a British cycling entrepreneur says Britain’s exit from the European Union It ruined his business and left him with a £100,000 hole in revenue, accusing the government of failing to do enough to mitigate its impact on small British exporters.
Cycloc, which has made a name for its premium indoor storage of bikes and accessories and includes Stella McCartney, Jonathan Ross and cycling star Mark Cavendish among its clients, says the EU accounted for 50% of its business before Brexit. Total sales.
“It is very disappointing. “I’m an optimist by nature, but it’s very hard to be positive,” said the company’s founder and designer, Andrew Lang, in his east London studio.
“One of the things that’s quite disappointing about this whole process is that from the start, we’ve taken an active decision to manufacture in the UK. We’ve stayed true to that, and it’s almost as if the UK government didn’t necessarily help us.”
Cycloc products have been a success story for the British small business thanks to their amazing wall hangers that are popular with owners of expensive wheels who want to store them safely indoors. They are used by some of the world’s leading brands, including Pinerello, whose bikes can sell for up to £15,000.
A product designer by profession, Lang launched the injection-molded products in 2006. They quickly found favor among bike enthusiasts, professionals and distributors, earning Eurobike’s prestigious award in 2009, the Oscar of the bike sector.
Distributors across the EU have stocked the wall-mounted blocks, which cost from £43 and hang bikes in ‘any direction or space’, keeping them from cluttering lanes across the continent.
By the time Brexit came around, business was flying with 10,000 units sold in the EU each year and an annual turnover of £450,000.
But once the new rules came into effect in January 2021 after the end of the transition period, business began to slow, especially after Amazon stopped fulfilling orders for individual customers in the European Union who buy from Britain.
There has also been a decline in confidence in UK products, says Cycloc’s COO Claire Lowe, with “some EU distributors stopping placing orders, citing the cost of shipping and customs clearance as prohibitive”.
The company has gone out of its way to get around what Lang calls “Kafkaesque” Brexit red tape by opening a warehouse in the Netherlands at the end of 2021 to ensure that costly paperwork only takes place for each Dover transit truck and not for each individual unit.
The aim was to bring direct consumer business to the EU from its website, Amazon and small business sales to bike shops, but it still cost an extra £10,000 in overhead.
As 2022 progresses, it becomes clear that EU consumer sales “will not return to pre-Brexit levels” and that the warehouse will operate at a loss.
Lowe said: “To say the Brexit process was gallant is an understatement.” “Within 12 months of getting it up and running, we just had to make this decision to shut it down because it wasn’t making ends meet.”
Cycloc products are still sold directly to customers in the EU via a ‘one-stop import shop’ in Ireland, an automated service to cover complex VAT compliance procedures.
Her experience is not unique and highlights the continuing damage Brexit causes to small exporters who cannot easily absorb the new administrative burden as the big firms.
Cycloc’s experiment mirrors that of the Cheshire Cheese Company, which made headlines around the world in 2021, when He announced that Brexit had cost it £250,000 in lost revenue This prompted a government minister to propose it to the global market to fill the Brexit gap. Last November, those losses had ballooned to £600,000, owner Simon Spurrell said. He sold the company to a larger competitor to improve its access to the single market.
Lang also tells of the broader impact of Brexit, diverting the company’s energies from expanding its product range. “We have about half a dozen products in the pipeline and they’re at a very advanced stage but we haven’t been able to commit capital to bring these products to market yet because of the costs and other Brexit-related issues that we’ve faced,” he said.
Reflecting on the difficult decision to shut down the warehouse operation, Lang said he couldn’t understand why the government wouldn’t support small British manufacturers like himself more.
The company is now trying to “transition very quickly” into new markets in the United States, Asia, Australia and South Africa, said Patron McCleary, chief marketing officer, but “learning” to get into those markets is also a drain on resources.
“In places like China or Hong Kong I have to learn a lot about the culture, buying habits and how British products are viewed. It would have been easier in Europe, but given how bad Brexit was, we actually had to be Reactive rather than being proactive.
The government has not commented on Cycloc’s trial. A spokesperson said the Trade and Cooperation Agreement (TCA) it signed in December 2020 was “the world’s largest zero-tariff, zero-quota deal” and created export support services “so that businesses can get the most out of TCA”.
They added that the UK is investing more to facilitate exports and recent data showed that trade with the EU rose 0.5% in the third quarter of 2019.