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American shoppers searching for great deals following Britain’s decisive vote to leave the EU aren’t finding too many — at least, not yet.
The pound hit a 31-year low — worth $1.32, down from about $1.50 — after the results were announced early Friday, dipping slightly further on Monday morning on fears that the country may enter another recession. In other words, U.S. shoppers in the U.K. could expect a discount of around 12 percent this week versus last on most purchases.
Yet despite the sudden strength of the U.S. dollar and other foreign currencies relative to the pound, foot traffic has been relatively light on London’s major luxury shopping thoroughfares. No one was storming the Hermes store or standing in line outside the Burberry boutique.
"It’s been about the same," said a sales associate at the Burberry store on New Bond Street, where the spring/summer collection had gone on discount 10 days earlier. She noted that even with the recent currency fluctuations, prices between Burberry products in the U.K. and the U.S. were still relatively even. Indeed, when typed into Google’s currency calculator, the brand’s classic cashmere scarf in heritage check came out to $448 — about 3 percent more than the $435 you’d pay in the U.S.
"It's going to be the rare occasion when a consumer gets a good deal because of an exchange rate," said Robert Burke, president and CEO or Robert Burke Associates, a luxury-fashion consulting firm.
"Local and regional brands may be a different story, but international luxury brands have figured out global pricing, and they monitor it closely. There could be a few things of value, but as we know more about how the U.K. will level out, the brands will follow suit," he said. (Brands typically do not adjust their prices midseason.)
Associates at Hermes, Prada and the department store Selfridges said they expected to see store traffic pick up with the influx of tourists here to see Wimbledon, which kicked off Monday.
Some stores appeared busier than usual, but they were the fast-fashion shops. The Zara and Topshop locations on Oxford and Regent Street, recently plastered with giant "SALE" signs, were crowded even early Tuesday morning.
At the Gucci shop-in-shop at Selfridges and its store on New Bond Street, nearly every associate was occupied. “It was really busy this weekend,” said one employee at the two-story Bond Street store, where an American mother and daughter tried on the brand’s new Dionysus bags, which actually cost about 25 percent less than what they’d pay for them at home. "But I’m not sure it has anything to do with Brexit; it’s been really busy since we changed creative direction," she added, referring to the appointment of the brand’s popular new creative director, Alessandro Michele, at the beginning of 2015.
Still, there’s hope that sales will pick up. While it remains "business as usual" at the luxury department store Harrods, managing director Michael Ward said over email that the short-term devaluation of the pound should boost the number of tourists entering London in the coming season. But he was less optimistic about the longer-term implications of the referendum. "Whilst retailers may see the benefits of this in the short term, a secure economy and sustained growth amongst domestic customers is fundamental in the longer term."
If you’re heading to London this summer (or considering a stop-over just to shop), here’s how prices for some fashion must-haves stack up in the U.K. vs. the U.S. (Note: This doesn't account for any import duty you might have to pay — if you're honest with the Customs agent.)
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