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news
CyclocCycloc ceases production, citing impact of Brexit on its business
Wall-mounted bicycle storage firm Cycloc is to cease production, with its founder citing the impact of Brexit as one of the principal reasons for the decision.
The company, which has been in business for 17 years, announced yesterday that it would stop manufacturing its award-winning products, which have proved popular among both individuals and businesses for storing bicycles, and would also close its UK warehouse.
In a statement, company founder Andrew Lang, who is also its principal designer, said: “This was an incredibly difficult decision to make, particularly as we have a development pipeline of new products, but it was personally important to me to wind operations down whilst the company is still solvent and without owing creditors.
“I’m having to press pause for now to take some time away and evaluate what form Cycloc might be able to take in the future.”
Providing further background to the decision in a video posted to YouTube and addressed to the company’s customers, partners, distributors and retailers, he said: “Over the past 15 years, I’ve had the pleasure of meeting and speaking directly with many of you about our shared passion of cycling.
“As most of you will be aware the last few years of trading have been extremely challenging for the cycling industry, something we have not been immune to. We have faced rising operation costs alongside negative impacts of COVID and increased barriers to selling in the EU as a result of Brexit, something that has been magnified by our wish to continue to manufacture in the UK.
“What you may not be aware of is that Cycloc is an entirely self-funded venture. Its growth has been organic. There are no external investors and our funding sources are finite. This means we now find ourselves with no choice but to cease manufacture and close our UK warehouse operations.
This was an incredibly difficult decision to make, particularly as we have a development pipeline of new products, but it's personally important to me to do this while we remain solvent and with no creditors.”
He added: “We will continue to sell through our existing website while stocks remain available, and I want to assure our customers that our support lines will remain operational.”
In an article published in the Guardian earlier this year, Cycloc revealed that the United Kingdom’s departure from the European Union, which prior to Brexit accounted for 50 per cent of its business, had cost it a quarter of its turnover.
> “It is very difficult to be positive”: Brexit lost Cycloc 25% of sales, founder reveals
He said it was “very difficult to be positive” about the situation, citing “Kafkaesque” rules introduced for trading with EU member states.
Underlining that the company remained committed to making its products in the UK, he said: “"It is very disappointing. I am a naturally optimistic person, but in a sense it is very difficult to be positive.
“One of the things that is quite disappointing about this whole process is that from the outset, we made an active decision to manufacture in the UK.
“We’ve remained faithful to that and it feels as though the UK government hasn’t necessarily helped us.”
“We have about half a dozen products in the pipeline that are in a very advanced stage but we've not been able to commit the capital to bring those to the market yet because of the other Brexit costs and problems we’ve been confronted with.”
The company’s head of operations, Clare Lowe, added that there was also an issue with some “EU distributors stopping placing orders, citing cost of shipping and customs clearance as prohibitive.”
The company opened a warehouse in the Netherlands in an attempt to reduce the administrative burden, with paperwork only needing to be completed for each truckload arriving from the UK, rather than for individual orders to EU customers dispatched directly.
Even then, the financial burden proved too onerous, and with Lowe saying that it was clear that sales to the EU were “not going to recover to their pre-Brexit levels,” the facility would have continued operating at a loss.
“To say the Brexit process was gritty is an understatement,” she explained. “Within 12 months of having got it up and running, we just had to take this decision to close it because it wasn't covering its costs,” she added.
Simon joined road.cc as news editor in 2009 and is now the site’s community editor, acting as a link between the team producing the content and our readers. A law and languages graduate, published translator and former retail analyst, he has reported on issues as diverse as cycling-related court cases, anti-doping investigations, the latest developments in the bike industry and the sport’s biggest races. Now back in London full-time after 15 years living in Oxford and Cambridge, he loves cycling along the Thames but misses having his former riding buddy, Elodie the miniature schnauzer, in the basket in front of him.
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41 comments
Brexit is an easy scapegoat. It would be interesting to know numbers around revenue and then split between EU and UK before and after Brexit
Kudos to him for closing the business without shafting creditors.
Don't believe Brexit is the reason. The real reason is it was overpriced when other cheaper brands are doing it better.
yeah the extra cost of trading in the EU which prior to Brexit constituted 50% of this business's sales has absolutely and categorically nothing to do with Brexit.
Sorry to see it go, of course, but as ever I'm not very convinced by "But Brexit ...".
When we have a major downturn in the industry and the impact of Covid, plus the impact of imitations, it makes me think of "but the bicyclist" whilst ignoring all the other factors I hear in online debates about the causes of collisions.
The fact that visually near identical copies of all their products are available on AliExpress for a fraction of the price probably didn't help.
This is the consequence of going to China for manufacturing: If they can see you do regular sales, it's not long until the factory next door is making the exact same product. And not long after that, factories all around the city (etc., till volume is supplied).
Read the article: “One of the things that is quite disappointing about this whole process is that from the outset, we made an active decision to manufacture in the UK."
Unfortunately the CCP is not a respector of Intellectual property so that they are very capable of taking a product and reverse engineering it so as to be able to copy it. Further their conditions for manufacturing include having the ability to see the design so that they are quickly able to copy just as soon as the design owner is no longer valuable to them. This aligns with their objective of manufacturing global dominance.
The only vote that you have with the CCP is Not to buy their products. Giving up your human rights, fair trade, international rule of law, and democracy is not a price worth paying for some apparently cheap product.
Ah, missed that! Was it 100% manufactured in UK, or was it like those cases where companies buy components from China, and then do final assembly in EU, slap on 51% markup and so can claim manufacturing was in Europe?
I'm really sorry to hear this. I've known Andy for years and remember when I first saw his prototype and he explained how it worked, which I thought was a really cool idea. I knew the business had been struggling because of Brexit. It's yet another example of how the lies of the right wing have managed to crush British business.
It's a small price to pay for all the tangible benefits…
I agree but suspect that the right have crushed more than just British business these last thirteen years. Still they can't crush hope...can they?
Ask the young people about how they view their future and whether they'll be able to buy a house on an average wage.
Sadly a very fair point
The long term failure of government of all hues to build social housing, and affordable housing have nothing to do with recent stupidity. It's structural long term stupidity aiming to prop up banks and builders. So that's the supply side.
On the demand side the failure to provide a rational system for economic migration aligned to our national interest is a clear failure of government. The old idea that we need more people to boost our industrial output is not very convincing given the automation that is usual in manufacturing.
Our service sector does need people but it's clear that industries like food retail (supermarkets) are very different post pandemic with deliver to home and click & collect meaning that actual shop staff are fewer and fewer. Come to our store and swipe the barcodes youself. Come to our store and we know what you took so your reciept is in e-mail...
The end of BoE Quantitative Easing (printing money) was bound to be big and the 15 consecutive hikes in base rate were bound to have an impact on the biggest financial commitment that people make. So a price slow but not crash is the best to be expected, and the effect of QE largely remains on making housing cost so many multiples of income that it seem far off to impossible.
The banks and finance markets are ok, so that's what really matters .... </s>
Personally, I'd blame Thatcher and her "right-to-buy" which led to a decrease in social housing and the inflation of house prices which has led to today's situation where future generations are priced out of the market (which is the opposite of her intention to create a property democracy)
https://www.theguardian.com/housing-network/2013/apr/17/margaret-thatcher-legacy-housing-crisis
https://www.theguardian.com/society/2015/aug/26/right-to-buy-margaret-thatcher-david-cameron-housing-crisis
This does highlight a major problem of privatisation - once assets are sold off cheaply, it's very expensive to gain back control of them, especially if the assets have been used to run up big debts (c.f. water companies)
And why would any council invest in building social housing if the tenants then have to right to buy it?
I read a study a few months ago which talked about how a large proportion of RTB formerly-social-rental property ends up simply becoming privately letted property instead.
Lies of the right wing eh. So the liberal left have never told any lies have they?
All politicians lie, it's in their DNA. It's easy to blame Brexit for everything, but the EU is tanking more than GB. Is that Brexits fault too?
Brexit delivered lose-lose outcomes so it is entirely consistent that it would contribute to poorer economic performance of EU as well as of UK.
Luckily for Boris and co, Covid and Ukraine have helpfully obscured the impacts for the UK somewhat ..
Oh give it up. The evidence is expressed by SMEs day in and day out. Brexitty is stupid, delivered by liars and voted for by, well, idiots. Anyone, with any sense of enquiry could see that by imposing sanctions to trade on yourself would not help business. Brexitty is the first time in history that a country voted to impose trade sanctions on itself. I mean, that's just effing genius.
At least you didn't call us racist idiots. 👍
Not all Brexit voters are racist, but from what I've seen all racists voted Brexit.
Typical remainer response. You can't accept anyone else's opinion so you resort to name calling and abuse.
Typical leaver response - avoiding the economic and political damage caused by Brexit and blaming everyone else...
Wrong. I voted remain, but I am adult enough to accept the decision and hope that it is successful. The problem is the government consists of remainers and nobody is behind it fully to make it a success. Plus, most remainers act like spoilt children and resort to insults and name calling because they didn't get their own way and want Brexit to fail so they can crow about it.
When you say "the government consists of remainers and nobody is behind it fully" do you mean that Liz Truss is out? Or Nigel Farage was never in? The current cabinet is full of them ... er ... David Cameron. Had a quick check in case and pretty sure everyone else voted leave [ministers] [MP voting]!
Presumably you mean the civil service? They could certainly act as a drag on process or advise caution but at the end of the day they'll be doing what has been legislated for. But could it be the legislation / agreements were ropey due to ... political reasons?
I could just have said "Boris Johnson" though, would have been shorter.
Seems to me like it's the other way around. Brexit proponents are unable to publicly admit that it was a stupid idea and the implementation was obviously going to be difficult and problematic. Brexit was described as an oven-ready deal and that was a lie. Blaming some nebulous collection of remainers for sabotaging the scheme is risible - the issue is far more that there were significant problems with the implementation (e.g. the N.I. border).
Ultimately, Brexit was a bait-and-switch so that voters would believe that there would be complete control of immigration and that other countries would be falling over themselves to secure trade deals with us. Now however, the truth is becoming apparent that it was a method to reduce human rights and increase pollution (e.g. rivers), whilst also letting a tiny minority increase their huge profits - they don't care about the impact to the rest of us.
I don't believe that everyone who voted Remain is acting like a spoilt child - most of us would be happy to see some tangible benefits from the whole Brexit fiasco and would be prepared to say "you know what, maybe it was a good idea but certainly not because of the reasons given before the vote". However, we are yet to see any benefits that I know of - let me know if you find any.
The problem is that BrExit intrinsically was going to make a lot of people lose out. When your economy has been in a closely integrated free trade area with a bunch of other economies, it is just inevitable that *many* businesses will have business models that are (by intent or just organically) dependent on customers and/or supply lines within that free trade area.
Cutting your economy out of that FTA will _unavoidably_ disrupt those businesses. And many of them will be _unable_ to find replacement suppliers and/or customers quickly enough to remain viable.
So BrExit proponents may think there are benefits (ironically, by being able to enter into other FTAs, even though the EU is pretty open with FTAs - and it was often the UK who objected to new FTAs, such as the India deal) and can speculate that - one day - some in the UK might benefit from some FTA that they might not otherwise have had. However, that doesn't change the _certainty_ (predictable before, and evident after BrExit) that there will be many businesses who are disrupted and lose out - sometimes badly enough that it shuts them down.
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