European suppliers assess impact of Brexit

The heads of some of Europe’s leading kitchen brands have given their views on the potential impact of the UK’s decision to leave the EU.

Speaking exclusively to kbbreview at Küchenmeile 2016, Thomas Klee (pictured), managing director of German furniture supplier Rational, admitted his initial reaction to the vote was “shock and dismay”, but said both sides were “heavily dependent on each other and, no matter what happens, there will always be a sensible way forward for business.

“The UK still is, and will remain, a very interesting market for a lot of German kitchen manufacturers.”

Klee added that Rational saw “a bit of a standstill and lower order intake” following the decision. But he said retailers were now reporting increased footfall and that “consumer scepticism is getting back to normal levels and there will be no general price increase in 2017.”

Christoph Fughe, managing partner of kitchen brand Störmer, claimed “nobody is expecting a decrease in business once Article 50 is triggered” and that he expects “a normal situation for us in the future”.

He also ruled out any immediate price increase, saying most people in Germany expected the UK to sign a trade agreement “similar to those with other non-EU countries like Norway and Switzerland”.

“I was surprised but it’s a lack of communication,” Fughe explained. “People don’t understand the politicians. Nobody wants to lose the UK, but what is the EU? In this moment, it is just a group of people who are not heading in the same direction. So, maybe Brexit is good for the EU? It shows what can happen and we don’t want to lose the others so they have to stick together.

“For us, it’s not a problem. If you do €200 million turnover you will be affected, but for us it’s an opportunity because everyone in the market will suffer now.”

Pronorm managing director Heinz Hachmeister took a more cautious view, saying surveys among consumers about their buying attitude and economic outlook are showing “the first signs of more pessimism”.

“I think it’s important that everyone keeps a cool head and a close eye on market developments, so that appropriate action can be taken when it’s timely,” he said. “The Brexit decision was unexpected, but so far it has had no impact on us or our dealers. It’s only natural that uncertainty can lead to a slowdown in demand. It is also true there will be increased price-sensitivity for imported kitchens, but I am confident that we will successfully manage our ongoing business with the UK, because it’s a very important export market for us. It’s been growing with double-digit figures in recent years. For German kitchen manufacturers overall, I believe the UK is the sixth most important export market in the world. It would therefore be anticipated that the UK will continue to trade in some way with the European Union. But I think that light barriers to trade are to be expected.”

Mauro Capozzo, chief executive of flooring and decorative surfaces specialist Swiss Krono, admitted there was “genuine reason to be slightly concerned about how the EU and other foreign countries view future mid- and long-term trading with the UK”, referring to the effect on the French-speaking part of Canada’s economy when it looked as if it might vote to go independent.

“Just the threat stopped many US and other foreign businesses investing in this region,” he said. “Their economy has never fully recovered. Falling revenue led to raising taxes, and it’s a circle that they’ve never managed to break.

“However, the UK has, of course, a very large and robust economy, and with its buying and spending power, potentially has all the tools to keep other counties interested in trading and investing in the UK.

“My biggest fear for the UK,” Capozzo concluded, “is that the EU will want to make an example of what happens if other member states try to leave, and make the negotiations as complicated and difficult as possible. This will extend the period of uncertainty, which could be very damaging to the overall economy in both Europe and the UK.”

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