Having just come back from China, where we’re involved in a joint venture with a manufacturer to produce suits for our retail and supply business, it’s clear that the current exchange rate situation means only one thing.
Prices for goods in the UK will go up and any price hike is going to have to be passed on to the end customer.
Much like the consumer, we are having to face the fact that the escalation of the global financial crisis over the last couple of months is going to affect us and that we shall have to do the best we can to cope with that fallout.
Eight years ago we started manufacturing suits in Hungary and bought into four factories. Two years ago we closed one and last month another closed. This week we will start to close a third. If the exchange rate situation doesn’t change soon I foresee that we may have only 12 months left in Hungary. It grieves me because the cost implications for the business are considerable, as are the human costs – we employ 23% of the workforce in the town our factory is in.
At times like these, it’s like a battle. You feel like you’re driving a tank – with your head over the little parapet, assessing the risks and the opportunities every inch of the way.
I know there are many other retail and manufacturing businesses out there right now that will be experiencing the same things.
So why do I feel like one of the more fortunate guys in this particular battle? Maybe it’s because I have a team around me that are passionate about our business. In times like these, passion and commitment really count. We care and our customers know it and that is what will get us through this downturn.
Simon Berwin is managing director of suit supply business Berwin & Berwin