Whether or not Brexit was to be introduced, and prior to the vote, Brits were warned it would make a big impact on businesses both large and small.
This year alone we’ve seen the demise of Maplin, Toys R Us, construction giant Carillion, Warren Evans (bed, mattress and furniture retailers), fashion brands Joe Bloggs and East and quite a few more according to the Norwich Centre for Retail Research – and it is only a quarter of the way through the year.
Last year, there were more retailers with big names like Beales, Staples and Ben Sherman. In some ways, the Brexit vote has created a fluctuating market in industries like the gaming industry where UK casinos cater to a European market with a population of nearly 500,000,000.
Large gaming giant, Bet365 was on very close to moving headquarters to Europe from the UK last year, when taxes increased dramatically. Whilst they remain here, EU online gambling regulations may in future mean they do not have access to the trading bloc in the EU.
The UK’s liquidation advice centre wonders at when the true impact of Brexit will be felt for smaller businesses. It also seems to boil down to certain variables including the UK’s position in European Economic Area (or EEA) and its participation in the Customs Union. Other factors influencing the likely demise will include the number of European employees, where it trades and the type of industry/business involved.
The pound sterling forecast seems to have been the main thrust of the problem too. Forex fluctuations based around speculation of what may happen have caused the pound to slump. In 2016, the pound had a slump the lowest recorded in 31 years, following the Brexit vote. The pound went0 down at more than 10% ($1.33), compared with $1.50 just after polling stations shut. This was the lowest rate recorded since 1985 and equated to a downshift of 7% against the euro.
Other reports show Brexit is a theme in many decisions for CEOs of companies. It comes as no surprise the Deutsche Bank wanted to move 4,000 of its employees (or half its workforce) from the UK, being aligned with the Bundesbank (the most influential member of the European System of Central Banks due to its former size). Other companies are choosing to relocate to Ireland including Barclays Bank and Diageo drinks company is moving to Scotland. Research by the gaming industry trade body UKIE found that 40 per cent of games companies in the UK were thinking of relocating following Brexit. The core reason cited for this is the loss of international talent from EU countries creating a skills shortage, with 57 per cent of group suggesting that they employed staff from member states across the union. Other companies deciding to potentially move include Goldman Sachs, Microsoft and Lloyds of London Insurance.
Whilst Brexit continues to be uncertain – for the government have been criticised for being slow to make headway (and figures of up to ten years have been cited for full removal from the EU) – the landscape sets to remain unstable. This is not easy for business planning and decision-making, and we could see much further shaky decisions on the behalf of CEOs of companies across the UK.