Livingston-based e-commerce hosiery brand to open new warehouse in The Netherlands to help offset uncertainty and potentially costly implications of no-deal Brexit
SNAG Tights, a Scottish-based e-commerce business, has announced the opening of a new warehouse facility in the Netherlands to protect the company and its customers from the uncertainty and potentially costly implications of a no-deal Brexit.
From January 1, 2021, the UK will leave the EU’s Single Market and Customs Union to implement an independent trade policy, bringing major changes to trading arrangements between Britain and the continent.
However, with little clarity on how these new trading arrangements will impact UK e-commerce retailers, Snag has taken the decision to expand to The Netherlands to safeguard the future of the business and offset the potential jeopardy of stringent customs regulations and the introduction of costly tariffs.
The online hosiery brand currently manufactures its full product range in Italy, before shipping to the UK where orders are fulfilled and then exported globally from its Livingston headquarters. However, with its new Dutch warehouse set to be operational by December 2020, all future stock would be shipped from Italy to be finished and packaged in the Netherlands.
The company currently fulfils around 21,000 orders a week, split equally from the UK, EU, and the rest of the world
Brie Read, CEO, Snag Tights, said: “A no-deal Brexit presents two major risks for us. The first being the introduction of costly tariffs to import goods to the UK and the second meaning tighter customs regulations between the EU and UK. Both of which would be detrimental to the future success of our business.
“With one third of current sales coming from within the EU, it would no longer make sense to import our products from Italy to the UK, to then export them back to the EU.
“As a result, all future orders for the EU and potentially other countries in which the EU has a favourable trade deal with, would be fulfilled from the Netherlands. Packaged stock would then be shipped to Livingston to fulfil orders for the UK and the rest of the world, where the customs and shipping terms were preferable from the UK.”
Snag, which was created with one clear mission in mind – to ensure anyone who wants to wear tights has access to hosiery that genuinely fit in comfort, regardless of size, shape, age or gender, recently announced an annual turnover of £24 million.
The brand, which has surged in popularity both at home and overseas since its launch in 2018, currently employs more than 70 members of staff, including 35 at its base in Livingston.
The relationships Snag has cemented with its customers combined with the operational resilience it has demonstrated while navigating the global COVID-19 pandemic, has enabled the business to grow at an exponential rate over the last two and a half years.
However, with the EU and UK struggling to negotiate an agreement on how their future relationship will look and the extent of Brexit’s impact on UK-based e-commerce businesses still largely unknow, Snag has been forced to consider a future growth outside of Scotland, taking proactive steps to ensure it can continue trading in key markets across the globe.
Read added: “In the event that freeports were introduced across the UK, or the EU and the UK agreed a free trade deal, it wouldn’t be necessary to move our create another base in The Netherlands. However, given the time it takes to set up a warehouse, we couldn’t put our plans on hold for any longer and risk facing a no-deal situation come the end of December.
“With a commitment to being part of the future growth and economic development of Scotland, more clarity from the government on Brexit at an earlier stage would have enabled Snag to maintain its Scottish roots and continue investing in the country as well as expanding its Livingston workforce.”
Snag recently met with MP Hannah Bardell to discuss the impacts of COVID-19 as well as the uncertainty around Brexit in relation to the introduction of freeports, new customs regulations and tariffs.
Following the virtual meeting, the Livingston MP said she would write to the UK Government’s Business and Trade Ministers to raise the concerns Snag had and to ask for further clarity around the potential introduction of freeports across the UK.