Will rising costs kill off Savile Row’s renaissance?
On a Wednesday morning earlier this month, there was plenty of activity on the shop floor at the Georgian townhouse that plays home to Richard James’ bespoke suit-making. One staff member is on the phone discussing colours and time frames, another getting a glass of water for a customer in the changing room, and smartly dressed men in for appointments say hello to one of the co-founders of the Mayfair-based brand. Sean Dixon is sitting in a lounge area where fashion books and neatly folded shirts are displayed near a bar stocked with spirits, ice buckets and plenty of glassware.
Dixon, wearing a ‘Prince of Wales’ brown check blazer and trousers, one of Richard James’ ready-to-wear suits, says the company, whose clothes have been spotted on actors such as Jason Isaacs and Andrew Garfield, is seeing revenues grow around 5 per cent year-on-year. The firm is encouraged by the level of interest in bespoke wear, and Dixon adds: “We are pleased with this growth. It is welcome and comes from a low base following a challenging few years for businesses like ours.”
The company is among a group of specialist retailers based in an iconic area of London known for bespoke tailoring, particularly menswear, for more than two centuries. Firms on Savile Row and the surrounding streets are famous for dressing royalty, prime ministers, bankers and rock stars, and the sector is passionate about training the next generation of cutters and tailors.
Businesses here have more in common than an iconic address; they share a similar tale of enjoying good sales momentum as loyal and new customers seek outfits for social events and alterations to pre-loved suits. Work wear is also popular and comes at a time when London firms are luring – or requiring – staff back to the office. Fresh figures from Remit Consultancy show office occupancy in the West End for the week ended March 14 was 62.1 per cent, the highest so far this year, while the City recorded 38.6 per cent, the best seen since mid-February.
All of this is pleasing for bosses after much turbulence. From changing styles to climbing rents, and more recently the loss of VAT-free shopping for international tourists hitting trade – and Covid lockdowns suddenly hurting demand in 2020 for formal wear – Savile Row has weathered plenty of storms.
Now further challenges loom, including a potential bumper 144 per cent leap in business rates bills in the soon-to-start financial year (more on that later), and an increase in employers’ national insurance contributions that comes in next month. Fashion experts will also eagerly wait to hear if US President Donald Trump’s tariffs plans could affect them.
Closer to home, suitmakers are not anticipating any big announcements that will drastically impact them when the Chancellor delivers her Spring Statement. But here members of the industry explain what some of the new and ongoing headwinds they face are, and what measures would be helpful in the longer term to ensure their specialist skills and services can remain in vogue.
Helen Brocklebank, who leads luxury goods trade body Walpole, says: “Savile Row tailoring is more than a symbol of luxury; it sustains a network of skilled artisans across the UK, from wool producers to expert weavers. While it attracts high-spending customers, it faces the same retail challenges as other sectors.”
Looking at business rates, the government wants to create a fairer more sustainable system around this property tax, and at the Autumn Budget in 2024 it was announced retail, hospitality and leisure firms will have lower multipliers on properties with a ratable value under £500,000. However this won’t come into effect until April next year when a new revaluation takes place.
For the financial year that begins next month the average business rates bill will rise to £76,934, up from £31,536 per retail property on Savile Row. That estimate, calculated for CityAM by global tax and software firm Ryan, is based on the consumer prices index measure of inflation increase to the standard multiplier, coupled with the cutting of the retail discount from 75 per cent to 40 per cent, which comes into effect on April 1 for eligible properties.
Dominic Sebag-Montefiore is creative director of Edward Sexton, a brand whose creations have been worn by musicians such as Jarvis Cocker and Paul McCartney. The retailer has enjoyed revenue growth with good demand, but is not immune from rising bills. Sebag-Montefiore would welcome more rates reform, and comments: “It would be good to reduce the cost of trading in bricks and mortar to encourage vibrancy in the high street.”
For Anda Rowland, a director at Royal Warrant holder Anderson & Sheppard, turnover has been growing, with a standout success this year being a blazer made from off-cut tweed. The tailor is not only in demand with customers, but also budding designers: it receives eight requests on average a week for apprenticeships.
But like for rivals, overheads continue to rise. Rowland says Brexit pushed up costs for the company, with extra time and money needed around paperwork for exports and imports, that could include mainland European customers needing alterations sent back and forth for example. She adds another challenge has been the loss of the tax-free shopping perk which had made UK purchases cheaper for international visitors. “We are aware of people spending less time on leisure in London to head to other European cities for their shopping trips.” On Rowland’s wish-list would be for the government to bring back VAT-free shopping.
James Sleater is among those who also want to see the return of tax-free shopping. The managing director of 204-year-old Norton & Sons says the tailor has expanded, increasing its global trunk shows to include ten cities worldwide, as well as broadening its product range to help keep turnover moving in the right direction. But he thinks the ‘tourist tax’ is hurting revenue “that supports not just tailoring houses like ours, but also the wider retail and hospitality sectors”.
Sleater adds: “The changes to business rates relief compounds the problem of no-VAT free shopping for the traditional houses that haven’t diversified.”
Walpole’s Brocklebank says: “With the luxury industry contributing £81 billion to the economy and supporting nearly half a million jobs, the Chancellor should incentivise spending – such as reinstating tax-free shopping for international visitors – to drive growth especially among Americans keen to avoid higher prices that could result from looming tariffs at home.”
A HM Treasury spokesman says “we are a pro-business government …We delivered a once-in-a-Parliament budget to wipe the slate clean and without our action, business rates relief for retail, hospitality and leisure would have ended completely in April this year”.
The spokesman adds that the government is focused on creating opportunities for businesses to compete and access the finance they need to scale, export and break into new markets. The well-dressed entrepreneurs carving out a living on Savile Row will be waiting to see whether these promised benefits will materialise.