Manufacturing sector Brompton stockpiles £1m of bike parts in case of hard Brexit
Firm says preparations for import delays are key part of ‘shit hits the fan planning’
Brompton Bicycle has built up a £1m stockpile of bike parts including wheel rims, spokes and steel, to guarantee supplies for its west London factory in case of a hard Brexit.
The foldable bike maker, which increased sales by 11% to £36.1m in the year to March 2018, has rented a warehouse near Heathrow to store an extra month’s worth of supplies in case imports of key items are held up by problems at ports if no deal is reached with the EU in the coming months.
“Taking storage [has cost us] £50,000 but the implications of running out [of parts] could be £50,000 in a few days,” said Will Butler-Adams, the chief executive of the bike maker.
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Butler-Adams said Brompton, which exports 71% of its bikes, had hired advisory firm Grant Thornton to help it with “shit hits the fan planning” and identified imports of parts as a key risk. Similar tactics have been adopted by a number of British manufacturers, food processors and retailers including car maker Bentley, pharmaceutical firms such as Sanofi and off licence Majestic Wine.
Butler-Adams said the group was concerned that materials coming from Asia and even the UK could be affected as well as those from Europe because of potential disruption at ports and because, for example, British steel maker would import materials from abroad.
“The most important thing is that we are going to continue to make through Brexit. The rest we’ll muddle through,” he said.
The challenge of Brexit comes just as Brompton hopes to finally bounce back from a period during which profits were depressed by investment in a new factory in Greenford, west London, which opened just over two years ago, and the development of a foldable electric bike. It has also been taking on direct distribution of its bikes around the world, with plans to open stores in Singapore and Paris and a second outlet in London this year.
Profits rose by nearly 24% to £3.1m in the year to March 2018, according to accounts just published at Companies House. Butler-Adams said the company was hoping to finally top the £3.4m profit it made in 2014 this year.
Brompton has sold 750 of its electric bikes in the UK since launching in August and hopes to sell about 5,000 this year, starting with Benelux next month and then Spain, France, the US and Germany.
Butler-Adams said Brompton’s sales in the UK had continued to rise despite wider problems in the bike market which saw major retailer Evans Cycles fall into administration last year.
“The bike market is still mostly recreational but we are selling in the ‘useful tool for living’ market. When things are a bit challenging selling something useful is a strong asset,” he said.
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