‘Crazy' luxury tax is disaster for Britain, warns the King's tailor

Telegraph

05-05-2025

'The impact on our US business is significant.' So says Anda Rowland, proprietor of the King's tailor, Anderson & Sheppard, on the subject of Donald Trump's tariffs. In particular, the president's new taxes have knocked the company's hitherto thriving ready-to-wear online sales to America.
But the US tariffs are not the number one problem affecting the business. That accolade goes to the decision by Britain's previous Tory government in 2021 to axe the longstanding VAT exemptions on purchases by international buyers, which continues to hurt London's luxury goods sector. The policy, dubbed the 'luxury tax' or the 'tourist tax', has been blamed for driving wealthy foreign shoppers away from London and to rival hubs such as Paris and Milan.
'It's an absolute disaster,' says Rowland, whose business works with 60 suppliers from across the UK's textiles industry. 'VAT is the killer. It was crazy, because it's a discretionary spend and people can find something similar somewhere else.'
Fortunately, as she is quick to point out, what her business does isn't easily replicated elsewhere. Founded in 1906, Anderson & Sheppard is renowned for its 'English drape' tailoring and counts Cary Grant, Rudolph Valentino, Lawrence Olivier and Fred Astaire among its notable historical clients. (It also made that fuchsia tuxedo worn by James Bond star Daniel Craig at the premiere of No Time To Die in 2021.)
But the shop's most famous client today is undoubtedly the King. His Majesty has been a customer since the early 1990s and granted the business a royal warrant in 2011.
'The King is amazing,' enthuses Rowland, describing the thrill of seeing him wearing one of their suits. 'His Majesty is a great ambassador and also, on another level, he's helping us to improve our business practices,' noting that applying for a royal warrant requires applicants to meet a swathe of business and environmental standards.
Praising the Queen and the Prince and Princess of Wales for their role in helping to fly the flag for companies such as hers, Rowland confirms that when it comes to the King '80pc of what we do is repairs and alterations'.
Anderson & Sheppard's rich history and reputation, and the support of the Royal family, have helped to attract customers despite the luxury tax.
Fortunately, its core bespoke business is less affected by the US tariffs because much of it takes place in person in London. Affluent Americans fly in for fittings, negating the need for sending suits cross-border without their owners.
'Touch wood, we are extremely lucky,' says Rowland.
Rowland, 55, took over the family-owned Anderson & Sheppard 20 years ago in 2005, after a career at luxury cosmetics at names including Dior.
Her father, Tiny Rowland, the buccaneering Lonrho tycoon and one-time owner of The Observer who died in 1998, was an Anderson & Sheppard customer and acquired a controlling 80pc share in the business in the 1970s after being approached by cutters seeking a buyout partner.
When Anda took charge, her first task was to manage the company's move from its historical home on Savile Row – the lease was up and the building's owner was redeveloping the property – to new premises around the corner on Old Burlington Street. Successfully managing the transplantation after 99 years on the Row could not have been easy.
'The moment it really changed was when the first long-standing customer came into the new shop and said, 'Oh, wow, this is nice,'' she recalls. 'And then from that moment on, confidence was well established.'
Looking back, she says that being 'an outsider' to the Row was useful, and I suspect it informed her next move too. In 2012, she launched the company's first ready-to-wear range and opened a dedicated shop around the corner on Clifford Street – Anderson & Sheppard Haberdashery.
Here you can buy socks for £30 or off-the-peg trousers, suits or coats priced at anything up to the low thousands of pounds. The garments are predominantly from the UK, the intention being to complement the bespoke tailoring business by supplying items
for the rest of a customer's wardrobe but also to provide a lower price of entry to the brand (after all, a bespoke suit costs upwards of £6,000).
Rowland brings a business acumen doubtlessly informed by close observation of her late father at work as well as her own business experience and time spent studying for an MBA at Insead in Paris. Asked to list her main achievements over 20 years at the helm, her first is apprenticeships.
'When I arrived we really didn't have many apprentices. We didn't have succession.' This was dangerous when it takes four to five years to train a suit maker or a fabric cutter. Now the business has seven apprentices in its 32-strong workforce. 'That, I think, is one of the biggest achievements.'
Her second biggest achievement has been broadening the customer base: 'When I joined we were reliant on 40-50 people ordering quite a bit. Now we have more customers ordering less.'
New bespoke clients
These days the company recruits around three new bespoke clients a week – either through the ready-to-wear shop or via the extensive trunk tours of the US and Far East. Sales were up 8pc on the year.
Americans account for 42pc of bespoke sales, compared to 35pc from the UK, 18pc in Europe and 5pc in the rest of the world.
This year, before Trump announced his tariffs, Anderson & Sheppard was forecasting £7m turnover, with the aim of reaching £10m by around 2027. Crucially, growth must be accomplished while staying true to the firm's heritage.
'The biggest achievement is not having changed the spirit of Anderson & Sheppard – that our long-standing customers still feel that it's the same, the same ethos, the same love and attention to detail,' Rowland says.
This has helped by staff retention, says Rowland, for which they're 'probably the best in Savile Row'.
For all this, Rowland acknowledges much of what they do doesn't quite make sense. 'Who would set up manufacturing in one of the world's most expensive retail areas?' she laughs. 'I mean, you'd have to be mad with the business rates, the rents.'
But this again was also part of the rationale for the ready-to-wear shop and her strategy for the future. 'This side of the business can expand,' she explains of the haberdashery. 'But it's also about the long term, to make sure that we can continue doing what we do that we consider to be the best in the world, to stabilise the hand-making.'
Looking ahead, Rowland wants to grow online ready-to-wear sales, which account for around 10pc of turnover. 'The smartest thing we can do now is to improve our online offering,' she says. After that she hopes to open a second haberdashery shop in New York, subject to an anticipated improvement in US-UK trade terms.
At the heart of Rowland's approach is the need for the business to remain profitable in order retain and motivate staff. 'It's got to be a success, and it should be,' says Rowland. 'What we make is really, really good.'
The secret, she believes, is to move at a gentle pace. 'You don't want to stress a business like this – there's no need. We're not looking to sell out to some private equity firm and to get minimum numbers and [to] take it on and trash it.' On the contrary, she says, it's a case of 'slowly, slowly, with everybody on board.'
As to Rowland's requests of the Government, aside from restoring tax-free shopping, she says textiles companies are struggling with a shortage of skilled workers – a consequence of the Brexit travel restrictions. The recent rise in employers' National Insurance contributions is another headwind the industry didn't need.
Despite all this, the proprietor of Anderson and Sheppard is optimistic for the future of her business and Savile Row, too.
'It's world class, Savile Row,' says Rowland. 'What we're doing is a small, tiny industry, but we're first in it.'