Shift in expansion plans see company turn focus from Europe to the United States.
For Appleyard London’s Managing Director Tash Kahn, it seems that the disruption currently caused by the uncertainty of Brexit is effecting his bottom line due to spiralling currency costs.
Appleyard London are a boutique florist that offer luxury, hand-tied bouquets and special arrangements and they say although current additional costs owing to the decline in Sterling are being met by the company, he hasn't ruled out passing it on to the customer in the long run.
In terms of strategy, the company is keen to expand, but with ongoing negotiations in Europe due to take some time, it makes financial sense to look instead to the USA market.
There may be some prudence in this; if the Dollar continues to surge against the Pound taking money in a different currency could offset some of the additional costs faced when importing from across the pond.
In terms of the exit strategy when Article 50 is triggered, Appleyard would suffer greatly if free movement of people was restricted, as a lot of their workforce are Eastern Europeans who are looking for transient and perhaps even seasonal working patterns.
However, they are looking to expand their supplier base internally within the UK, which can only be good news for our smaller, home grown businesses who could flourish under a renewed passion to source locally. Of course this isn't just restricted to the floristry industry, and the benefits of 'buying British' may indeed be felt across the economy.
What Kahn wants to emphasise to Teresa May however, is that without trade agreements in place, business and most importantly profitability, would be severely hit.
Appleyard London: A Change in Direction
Managing Director, Tash Kahn, talks to Pound Sterling Live about a change in expansion, concern over free movement of people and discusses what decisions from the new cabinet would be good for business.
Please tell me a little bit about the company in a nutshell
Appleyard London was born out of a passion for boutique floral design. We have a small team of experienced creative florists and a dedicated team of customer care professionals to ensure that your shopping experience is nothing short of perfect.
What industry do you work in?
We are in the floristry business, specialising in luxury bouquets and gifting.
Can you provide me with some statistics of your export business
As a result of the referendum on leaving the EU we have had to change our strategy. Now, due to currency fluctuations, instead of taking our business in to the EU as planned we are looking at expanding in to the USA.
Have you been effected by currency fluctuations?
Yes - we buy mainly flowers from Holland and Kenya and have suffered due to Dollar / Euro depreciation against the Pound.
Have your products incurred a price increase since the referendum?
We have currently absorbed cost increase but are contemplating passing it on.
Have your imports increased/decreased?
They are the same.
Has your long-term strategy changed?
As a result of the referendum to leave the EU we have had to change our strategy. Now, due to currency fluctuations, instead of taking our business in to the EU as planned we are looking at expanding in to the USA.
Has your short-term strategy changed?
We have decided due to price increase we are reviewing supplier contracts with a focus on British growers and suppliers.
(Interestingly, the Bank of England said this is the kind of behaviour they expected to happen on the back of Sterling's appreciation when the released their August 2016 Inflation Report. They see this as positive side-effect for the UK economy).
Were you happy with the referendum result?
Would restricted freedom of movement effect your employees?
Yes, as the majority of our fulfilment is carried out by Eastern Europeans as we struggle to recruit English-born staff in Lincolnshire to arrange our bouquets.
Before the referendum did you have any plans to expand or relocate?
Before the referendum we were exploring avenues of expanding in to Europe, looking in to the option of Germany and France. This is now on hold.
Have these plans changed?
Yes - Our plans to enter Germany and France are now frozen.
Do you see any further complications arising after Brexit?
Yes - depending on the agreement and terms agreed there may be further complications, but it’s impossible to predict at the moment due to uncertainty surrounding it.
What advice would you give to Theresa May and her Government?
I would say whatever we agree with the EU, we need freedom of movement and freedom of trade.
Whilst the country has decided to leave EU we need to make sure we get a trade agreement that works for us and is good for business in general to ensure future profitability and success.
What Do Appleyard London Do?
Appleyard London believe that everyone should have a little luxury in their lives.
The company is mindful of their environmental impact and strive to be as respectful to the natural environment as possible, as they say - "our flowers deserve it".
Flowers are sourced where possible from British growers and packaging is designed to produce minimal waste.
All of the bouquets are hand-tied at Appleyard London's UK floristry centre with love and care by a team of experienced florists.