During the Wimbledon championships, Steve and Adriana Walkington are run off their feet. Their fast-growing company, Zoe Alexander, which they set up in Canterbury a few years ago, provides chic tennis clothes for children aged between four and 12.
Orders pile up at this time of year from people in the UK, from the European Union, the US, the far east, Canada and Japan. The business is benefiting from a surge in interest in tennis across the globe.
“Off the back of the French Open at Roland Garros things start to go a little frantic, and then with Wimbledon it all goes a bit nuts as the young players want to be in the latest gear,” says Steve.
But expanding a business with worldwide markets to its full potential from the UK these days can mean extra barriers because of Brexit, delays to shipping, and far higher costs to customers. So those placing orders for Zoe Alexander clothes online from the UK and wanting them delivered are now told of a new reality.
“We are now relocated in Europe,” the company tells them. “Sadly, due to Brexit and UK lockdown restrictions, we had to leave England to allow our business to survive and grow.”
The Walkingtons decided they had to relocate lock, stock and barrel with their two children – after whom the company is named – last autumn and are now in the process of moving into new premises in Romania, where they are not only free of Brexit bureaucracy but are also benefiting from abundant skilled labour and help from the country’s authorities.
Six months after the UK finally left the EU’s single market, thousands of other small companies have faced similar problems, and many have either relocated entirely to the EU or set up branches or warehouses inside the EU to avoid the export delays and costs. Advisers at the Department for International Trade have encouraged many to do so. The authorities in EU countries including the Netherlands, Austria and Romania are going out of their way to help UK companies shift their operations to the continent, knowing local jobs and new economic activity will be created.
By moving back inside the single market, companies with a large EU customer base can also transport goods in bulk, avoiding the charges on individual items that have led to higher costs. They can also avoid the problem of VAT charges hitting their customers.
Of those small businesses that have stayed put, a high proportion report continuing negative effects on trade, despite the UK government’s claims at the turn of the year that any difficulties they would face would be merely temporary “teething problems”. A recent survey of 651 UK companies by the Institute of Directors for the Financial Times found that of those that trade with the EU, 31% said they had suffered negative impacts on their trade to customers in EU member states. Only 6% said things had got better since Brexit, and 58% reported no change.
Last month, an analysis from HMRC showed that British food exports had fallen by £2bn in the first three months of 2021, with sales of dairy products plummeting by 90%.
Brexit checks, stockpiling and Covid are often blamed for much of the downturn but the sector has said the figures show structural rather than teething problems with the UK’s departure from the EU.
For Zoe Alexander there is, it seems, no coming back. It is now well set up in Prahova, in Romania, employing a dozen people and hoping soon to take on more.
Steve says an order from an EU customer on a Monday will be delivered the next day. But for UK customers wanting smart gear for their tennis-playing children it is nothing like such a quick service, with add-on charges, including courier costs, having tripled. “I think it is going to continue impacting UK businesses, full stop,” says Steve.