Brompton Bikes Brexit
Foldable bike maker Brompton Bicycle has created a £1million stockpile of bike parts to ensure that it can continue to supply its west London factory in the event of a hard Brexit.
The company’s stockpile of parts includes wheel rims, spokes and steel – at least a month’s supply – all of which have been stored in a rented warehouse near Heathrow in case a no-deal Brexit results in trouble with imports from outside the United Kingdom.
Brompton Bicycle saw an increase in sales by 11% to £36.1million in the run up to March 2018, and naturally the company are keen to preserve their future viability.
“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, Brompton Bicycle chief executive.
“We’re not only stockpiling stuff from Europe but from anywhere we buy abroad. If the ports . . . are [congested], whether the stuff is coming from Europe or not, it’s all going to get blocked.
“We’re saying to UK supplier: ‘either build stock — we’ll pay for it, you store it in the UK — or if you can’t do that we’ll buy it off you and store it ourselves’.”
Brompton hired advisory firm Grant Thornton to provide assistance in the event of any potentially- catastrophic Brexit scenario, as the company exports 71% of its bikes. This sort of preventative action isn’t unique to the company either, with a number of other British manufacturers, including car giant Bentley, taking on a similar approach.
Mr Butler-Adams added that there are concerns among manufacturers that materials being imported into the UK from Europe and Asia could face disruption at ports, slowing down their production rates and, ultimately, reducing their profit margins.
“The most important thing is that we are going to continue to make through Brexit. The rest we’ll muddle through,” he said.
Britain will depart from the EU on March 29 one way or the other, and if no ‘divorce’ settlement is agreed in time, World Trade Organization arrangements will see tariffs kick in with many goods while customs checks begin taking place at borders.
Brompton Bicycles is a company with history, and are doing their level best to ensure that they survive Brexit. The company was founded in 1976 by engineer Andrew Ritchie, and as of 2019 is still an industry pioneer in small-scale UK bike manufacturing.
Brompton’s annual pre-tax profit leapt an impressive one-quarter to £3.1million in the period which ended on March 31 2018 as its turnover scaled up; the company’s small-wheeled, compact bikes are a huge hit with people living in cities throughout the world, with seven in every ten models exported outside the UK.
The company plan on opening additional stores in Singapore and Paris, and adding an extra one in London.
According to Cycle Weekly [https://www.cyclingweekly.com/group-tests/brompton-bikes-398529]: “The decision to maintain a base in London was motivated in part by a desire to maintain the expertise of the brazers – each who have been trained over a period of eighteen months to hand join the components of a Brompton frame to be strong and resilient.”
Cycle Weekly go on to explain that the chassis of each Brompton bike runs on 16-inch wheels and “is constructed from steel, fused together with brass in most cases”. Brompton also have a ‘superlight’ version of the model with a titanium rear frame and front fork.
Despite the company’s success, however, Brexit presents a unique challenge to it and all other British manufacturers. The company are hoping to finally leave a period of low profits resulting from significant investment in their new factory in Greenford, west London. The factory, which opened two years ago, came alongside the development of a foldable electric bike, which have been hugely popular since their release.
750 of Brompton’s electric bikes have been sold in the UK since their initial launch in August, with the company hoping it can sell 5,000 in 2019. Mr Butler-Adams was encouraged that Brompton’s UK sales continued to rise in spite of the bike market’s wider issues.
“The bike market is still mostly recreational but we are selling in the ‘useful tool for living’ market,” he said.
“When things are a bit challenging selling something useful is a strong asset.”
Heres a video of how Bromptons are made, still manufactured in London and sent to 44 different countries.