BREXIT: Currency Arbitrage Via Luxury Brands

June 24, 2016 by Lila Delilah

Dissecting the geopolitical consequences of Great Britain’s vote to exit the EU is best left to the pundits. Watching markets and currencies shift so drastically, however, makes it very tempting to take advantage of retail’s pricing inefficiencies.

Most money managers and hedge experts consider such an anomaly an arbitrage opportunity. Arbitrage is defined as the simultaneous buying and selling of securities, currency, or commodities in different markets or in derivative forms in order to take advantage of differing prices for the same asset. In this instance, we can consider Chanel classics, Hermes Birkins or other fashion items to be our ‘asset’ or commodity.

If you’ve ever shopped in London, you know that the currency exchange normally makes the experience very expensive. As a matter of fact, it’s often cited as one of the most expensive places in the world to shop. Well, not right now. As the pound to dollar exchange hovers around 1.3, we couldn’t help running the numbers on some of our favorite luxury items.

Hermes Birkin 30 Togo
$11,300 New York
$8122 London
Savings of $3100 + VAT ‪back
Chanel new medium Boy Bag
$5200 New York
$4400 London
Savings of $800 + VAT back

Beyond looking at these high priced fashion classics, there are a few other international websites that will ship to the United States. You can shop at Net-A-Porter’s UK site and have the merchandise shipped to the US. A Gucci GG Marmont bag is $800 less expensive when you buy it on the British version of the site. There is also a large markdown section on the site, but the discounts aren’t as high as the US. You might need to check back and forth before committing to a currency.

In some instances, it might pay to shop from the UK version of a US retailer. For example, on Shopbop you can shop in British Sterling Pounds and ship to the US, Just make sure the shipping cost doesn’t overtake the benefit. Below is a list of sites that you can consider. Many even have some great sales. Happy BREXIT!!!

Charlotte Tilbury Cosmetics

Farfetch up to 70% off

Forward by Elyse Walker up to 50% off

Matches up to 50% off

Shopbop up to 70% off

Stylebop Up to 50% and extra 10% off for the weekend

The Corner Up to 70% off


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