The founder and designer of indoor wall-mounted bike storage manufacturer Cycloc has spoken out about the impact Brexit had on business, with sales down 25 per cent and a £100,000 hole in revenues.
Speaking to the Guardian from his east London studio, Andrew Lang said the fallout from the referendum in 2016 had been "very disappointing" and it is "very difficult to be positive" as "Kafkaesque" rules continue to lose Cycloc money.
Reviewing the company's original bike storage product in 2009, we described it as "elegant, simple, expensive bike storage that's more penthouse than outhouse" and Cycloc has since brought out numerous new products, including the Super Hero below.
However, Lang outlined how business has been affected by Brexit, saying it is disappointing to have lost out having "remained faithful" to manufacturing in the UK.
"It is very disappointing. I am a naturally optimistic person, but in a sense it is very difficult to be positive," he said.
"One of the things that is quite disappointing about this whole process is that from the outset, we made an active decision to manufacture in the UK. We've remained faithful to that and it feels as though the UK government hasn’t necessarily helped us.
"We have about half a dozen products in the pipeline that are in a very advanced stage but we've not been able to commit the capital to bring those to the market yet because of the other Brexit costs and problems we’ve been confronted with."
Cycloc had been enjoying success pre-referendum, with turnover of £450,000 and 10,000 units sold in the EU each year, however seven years later the picture is less positive — a 25 per cent decline in sales and a £100,000 hole in revenues.
The impact was not immediate but once rules came into effect in January 2021 business slowed and the company took a hit when Amazon stopped fulfilling orders for individual EU customers purchasing from the UK.
Head of operations Clare Lowe notes another problem with some "EU distributors stopping placing orders, citing cost of shipping and customs clearance as prohibitive".
Cycloc hoped opening a warehouse in the Netherlands would mean paperwork could be filled in with every truckload from Dover, rather than on each individual order, but this still racked up £10,000 in overheads.
Lowe explained that it was obvious EU sales were "not going to recover to their pre-Brexit levels" meaning the warehouse would be operating at a loss.
"To say the Brexit process was gritty is an understatement," she said. "Within 12 months of having got it up and running, we just had to take this decision to close it because it wasn’t covering its costs."
Head of marketing Patron McCleary explained how the focus has now turned to being "reactive" and trying to tap into new markets in the US, Asia, Australia and South Africa.
"In places like China or Hong Kong I'm having to learn a lot about the culture, about buying habits, and how British products are viewed. It would have been easier in Europe, but because of how bad Brexit actually was, we've actually had to be quite reactive rather than being proactive," he said.
The situation forced the Netherlands warehouse's closure, meaning products are now sold direct to EU customers via an automated "import one-stop shop" in Ireland, and has left Lang questioning why the government has not done more to support British manufacturers.
Various small businesses within the cycling industry struggled to adapt to the changes at the end of the transition period, Dutch Bike Bits were just one of the brands to stop accepting orders from UK customers due to a change in VAT rules.
Three months later, in April 2021, the co-owner of Frog Bikes — the children's bike manufacturer based out of a factory in Pontypool — said Brexit had cost him an extra £250,000 in the first two months of the year.
"I couldn't say there was anything positive," Jerry Lawson said at the time. "There's extra paperwork, and there are extra costs. And there's a whole lot of unknown.
"The paperwork is also incredible. To begin with, some of the countries wanted the paperwork in their language. Now we send them a commercial invoice with a whole lot of customs information. Plus, it's four or five times we have to print it.
Prendas Ciclismo, perhaps best known for its reissues of some of the most iconic cycling jerseys including the Molteni kit once sported by Eddy Merckx and La Vie Claire as worn by Bernard Hinault and Greg LeMond, also scaled back its operations due to the impact of Brexit on the business that summer.
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January 23, 2023 at 07:31PM
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"It is very difficult to be positive": Brexit lost Cycloc 25% of sales, founder reveals - road.cc
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