Joules makes no-deal Brexit plans

Clothing brand Joules has drawn up contingency plans to set up a third party distribution centre in Europe in the event of a no-deal Brexit.

In a trading update the company said the plans were necessary to “mitigate the expected disruption” that could arise in the increasingly likely event that MPs vote down the government’s proposed Brexit deal next Tuesday and fail to agree an alternative deal before March next year, leading to a disorderly exit from the EU.

Yesterday Mark Carney, governor of the Bank of England, told MPs that the most extreme form of a ‘no-deal’ scenario could cause the UK economy to shrink by eight per cent and drive up shop prices by 10 per cent.

The results for the first half of the firm’s financial year to 25 November showed that revenue was up by 17.6 per cent to £113.1 million, with rapid growth in the company’s international business, which represents 16 per cent of total group revenue.

The statement also said that the firm’s e-commerce operations performed particularly well over the period, accounting for nearly 50 per cent of all retail sales, which the group said was proof that its integrated ‘cross-channel’ model was “well suited to meet changing shopping behaviours”.

Citing “continued macroeconomic uncertainty” and a highly competitive environment, stoked by rapidly changing shopping behaviours, the group said that trading conditions in the UK would remain challenging over the near term.

The statement read: “Contingency plans have been put in place to mitigate the expected disruption that could arise in the event of a ‘hard Brexit’.

“These plans include establishing an EU based third party distribution facility; scheduling earlier inbound product deliveries for our Spring/Summer 2019 ranges; preparation for expected increased administrative activities.”

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