What impact will Brexit have on the cycles market?
Posted on in Business News , Cycles News , Political News
The referendum on the future of the United Kingdom's status in Europe has concluded, resulting in a decision to leave the European Union.
The overall vote was 51.9% in favour of leaving, compared with 48.1% in favour of remaining.
The British Retail Consortium (BRC) has urged the Government to move quickly to explain the process and how this will affect retailers and small businesses.
Without clarity, BRC says, the retail sector will suffer from a prolonged period of uncertainty. The organisation also said that retailers should be prepared for the possibility of significant swings, particularly in the exchange rate and consumer confidence.
The vote to leave brings a 43-year association to its end. The most difficult part now will be agreeing a new trading relationship, establishing what tariffs and other barriers to entry are permitted, and agreeing on obligations such as free movement. Such a process, EU leaders claim, could take another five years.
In the short term, markets are going to react in a big way. The Brexit has no historic precedent. No precedent means volatility in markets, probably on a global scale.
But how is the decision to leave the EU impacting on the cycle's market?
Some of the bigger businesses in the trade have already lost significant value from their share prices, which could be a silver lining for the IBD.
As reported in CyclingIndustry.news , retail giant Halfords has lost just shy of a £1 on its share value, dropping from 403.60 pre referendum to 310.30 per share as trading began this morning. Having ended 2015 at around 330 per share, the post Brexit drop will come as a big blow to the business, which had been steadily improving, hitting a high of 449 in May.
With Halfords estimated to possess between 20 to 25% of the UK cycling market share, Brexit's effects may put a halt on the firm's investments at a time where it is clearly building for the future.
UK cycling businesses have thus far largely hinted that price increases are a likely consequence if the pound's value continues to fall. To read more trade opinions on potential knock on effects, click here.
Prior to the vote, two thirds of the industry said they would be voting to leave the EU, in a poll conducted by ActSmart.