Christian Käsemann, managing director of German kitchen supplier Ballerina, has revealed the damaging potential impact of a no-deal Brexit for UK retailers and admitted the company has begun losing orders to rival British furniture brands.
However, speaking exclusively to kbbreview at Living Kitchen in Cologne, Käsemann (pictured) insisted he remained “very positive” about the brand’s future in the UK.
Asked how bad the Brexit situation could get, and what plans Ballerina had made to limit any potential impact, Käsemann admitted the company would “probably have to think about importer distribution”.
“By that, I mean we’d have to minimise risk,” he explained. “It’s just an idea at the moment. But if the situation gets worse, we would have to think about it, because it’s hard to get retailers insured at the moment. In the worst-case scenario of a Brexit without agreement, you’ll probably see nobody insured anymore. The insurance companies only work inside the EU.
“If you can no longer get British retailers insured, they’ll automatically go pro-forma, which means prepayment. Not many are really keen on doing that. They’re used to working with the terms they have and it’ll be a big problem if we have to change that.
“Cash flow will be the issue for any retailer working with German or European suppliers,” he continued. “Going pro-forma is very dangerous for cash flow. If you don’t have enough cash flow, it affects your business. With this scenario, the UK economy will also go down.”
Käsemann admitted British kitchen manufacturers were now exploiting the Brexit situation to their advantage and attempting to lure retailers away from European brands.
“I know we’ve lost some orders to British manufacturers because of the difference in delivery times and the uncertainty of Brexit”
Christian Käsemann, MD, Ballerina
“I know we’ve lost some orders to British manufacturers,” he said. “First of all because of the difference in delivery times and secondly the uncertainty of Brexit. It’s marginal, but we have lost orders.”
Käsemann said the market was now desperate for “a quick solution allowing businesses to adjust their strategy. Maybe they’ll use Article 50 and extend the period and go back to a second referendum?”
News that PM Theresa May’s Brexit deal had been voted out was “disappointing from a European standpoint”, he agreed. However, he claimed that although the current situation was challenging, “the year started reasonably well”.
“The people I’ve spoken to over the past two days are very positive that we can continue trading in the UK. We wouldn’t have such positivity if they weren’t optimistic about the future.”
His message to retailers, he said, was that it had become “even more important to concentrate your business”.
“In tough times, don’t try to sell everything. Focus on two furniture brands, two appliance brands. You can only sell what you know best using suppliers who support you.”