A sort of A British cycling entrepreneur says Brexit has left his business in limbo and left him with a £100,000 income shortfall, and blames the government for not doing enough to mitigate its impact on small UK exporters.
Cycloc, known for its unique indoor bike storage and accessories, whose clients include Stella McCartney, Jonathan Ross and cycling star Mark Cavendish, said its business was down due to the EU accounting for 50 per cent of its business before Brexit 25%. overall sales.
“It’s very disappointing. I’m a naturally optimistic person, but in a way it’s hard to be optimistic,” said the company’s founder and designer Andrew Lang in his east London studio.
“One of the things that has been very disappointing throughout the process is that, from the very beginning, we actively decided to manufacture in the UK. We’ve stayed true to that and it doesn’t feel as though the UK government has necessarily helped us.”
Cycloc’s products have been a success for small UK businesses, and their attractive wall mounts are popular with car owners who want to store them safely inside their expensive wheels. They are used by some of the world’s leading bike brands, including Pinerello, whose bikes cost upwards of £15,000.
A professional product designer, Lang launched injection molded products in 2006. They were quickly embraced by cycling enthusiasts, professionals and dealers, and in 2009 won the prestigious Eurobike Award, the Oscars of cycling.
Distributors across the EU love the wall-mounted bikes, which, with prices from £43, allow bikes to be hung in “any orientation or space”, preventing them from cluttering corridors across the continent.
By the time of Brexit, business was booming, with 10,000 units sold each year in the EU, and an annual turnover of £450,000.
But once the new rules came into effect in January 2021 after the transition period ended, business started to slow, especially after Amazon stopped fulfilling orders for individual EU customers buying from the UK.
Cycloc’s head of operations, Clare Lowe, said confidence in UK products had also declined, with some “EU distributors stopping orders, citing high transport and customs clearance costs”.
The company went to great lengths to break through what Lang called “Kafkaesque” Brexit red tape, opening a warehouse in the Netherlands in late 2021 to ensure that only each truck crossing from Dover was needed rather than individual units to complete the expensive Paperwork.
The aim is to enable direct-to-EU consumer sales from its website and Amazon, as well as small business sales to bike shops, but there will still be an additional £10,000 administrative fee.
As 2022 progresses, it becomes clear that EU consumer sales “will not return to pre-Brexit levels” and warehouses will be in the red.
“To say the Brexit process has been difficult would be an understatement,” Lowe said. “Within 12 months of it being up and running, we had to make the decision to shut it down because it couldn’t cover the costs.”
Cycloc’s products are still sold directly to EU customers through Ireland’s ‘import one-stop shop’, an automated service covering complex VAT compliance procedures.
Its experience is not unique, underscoring the continuing damage Brexit has done to small exporters who cannot absorb new administrative burdens as easily as big businesses.
Cycloc’s experience mirrors that of the Cheshire Cheese Company, which made global headlines in 2021 when it announced that Brexit would cost it £250,000 in revenue, leading a government minister to suggest it look to global markets to fill the UK The Brexit loophole. In November, its owner Simon Spurrell said those losses had ballooned to £600,000 and he had sold the company to a bigger rival to improve his chances of entering the single market.
Lang also touched on the broader fallout from Brexit, which has distracted the company from expanding its product range. “We have about half a dozen products in the pipeline that are at a very advanced stage, but because of the other Brexit costs and issues we are facing, we cannot invest in bringing these products to market,” he said.
Looking back on the difficult decision to close the warehouse business, Lang said he couldn’t understand why the government wasn’t doing more to support small UK manufacturers like his.
Marketing chief Patron McCleary said the company was now trying to “pivot quickly” to new markets in the US, Asia, Australia and South Africa, but the “learning” to enter those markets was also consuming resources.
“In places like China or Hong Kong, I had to learn a lot about the culture, buying habits and how people perceive British products. It would have been easier in Europe, but because of how bad Brexit actually is, we actually had to Very reactive rather than proactive,” he said.
The government has not commented on Cycloc’s experience. Its Trade and Cooperation Agreement (TCA), signed in December 2020, is the “world’s largest zero-tariff and zero-quota agreement,” a spokesman said, and it has established export support services “so businesses can take full advantage of the TCA.” “.
They added that the UK was investing further to streamline exports, with recent figures showing trade with the EU was up 0.5% from the third quarter of 2019.
