05 Mar 2019

Tyre fitting firm looks to China to beat Brexit uncertainty

Phil Mullis profile image

Phil Mullis, Partner

Phil joined the firm in 2008, became a Partner in 2012 and heads up the Retail and Wholesale sector team for Wilkins Kennedy.

March 5, 2019

 

An independent group of Midlands-fast fit centres is taking Brexit-related uncertainty into its own hands by ordering more stock from outside the EU.

Buxton-based Selecta Tyre, which has 16 centres in and around the Midlands, fits tyres to vehicles alongside offering MOTs, servicing and other vehicle repairs and improvements.

When its stock needed replenishing, the firm tended to order tyres from manufacturers and wholesalers in the UK as required.  These suppliers often import tyres into the UK from EU factories.

Nevertheless, with uncertain times surrounding Brexit, Selecta Tyre, who receive financial advice from leading accountancy firm Wilkins Kennedy, has decided to order some of its stock from China - and has built a mezzanine floor in its Ashbourne garage to house the extra stock.

Finance director at Selecta Tyre, David Rees, said the lack of clarity surrounding Brexit meant the company had to change its strategy.

He said: “Around September last year, we started to think about what might happen with Brexit and what we could do to mitigate the risks to our business.

“We realised there wasn’t a lot we could do other than buying stock from further afield. Our stock doesn’t degrade, so keeping it for longer was an option.

“We retail only in the UK, so we don’t have to consider supplying customers in the EU, which makes things easier for us compared to other companies.

“We are trying to be proactive as much as we can, should there be an economic shock suffered in the UK as a result of Brexit. If a deal is reached this exercise might prove to be unnecessary, but at least we will have done all we can to protect our business.”

When Selecta Tyre orders stock, the tyres are shipped from China in containers to a holding company. Orders can take three months to arrive.

Each container holds between 900 and 1,200 tyres depending on their size, and can cost between £25,000 and £45,000 depending on what is being ordered.

David added, “Getting stock in from China was a good move for us because the price is not a whole lot different and allows our business to remain competitive.

 “It certainly made the decision to change our strategy a lot easier than it might have been.”

And Phil Mullis, partner and head of retail and wholesale at Wilkins Kennedy, said Selecta Tyre’s actions were a great example of a small business being proactive and not waiting for the government to make a decision on Brexit.

He said: “This is a very difficult time for smaller, independent businesses. But it’s great to see Selecta Tyre taking positive action to try and make the best out of Brexit.

“We trust they continue to thrive once the UK leaves the EU and Wilkins Kennedy will be there to help them along their business journey.”

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