A month on from the big vote, and as the business community continues to try to come to terms with the news that Britain has chosen to leave the EU, many have asked what the vote means for us here at TUSTING.
The Tusting family has been part of the global leather trade for nearly 150 years – we’re now on the fifth generation at the helm here – and we’ve had to navigate quite a few upheavals in trading arrangements in that time, a couple of World Wars included. Our business truly is a global one, not just a European one, but, like many other businesses, we rely on being part of the EU for both trade and economic reasons, and the decision to leave the EU was not the outcome we were hoping for.
We didn’t predict the volatile outcome in the recent referendum and still aren’t sure what the effect will be on our business in the long term. As all our employees are based here in our UK workshop we are already absorbing the high cost of labour in the UK. Potentially, the cost of UK labour in general could increase if there is a significant exit of migrant workers from the general workforce. On the other hand, our raw materials are predominately imported (from the EU and beyond) which exposes us to increased costs now that sterling has weakened.
As a luxury retailer, in times of financial uncertainty we often see a pull back from spending, and as the CBI recently reported, UK business confidence has taken a real beating from the Brexit decision. But whilst we have noticed a slight dip in UK sales immediately post-Brexit as the population waits to see what the effect of the vote will be on their pockets, we have also seen an enthusiastic and immediate uplift in our international sales. As a business with a long heritage, we’ve always been popular with the Eastern and USA markets whose knowledgeable shoppers value our quintessentially British provenance and products. The significant weakening of the pound against these key markets’ currencies has given them up to a 30% ‘discount’ on their previous purchase prices – that’s good for us and has got to be good for demand for genuine British luxury products generally.
But what could Brexit mean long-term for luxury small businesses like us?
Alistair Tusting, who now leads the company set up by his great-great Grandfather, comments: “if the currency remains at its 31 year low, luxury products from the UK, specifically in comparison to other providers still in the EU, suddenly become much more affordable to international customers, particularly those from the East or USA. These customers have a real taste for our high-quality British craftsmanship and, when you compare the prices of our products with those originating in Italy or France, our price point becomes much more attractive in these export markets. I see this as an opportunity to further expand our export business.”
In summary – Brexit has brought us ups and downs already and no doubt will continue to do so. However, no matter where our customers are based – in the UK, Europe or further afield – we’re always proud to deliver what we believe to be some of the best quality and well-crafted luxury leather accessories in the world, and we aim to keep doing that, however the new landscape pans out.