Cork furniture business putting in the time to ensure it is Brexit-ready
O’Donnell’s Furniture made deal with bank and is working closely with suppliers
A weakening sterling has caused issues for O’Donnell’s Furniture. Photograph: Bloomberg
Given that O’Donnell’s Furniture exports 80 per cent of its product to the United Kingdom, it’s not surprising that the west Cork firm has put significant time, thought and effort into its preparations for the impact of a hard Brexit.
Currency in terms of the exchange rates between Ireland and the UK is an issue, said general manager Katherine O’Sullivan, who oversees a workforce of 45 at the Skibbereen company. “Sterling was weakening which affected our income levels, because the sterling value of our projects decreased when converted into euro, and this meant profits were affected,” she said.
“We cannot raise our prices without affecting our competitiveness, so in that context our relationship with our bank is very important and we have maintained a strong relationship with our bank.”
O’Donnell’s has, she said, “hedged” a certain percentage of the company’s expected sterling income into the future.
“This means I make a deal with the bank on an exchange rate for our future sterling income and that cannot change regardless of circumstances. This provides us with stability and security as regards to our sterling income.”
The company is also working closely with suppliers in the UK, mainland Europe and Ireland to ensure continuity post-Brexit.
“These companies supply us with our board materials, metal and fixings for our products.
“As we are unable to stockpile because we produce furniture to order, we are ensuring that our suppliers are warehousing sufficient stock so that we can continue with our manufacturing work in the event of a hard border.
“We are also now classifying the materials we import from the UK in order to establish what potential duty might be incurred in the event of a hard border.”
Finally, she said, the company is remaining in close contact with clients, reassuring them that plans are in place to deal with any fallout from a hard Brexit.