‘Businesses need to survive the initial impact of Brexit’
Brexit Proof: Marcus and Vanessa MacInnes, founders of Industry & Co
Marcus and Vanessa MacInnes of Industry & Co
Founded in 2010 by brother and sister team Marcus and Vanessa MacInnes, Industry & Co has grown from a small boutique store in Temple Bar to a major retail design hub employing about 40 people. Its flagship store on Dublin’s Drury Street offers homeware, lighting, furniture, gifts and other products and an in-store cafe, while Barn on Exchequer Street offers children’s home and lifestyle products.
What was your reaction when you heard the UK had voted to leave the EU?
When the vote came in, it certainly put the nail in the coffin for wanting to work with UK companies. Up until now our biggest barrier had always been the British pound. Not being able to take advantage of the ease of same currency and same-day bank transfers was already a pain compared with others in the euro zone, but was still very doable. Now things are potentially going to get more difficult.
How is your business likely to be affected?
A no-deal Brexit, which is looking increasingly likely, will no doubt negatively affect us and we’re working on minimising this. The vast majority of our imports come via the UK. In a no-deal Brexit, our customers and Irish consumers could face significant price increases to cover potentially non-reclaimable UK VAT at 20 per cent, import duties, customs, additional certification requirements and logistical delays. Luckily, as a retail store, we have it a lot easier than the many Irish manufacturing companies with large UK customer bases who have far fewer options.
When did you begin preparing for Brexit and what contingency plans have you put in place so far?
As a retailer, we felt it was important that both our UK and European suppliers be made fully aware of the impact a no-deal Brexit will have on their business with Ireland, as this is ultimately a shared problem that requires thinking and planning on both sides. As a small, independent Irish business, the cost of implementing contingencies can often be prohibitive. The vast uncertainty surrounding Brexit adds significantly to the reluctance to invest in expensive plans that may or may not be of benefit at the end of the day.
Does Brexit present any opportunities for your business?
Watching the UK fall on it’s own sword, as it were, will no doubt present countless opportunities for companies to take business away from this territory. Unfortunately, retail and hospitality sectors are unlikely to benefit.
Are you examining new markets/suppliers and, if so, how practical is that?
I can’t think of a single UK supplier that could not be replaced by an equally good, if not better, European supplier – albeit at an increased transport cost. Dependency on UK suppliers is not the problem facing our business. The real problem is that the UK is the transport hub for the majority of Ireland’s imports and exports from mainland Europe where goods route via UK ports and road infrastructure, thus subjecting them to UK VAT, duties and regulations.
Further developing and improving capacity at our direct shipping route to and from Europe at Rosslare is something I sincerely hope is top of the Government’s agenda.
What’s your best/worst-case scenario?
In a best-case scenario, the UK will hold a much-needed second referendum and collectively come to their senses. However, this is looking increasingly unlikely. But hopefully, we will see enough compromise to allow for a trade deal to be done between both sides. No-deal is the worst possible scenario for all concerned and I dread to think of the potential for negative impact on all of us.
Are you stockpiling goods/raw materials?
To some extent, yes. This is one of the few opportunities we have to take back control and be in a position to continue providing for customers in the short term. Luckily we have a great relationship with our bank, AIB, who have helped us put contingency cash flow in place to allow for this to happen.
How might the Irish or British governments, or the EU help ease the pain of Brexit for your company or sector?
We received a formal guidance for Irish companies from Revenue a few weeks ago in which they highlighted key areas businesses need to consider and prepare for Brexit. While this information is welcome, the Government needs to understand that many businesses are struggling as it is, and concessions are needed to help soften or, better still, negate the impact that Brexit may bring. While Ireland is featuring heavily in EU/UK negotiations because of the backstop, I’m not sure that the economic impact of Brexit on Ireland is a top concern for the EU, and certainly doesn’t feature in the list of headaches facing the British government.
Looking out five years, how do you think your business or industry will have changed as a result of Brexit?
Businesses, ours included, need to survive the initial impact of Brexit which in my view has the potential to take many casualties in the short term. Small businesses don’t fare well when it comes to change, increased costs, increased paperwork, logistics and supply problems etc. I’m hopeful that a deal can be done between the EU and UK that will allow a seamless transition. Five years is a long way off in this new world – let’s get through the initial 12 months first.