survey by the professional services firm Deloitte.
For example, the Louis Vuitton Speedy 30, a canvas handbag emblazoned with the iconic LV monogram, sells for the equivalent of $837 in the U.K. and $1,117 in China, Deloitte found.
And wannabe shoppers — particularly those from the Far East — are rushing to London before retailers adjust prices to offset the pound’s decline. Visit Britain, the national tourism agency, says flight-reservation data shows bookings from China to Britain are up 24 percent for the last three months of the year compared with the same period in 2015.
Chinese visitors, many of whom are interested in the craftsmanship and authenticity of U.K. brands, like the boutique aspect of London shops but are also attracted to the new outlet areas such as Hackney Walk in London and Bicester Village in Oxfordshire.
“The luxury market is one of the most competitive — if not the most competitive in the world,” said Anusha Couttigane, an analyst at Kantar Retail. “The fact that the pound has seen such massive devaluation has made retail a far more attractive market for consumers who had been priced out of the market previously. It’s created a boon, a much needed boon, for British businesses.”
In addition, many products that are available in Britain haven’t been shipped out internationally yet, adding style tourists to the mix of those just interested in a bargain, Couttigane said. dogs it has offered before. Other items include coding toys, robots and circuit builder sets aimed at both girls and boys.
Jennifer Weitzman, whose 5-year-old daughter Hannah has cochlear implants, has the American Girl doll with hearing aids and a Tinker Bell doll with a cochlear implant that Weitzman bought from a British site called ToyLikeMe.org.
“She lit up when she was given them. She thinks it’s awesome that they have implants just like her,” said Weitzman, of Mount Kisco, N.Y. “For many kids, it helps them identify and makes them feel included.”
The trend started a few years ago, pushed by parents who didn’t see enough diversity in the toy aisle and were turning to the internet or startups to find items.
Increasingly, the inclusiveness in the toy aisle means dolls with disabilities. Toys R Us has carried an exclusive line since 2013 called Journey Girls, which includes a wheelchair and a crutch set. Its partnership with American Girl to carry the Truly Me collection starting this month will include dolls that also use crutches, diabetes kits and wheelchairs.
While Lego has had larger figures before that use wheelchairs, the mini-figure introduced this year comes as part of the “Fun in the Park” set, mixed in with several figures that don’t.
“The designers were thinking about what might you see in the park in the city,” said Lego spokesman Michael McNally.
Lego mini-figures had been yellow so that children could imagine their own identity for the characters. “We’ve always been about helping kids find themselves,” McNally said. But in 2004, it introduced flesh tones when representing real-life personalities.
Experts say it’s critical for children to play with toys that don’t perpetuate stereotypes about what’s considered beautiful. They say the toys children play with have lasting impressions on their careers and their confidence.
“There’s been some good progress, but there is a lot of work that needs to be done,” said Elizabeth Sweet, a sociologist and lecturer at California State University in Sacramento. Calif. “Kids need to see themselves in the toys and objects they interact with.”
For building toys, the company GoldieBlox, founded in 2012, was among the first to disrupt the pink aisle by offering construction sets aimed at girls. But it also realized it needed more racial diversity, and last fall introduced a black character called Ruby Rails and has since then added a Latina engineer named Valentina and other characters.
Many experts have been closely watching the moves made by Mattel, particularly with its iconic Barbie, whose business has been rebounding amid a makeover after seeing its sales suffer. The nation’s largest toymaker launched the Barbie Fashionista collection last year that offered more skin tones, eye colors and facial structures. This year, it added three body types — curvy, petite and tall. It said those items have been doing well. Spokeswoman Michelle Chidoni says the company is also looking to add different body shapes to the Barbie career line and the Fairytale doll collection.
Racial diversity can also be key. American Girl, which is owned by Mattel, launched a doll this year whose story is that she is growing up in civil rightsera Detroit. Wal-Mart’s My Life As doll collection has expanded the number of skin shades available, and Hasbro is adding more skin tones to its Baby Alive doll for next year.