Award-winning young entrepreneur's Brexit opportunities
E-TAILER: Myles Shaw 'in' Piccadilly Circus.
By Grimsby Telegraph | Posted: 28 Mar 2017
THE prospect of triggering Article 50 sent shockwaves through the economy as markets analysed the leave vote nine months ago. Tomorrow, it is anticipated, will be activation day.
And while the pound’s lower standing against the Euro and many other international currencies is something of a lasting legacy, albeit also due to sterling's dramatic run in 2015 pre-Brexit, manufacturing, high street spending and the housing market have all returned to strong form.
Here, having been part of a Lloyds Ambition Index Report that underlined how three in 10 small and medium sized businesses in this region see it as an opportunity, Grimsby flooring specialist Myles Shaw gives his take. It comes 12 months on from when his Carpet Runners UK online business passed the £1 million turnover mark, an achievement that saw him go on to be crowned Northern Lincolnshire’s Young Entrepreneur of the Year.
“Quite simply, ‘Brexit’ has been fantastic for us,” said Mr Shaw, who is also managing director of Freeman Street retail store Grimsby Carpet Warehouse. “Rather than focusing on what we will lose – like the rest of the country seem to be doing – I have been focusing on where we can gain.”
When European sales dipped in the online business from very late June 2016, he built on what was coming to him, looking deeper at new markets, taking the business to new territories while building on that “special relationship” with the USA. And while raw material increases of between 2.5 per cent and 10 per cent have been felt, the top line sales have more than made up for the additional costs.
“We didn’t know Brexit had affected us until I started getting questions about why so much of what we did was being shipped to America,” Mr Shaw said. All orders were coming in though the UK site, with the only difference being the postage options by those clicking away in homes and businesses around the world.
“When Brexit happened, European sales dropped off the radar. Initially we thought ‘that’s not great’ and put it down to uncertainty, and felt sure they would pick back up.
“They never picked up, but we were getting more and more sales from America. I didn’t think it was Brexit particularly, I didn’t get that involved, I’m not overly political, and we were busy doing what we were doing.
“But the sales continued, at a fantastic level.”
He looked more carefully at it.
“Since Brexit, the value of the pound has been decreasing against the dollar, which has made our products more competitive. Then there was (the election of) President Donald Trump, positive talk on a trade deal with the UK, and it created momentum, so we thought let’s launch an American website.
CarpetrunnersUSA.com was born, launching three days ago. “The US population feels very comfortable dealing with the UK, and the main thing is that both economies are doing well,” Mr Shaw said.
“So then we thought, if this is how the US feels, how does the rest of the world see it?
“Through adversity comes opportunity, so the saying goes, so we purchased Carpetrunners.AU (Australia), Carpetrunners.CA (Canada), and very quickly we were getting sales from them.
“And more importantly, we are still getting sales from Europe through the existing site.”
The model is now being rolled out with websites for France, Germany, Belgium, Spain, Italy and Ireland. “By the end of the year, when Brexit is triggered and it has settled down, we will have a Carpet Runners website in all of the countries we are now selling to,” he enthused.
It is quite a step from the business that began with an eBay punt on a spare roll of carpet runner that has been kicking around the warehouse of the family retail business.
A week later it had brought in £400, and more and more stocks were bought, being sold online before the supplier had been paid.
Such were the volumes they went direct to Germany for supply, and this is where Brexit has brought a slight challenge, though sales are more than making up for it.
“The flip side is we feel the pinch on raw material costs,” Mr Shaw said. Germany, Belgium and Egypt are the three main markets the business buys from.
“Prices have gone up, and the last thing we as a retailer want to do is put the price up, but we have seen it (the pound) continuing to fall month on month, and the wholesalers and manufacturers now send a new price list every single month.
“The more we buy the better discount we get, and we have just got to be clever with our ordering.
“We are just not trying to focus on that. What I am doing is building our presence around the world online.”
In the past 12 months staff have increased from 12 to 19, and turnover has increased 20 per cent to £1.2 million.
Currently the firm is on a trajectory of 78 weeks of consecutive weekly growth, and the vision is for it to keep running.
He is aiming for £1.7 million for Carpet Runners by the end of this year, with the town retail store contributing to an envisaged £3 million total.
“For the year of 2018, we hoping to reach an online turnover of £3.5 million and a turnover of £1.5 million for GCW,” he added, with £10 million that target for his 35th birthday, five years from now.