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news
Brexit Flickr Creative Commons"It is very difficult to be positive": Brexit lost Cycloc 25% of sales, founder reveals
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.
Dan is the road.cc news editor and joined in 2020 having previously written about nearly every other sport under the sun for the Express, and the weird and wonderful world of non-league football for The Non-League Paper. Dan has been at road.cc for four years and mainly writes news and tech articles as well as the occasional feature. He has hopefully kept you entertained on the live blog too.
Never fast enough to take things on the bike too seriously, when he's not working you'll find him exploring the south of England by two wheels at a leisurely weekend pace, or enjoying his favourite Scottish roads when visiting family. Sometimes he'll even load up the bags and ride up the whole way, he's a bit strange like that.
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55 comments
The Confederation of British Industry said exactly the same recently. Millions of sensible and knowledgeable people said this would happen. Brexit has increased red tape and shrunk growth. Exactly as was predicted - except by the swivel eyed brigade.
On a planet of finite size, constant growth is overrated.
I work for a large international company, and seeing the impact it has had on us it was clear smaller companies just wouldn't survive. From a functional perspective we had to move our European HQ out of London to the Netherlands, thankfully from an operational perspective London remained and most jobs were safe.
The red tape though is insane. Just shipping equipment between UK and EU is a nightmare and where we used to order equipment from a UK supplier who would ship to EU offices, we no longer do that. The Paris office handles it using a supplier in the EU.
Don't think the small businesses are getting across that it's now not worth buying from them for us in the EU. I bought two jerseys last summer that I had to then pay customs on at arrival that was about 40% of the original cost. And I mean the €\£ exchange on arrival and not the slightly better exchange I'd got on the day of purchase!
thats because those businesses are letting you pay the customs/VAT registration costs, instead of rolling it in as just a cost to their business and doing the sums so it pays for itself with price of the products they sold to you and sort it for you.
thats their choice, as it is your choice to shop elsewhere, thats how business works in capitalism you pays your money and you takes your choice.
with Cycloc, the article states they had a 50/50 split of the sales in the EU v UK, but have lost 25% sales overall, so its not all to do with Brexit or red tape is it ? theyve clearly lost sales in the UK as well.
and part of the issue appears to be they lost their Amazon EU delivery mechanism (you know the company who guardianistas say dont pay enough taxes...) but now do sales via Ireland to the EU, which seems reasonable solution to their EU supply.
so maybe, just maybe the issue is there isnt the sustainable demand for 10,000 bits of plastic to stick your bike to wall per year in the EU/UK. Once youve bought one, youre kind of sorted unless you keep buying n+1, and perhaps "pivoting" to the US and other markets when you live in a global economy was something they needed to think of sooner.
This is what I was thinking. It's not like these things wear out and need replacing. And I'm pretty sure if you move, you'll take them off the wall and fit them in the new place.
What?
It's possible sales in the UK have increased, stayed the same or reduced, it's , you can not come to the conclusion that UK sales have definitely fallen.
Pre Brexit 50 sales UK, and 50 Sales EU
Post Brexit 75 sales total,
could be 50 UK and 25 EU, as some EU customer put up with incrased costs
could be 75 UK and 0 EU, either due to growth in domestic market as people bought more bikes, or due to Cycloc stealing share from EU suppliers as UK customers see alternative EU products as unaffordable to to import costs
could be 37.5 from each, with Brexit not being a factor.
But we don't knw
My favourite joke at Christmas this year was about the Brexit advent calendar - every day, another door closes.
It would be funny if it weren't true. Off to the Alps at the weekend - got little stickers for the number plates, not sure if we're allowed to take food in the car for the journey, still trying to find out if I need a green card. The dog could come, but he's unacceptable unless he has the same paperwork as a cow.
Don't get me started on the trials of buying a house in the EU - a long-term plan now showing ominous engine fire and oil pressure warning lights....
Brexit, truly the gift that keeps on taking
But, but, but, but BLUE PASSPORTS! SUNLIT UPLANDS!! UNICORNS!!! £350m a week for the NHS!!!!
I sometimes listen to James O'Brien on LBC and he often has pro-Brexit voters ringing in to whine about how this isn't the Brexit they voted for.
Wotever...
That was always going to be a problem as "Brexit" wasn't sufficiently defined whereas "Remain" obviously had no wriggle room.
I'll repeat my favourite analogy of voting on what to have for dinner:
Given a distribution of 30% vegetarians, 30% pork only eaters, 30% beef only eaters and 10% any type of meat eaters, you can set up the vote to be either meat or no meat. Then, you end up with 30% voting for no meat and 70% voting for meat, but having counted the votes with a clear majority, the problem comes when trying to actually provide that dinner. Pork will only be acceptable to 40% and beef will only be acceptable to 40% too, so it's clear that the vote was poorly setup and the "meat" should have been defined.
That's a good analogy but to be more accurate it needs to include that beef was actually never an option and the person organising the dinner lied about the option of beef being available to try and make sure they got to organise the next dinner.
And also 45% of people were vegitarian....
I want chicken!
Lamb for dinner.
I seem to remember there were lots of impassioned statements about how Brexit was obviously not going to be a Hard Brexit. Instead, Brexit was going to further the fortunes of good old British businesses such as Britishvolt...
https://www.theguardian.com/environment/2023/jan/22/business-minister-boasted-britishvolt-brexit-success-months-before-collapse
BritishVolt was just a scam designed to milk venture capitalists and Government grants for every penny they could get whilst producing precisely nothing.
To that end it succeeded wonderfully.
I work with a number of people who voted for Brexit. I made a comment about how Brexit has messed things up last week. There was an embarrassed silence. They know but can't quite admit it yet.
I made another similar comment today that also met with silence. Previously, the Brexit supporters would've responded loudly and vociferously.
We'll never know now if it was possible to have a good brexit but I think you'll find that it was the Johnson government that messed things up (brexit and non brexit)
You can't really mess up something that is already a complete and utter farrage.
Leaving the Customs Union and European Econimic Area was stupid. It's that simple.
It has gone quiet, hasn't it. Those Brexit 'pluses' (formerly benefits) in full attached.
6, 7 and 8freedom of movement - ah yes, "the country is over-crowded" and "there would be more of these oh so finite resources to go around if there were less people consuming them" - the economics of simpletons and bigots.
The brexiter that posted this was really insistent about no 1 - like as opposed to the most restrictive and iffy UK govt in centuries.
Oh and we're not allowed another referendum because that would be like a football match continually being replayed (or something). I can't recall any serious narrative that said "the EU made us do x/ stopped us doing y so we're not accountable."
11 vaccines and 15 - ECHR: lies, and also see 1 above - your rights and protections all at threat.
10, 12 and 13 : Going well, is it? fishing, trade deals, lower food 😵💫 prices.
I don't know enough about GDP or the workings of inflation and interest rates, other than the last two are up at 30-40 year highs.
Point 11. We probably shouldn't be proud of our rolling out of COVID.
This is true
because the leave campaign was banging on about the success of Norway (european economic area) and Switzerland (EFTA) they never advocated
And the UK has ended up with neither of these, EEA includes Iceland, Norway, Turkey and the microstates. EFTA adds in Switzerland, leaving only Moldova, Russia and the UK outside of these arrangements. No Leave slogan ever extoled the benefits of Moldova.
But of course this comes back to the referendum and rational people pointing out that you can't trust the bunch of crooks like Rees Mogg, Baker and Johnson, and voters deciding that was paranoia
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