This is a two-part series that discusses Brexit and its impact on UK, EU, and North American Trade.
It’s an interconnected world when it comes to trade and supply chains. For much of the American uniform industry the focus has traditionally been on NAFTA, CAFTA, USMCA, and China. But what about Brexit? How does the withdrawal of the United Kingdom from the European Union affect its neighbors across the pond?
To find out, The Pulse reached out to Simon Hunter, of Hunter Apparel Solutions Limited. Simon is the third generation CEO of his family business, a technology-led managed service provider of professional clothing. Simon has received numerous accolades, being named PCIAW’s Best Business Manager, and Viscount Awards Innovator of the Year. He’s even been cited by Queen Elizabeth, winning a service to business and the economy medal in 2020.
Since the Coronavirus outbreak, Simon has paused the corporate clothing side of his business to become a seven-day-per-week operation to maximize the production of PPE products and scrubs, and was selected by the UK government to supply head-to-toe disposable PPE to front line workers at scale.
The following are edited excerpts from the conversation.
The United Kingdom is the 7th largest exporter to the U.S. and 5th largest importer of U.S. goods and services. In addition, the UK is the largest investor in the U.S. via foreign direct investment activity. Brexit and the conclusion of a new UK-EU trade agreement are significant components for a potential U.S.-UK free trade agreement. What is the outlook and time frame to strike a free trade agreement? How about Canada?
My outlook is always sunny; I am an optimist. In January, we have already seen MSA spend $60 million buying a UK company, so that is a buoyant start to 2021 even without a free trade deal; clearly US companies see value in the UK for the longer term.
In 2020 Canada’s Medicom made a huge investment in a UK production site for respirators and masks clearly in the belief that there will be a large-scale opportunity for domestic production in the UK, again showing belief in the long term returns to be had in the U.K. market.
Opportunity exists because we are still starting from a relatively low base in this sector for trade in both directions. The data outlined in the question sounds impressive, but I suspect the revenue/investment skew is in tech, financial, and pharma, and not apparel. The timing is far from certain despite some positive noises on both sides.
Do you think there will be an impact on UK businesses trading with U.S. businesses, or vice versa, in the uniform/professional clothing industry, for post-Brexit UK?
I don’t think there are too many UK companies in this sector that export to the USA. We often use the “iceberg” analogy to describe the sector. There are the “above the water line” companies that focus on military, fire and PPE. Then there are hundreds of smaller businesses that are the bulk of the sector. I don’t have the information or the impression that many of them are exporters to any significant degree.
I don’t really think in general that UK companies understand the US market and most are likely very intimidated by the sheer scale of it. So I think there is from a relatively embryonic position plenty of scope for the more specialist companies. Moreover, we don’t have a market here with much U.S. uniform or PPE product on sale. Of course, there are huge U.S. players like MSA, or Gore that sell here, but we don’t really have a great deal of US product from the small and medium sized players at this point. I hope that will change.
What growth opportunities do you see for Hunter Apparel Solutions Limited in 2021 and beyond in the U.S. and Canada because of Brexit?
Right now we are targeting more Common Wealth export, and are focused on Canada and Australia as opposed to the U.S. We are certainly trying to educate ourselves about the U.S., and if a U.S. strategic partnership came along we would pursue it. When the hoped-for free trade deals do settle between these countries it will stimulate trade in both directions in a manner not seen before in my 25 years in the sector so that’s really exciting.
How competitive will the environment be once the UK signs individual trade agreements with the U.S. and Canada?
I have said the UK Government is so far “playing a blinder” trying to help medium sized companies export more. There is so much help available. Some capable civil servants energized to some degree by Brexit and really wanting to help people like me break new ground. In Northern Ireland, we also have “Invest NI” ( INI) a local government body who assist with grant aid for exporters and of course to encourage Foreign Direct Investment. I am impressed with the help we have already received from a variety of these public bodies in 2021 to facilitate us on our export journey. A major part of this assistance is either free or assisted market research in these sectors.
In the UK the most specialist industry analyst is called “Plimsoll Analysis” they have a different approach to other providers who typically only provide data looking backwards at historical financial accounts. Plimsoll track patterns that allow them to forecast the most likely financial future for companies. They study the underlining trends that mark financial health but are not always so apparent. I have just started to talk to them about acquisition profiling, so this a tried and tested data source for me that I would recommend to anyone especially clients who want to understand how likely a contractor is to be in the future before they place a contract with them. I strongly recommend them to US or Canadian companies who want to understand the UK market.
Any final thoughts?
On a personal level I hit the big 50 in 2020, so I feel that I am in the right place to take on these challenges. I think that at this stage in a career you have the right balance between energy and experience to make some more ambitious strides into the “big bad world”. It’s natural to want to export to countries that have a shared language as it just removes a huge barrier to making business work. I like the buoyant vibe of many North Americans, the optimism, ambition and can-do attitude and I feel at home with that, so I am excited to see what we do in the next 5 year plan.
Hunter is in Derry-Londonderry, Northern Ireland, a small part of the UK which uniquely borders with the EU because of its border with the Republic of Ireland. Hunter has been in operation since 1936 with its origins as a tailoring company, and now specializes in “Tech for Good” solutions. Today, Hunter is a multi-award-winning company providing valued added service software technology for use with its in house designed bespoke technical apparel and PPE. Learn more at https://www.hunterapparelsolutions.com/