Fashion guru slams ‘High Street Tax’

Wednesday 04 October 2017

The proposed ‘High Street Tax’ will dissuade big brands from settling in Jersey and restrict the island’s flourishing fashion scene from growing, a UK retail guru has said.

Dr Tessa Hartmann CBE – the brains behind the Jersey Style Awards – blasted Treasury proposals announced yesterday that would see shops making more than £500,000 in profit per year slapped with tax bills of up to 20% if more than 60% of their sales occur in Jersey.

Around 20 retailers, who were previously subject to 0% tax, are expected to be affected if the States Assembly approve the measure in next month’s 2018 Budget debate. Due to the narrow definition, online-only retailers are unlikely to be affected by the suggested shopping basket levy.

Dr Hartmann told Express that the move, which comes at a time when the high street is already aching from the internet revolution and Brexit, “screams of a lack of understanding of the financial contribution fashion and retail can make not just in terms of revenues, but employment and fashion tourism.”

“Our job here should be to encourage, motivate and entice exiting retailers to be proactive and new retailers to invest on the island. To effectively penalise a small segment of retailers, seems nonsensical to me and to ignore online retailers, even more remiss… The industry is worth £28 billion to the British economy and employs some 880,000 people. Jersey should be actively campaigning to bring bigger brands to our high street, with financial incentives and a welcoming economic climate,” she commented.

Pictured: The 'High Street Tax' should affect around 20 businesses, the Treasury said, but declined to reveal who those businesses were.

The UK brand strategist has long made it her goal to elevate Jersey’s fashion scene into the world of luxury, having told Connect magazine that she would love to see the likes of Louis Vuitton and Chanel hold a presence in Jersey.

Moreover, the island should be doing more to attract big luxury spenders from China and the US, as well as riding the designer wave in the UK, which is set to become the global number one premium goods market by 2018. 

But the Treasury’s ‘penalising’ tax would run counter to this, she commented.

“Our goal should be to position Jersey as a ‘fashion tourism destination’, with tax incentives for the consumer, great choice and a welcoming city… I appreciate it won’t happen overnight, but there is massive opportunity to focus on retail growth that could pay big dividends to the treasury pockets, but it needs a period of understanding, strategy and implementation. The most important thing is that it’s all possible. This ‘high street tax’ is naive, a fleeting solution for a much bigger issue and biased against high street retailers.”

She continued: “Womenswear value sales rose by 1.3% to £27.25billion in 2016 and are predicted to rise to reach £28.77billion in 2021 (Mintel, 2017.) £12.4billion is spent on fashion online in the UK in 2015, up 16% from £10.7billion in 2014 (Mintel, 2015) These are revenue streams that Jersey should be desperate to be part of, not putting the retailers off.”

Pictured: Jersey has enormous potential to develop a luxury industry and a keen following of 'fashion tourists' worth millions, but this won't be possible if restrictive measures like the 'High Street Tax' go ahead, Dr Hartmann argued.

If fashion brands are able to easily settle on the island, Dr Hartmann argued that they will also provide “ancillary revenue streams” generated through advertising, marketing and the creative industries, which will “make a massive contribution to the economy, employment of young people and indeed in the nurture and support of new and emerging talent.”

She’s now calling for a “wider debate” on the positive impact that fashion can have on the economy, and how the industry can be better nurtured in Jersey.

“We need to punch above our weight and really bring people on board to a working committee who understand what a valuable asset fashion and retail can be.”