LONDON — Brexit, the British departure from the European Union will no doubt have some impact on the UK decorative fabrics business, textile executives indicate in the wake of this historical event. However, nobody surveyed by Fabrics & Furnishings International is too sure how these changes will take shape. “My personal view is that it is too early to predict the final outcome,” says Jonathan Mould, Chairman of Romo, the large Nottingham based wholesaler, “but I think once the dust settles, and the new political landscape becomes clearer, and the politicians calm their posturing down, compromises will be made and there will be an orderly transition, resulting in a new order that is quite probably different to anything we might imagine at this point in time,” he adds. Great Britain was the second largest economy in the EU after Germany. As a result of Brexit, Standard & Poor’s immediately dropped the credit rating of England to AA status from AAA.  With the drop in the value of the British Pound, imports will become more expensive. UK converters and wholesalers may have to increase prices as a result. They have not been paying duty as members of the EU but with this new action, there may be new duties to pay. “We have experienced the first shock waves in terms of currency volatility, and whilst the pound is down, it is not down and out and already recovering,” Mould says. “As a private business the stock market has no direct effect on Romo but a week after the event the FTSE closed above pre referendum levels; a clear indication that the markets are maybe not quite as worried as the media make out,” Mould said in a letter to his employees about Brexit in late June. Romo sales within the first week of the announcement “continued strongly, and sales for June were over 12% up on last year,” he says. “However to be realistic it will be some weeks or even months before we can really gauge the effect of leaving the EU.” “I have no real concerns in the short term as the UK will continue as a member of the EU for at least the next two years.   During this time the UK will negotiate new trading terms with the EU and the rest of the world. I have no idea how these negotiations will pan out, but I do not envisage they will result in any significant damage to Romo’s international trade prospects. There is no point speculating about possible changes, we will just have to be patient and once we know the new rules of the game, react quickly and efficiently.  At some point in the future there may be new procedures and documentation, but with our own in-house IT department we are well placed to adapt our systems. We will look to find the edge on our competitors, but our main thrust will continue to be the development of the products, marketing and service we offer.” Mould says Romo is as committed to Europe as it ever was. “The majority of our purchases are from the EU and 30% of Romo sales are to the EU. I firmly believe the markets of the member states of the EU remain a huge opportunity for future growth.” Romo has offices and employees in Holland, Germany and Sweden and an agency sales network throughout the rest of Europe. “We will redouble our efforts to develop our product and service to ensure that our European staff can look forward with confidence to a bright and secure future with Romo. The same also goes for our European agents with whom we have worked for many years and to whom we continue to be totally loyal and committed too. It also goes without saying that the company remains committed to the thousands of Romo customers in Europe. We are very grateful for their custom and support and will do everything possible to build on those relationships in the future,” he adds. “Romo remains pro-European in terms of our UK employees with European nationalities. They provide an invaluable service and contribution to the Romo cause. Whilst this must be an unsettling time, I am confident that each and every one of them will have a secure future with Romo and that they should not worry about their employment security or their ability to remain within the UK.” “There may be market turbulence in the weeks and months ahead, but Romo is well placed in this regard.  The company has no borrowings and our sales in Sterling, Euros and U.S. Dollars are almost evenly split. This gives a balanced position with a natural hedge against currency volatility. Romo has incredibly high stocks and whatever happens to the pound I do not envisage adjusting any prices in the short term. In the longer term, markets will settle down, we remain in a low inflation economy and I expect this to remain the case,” he wrote. “Romo remains confident in its future and will continue with its thrust to develop and grow. We are advancing our project to build a new state of the art HQ, including a highly automated warehouse system.  “Following extensive studies, our architects are currently developing the design and we are aiming to relocate and be operational by the summer of 2018. This will be a massive investment for the company, something in the region of £25 million pounds.” “Although we at Ashley Wilde find ourselves in a new and difficult position with the uncertainty surrounding Brexit, we are looking at this as an interesting opportunity to increase export sales, says Ashley Brodin, Chairman. “The weaker pound makes manufacturers in the UK more competitive to export to the USA,” he reasons. Brodin says The Ashley Wilde Group has expanded dramatically in the past ten years, particularly with business in the USA and he plans to produce a host of new collections for both September and January, coupled with Ashley Widle’s expansion into the branded bedding business, with international brands such as Karl Lagerfeld, Orla Kiely, Ted Baker and Kylie Minogue. “It is a matter of the glass being half full, rather than half empty.” “My initial concern was the steep fall in the value of the pound which would affect the cost of imports forcing us to increase some prices if there isn’t a recovery in the near future, thinking if there was more turmoil with the euro nations the pound may strengthen against the euro,” says Michael Joseph, Sales Director, MJA Fairfield Mills Inc., the Oldham, UK print converter. “It will help UK converters who export as the pound has fallen against all major currencies. In the near future, people will be anxious in booking new ranges in US dollars as they may be concerned about launching ranges at increased prices.” “The worry in the long term is that (English) house prices will fall and the housing market will slow down because of the uncertainty of the job market which will have a detrimental effect on the furnishings spend. The worry of pensions being worth less may affect the ‘silver surfers’ disposable income which again isn’t good for the housing market and ultimately textile sales.” “The weak pound will help the tourist industry so the contract market for the hotel industry should be buoyant,” Joseph feels. “The only certain thing is that there is going to be a lot of uncertainty.” Trevor Helliwell, President of Prestigious, a major converter and importer in Lancashire had “no comment” at this time. Also, Peter Osborne, Chairman of Osborne & Little and David Green, Chairman of Colefax & Fowler, two top English editeur brands, could not be reached for comment about Brexit. Many textile executives are still overwhelmed by what has occurred and preferred to hold back their comments until things settle down.