Blog: How Brexit is costing this retailer £1m a month in sales – Business Live

An online retailer whose revenues have been on an upward trajectory has become the latest business to highlight the vast financial impact of Brexit on the UK.

Leicester entrepreneur Ravi Karia launched an e-commerce business in 2010 selling sells socks, thermal underwear, hats, gloves and bedding to shoppers all over the world.

Five years ago he adapted it into a tech company offering a seamless link between suppliers and big online shops such as B&Q, Debenhams.com, La Redoute, Amazon and Decathlon.

The big retailers integrate his software into their own systems and his business, called Pertemba, acts as the middle man – without shoppers ever knowing the difference.

Lines sold include Trespass, Regatta, Mountain Warehouse, Hype and Clarkes and he also deals with licence-holders for brands such as Fortnite and Minecraft.

Mr Karia said sales are currently around £22 million and rising, but he said Brexit trade barriers are costing him up to £1 million a month in lost EU business. Despite that he is still working hard to grow EU sales.

He said: “Brexit has affected us. My business would have sales of £35 million right now if it were not for Brexit.

“If an EU company wants a non-EU company to ship into the EU there needs to be so much compliance. When you start talking to a new EU supplier they just say they don’t want it all.

“There’s at least £10 million of business in Europe that we can’t access because my stock is in the UK.

“So we’ve got a third party warehouse in Belgium – which has been a difficult experience and is not perfect. We’ve also had to persuade suppliers to move stock to Europe. It’s been painful.

“I didn’t vote for Brexit. I knew it would be difficult for my business but it’s happened now.

“Ironically the silver lining is there aren’t now competitors trying to do what we’re doing from the UK. But it would have been much better for us to be able to launch products directly from here to Germany or France.

“The alternative to having people overseas is you do not grow.”

His comments come amid growing criticism of the impact of Brexit on Britain, with Chancellor Jeremy Hunt now conceding Boris Johnson’s Brexit deal caused damaging trade barriers with the European Union.

Last week, the Institute for Fiscal Studies said “very clearly Brexit was an economic own goal” that had harmed growth.

The economic think tank’s director Paul Johnson said it has been “very bad news indeed and continues to be bad news, particularly the way that we’ve done it, the hard type of Brexit we’ve had, distancing ourselves from the single market”.

While the OBR said the UK’s “trade intensity” would be 15 per cent lower in the long run than if the UK had remained in the EU.

Mr Karia – who is now considering buying a company in Europe to try and even out the issues – started his firm as an online shop called Universal Textiles before moving to the technology side of things. He now has 70 people in the UK and 50 in India on the tech, data entry and customer service side of things.

There are about 60 or so suppliers on the Pertemba system selling through around 100 marketplaces worldwide without breaking a sweat, and all the stock comes through the Leicester warehouse. A US partnership is also being launched.

Petremba supplies Hype clothes among others

One of the beauties of the tech he provides is it can allow clients to move into new marketplaces without having to adapt their own websites or technology.

He said: “We started as an online retailer but I was thinking “how do I grow the business?”.

“I needed bigger premises, more money, more people, but got thinking that what I’m really good at is technology – that’s my strength and I realised I needed to use technology to overcome the barriers we were facing.

“I thought if I don’t have to invest in stock myself that solves all the problems. So I built the systems and the developers took it on. Now we have a defined brand and strategy and more people are coming on board.”

Like many online retail businesses Petremba thrived when people were stuck indoors during lockdown.

He said: “The company was always growing. We were around £18 million in turnover, and trying to get to over £20 million, but when Covid hit it shot up to £27 million in a year because we were able to stay open when other shops were shut.

“On top of that our competitors were quite slow to the game while we were able to adapt quickly, bounce-back and fulfil orders.

“We’ve been doing phenomenal numbers outside the UK.

“It’s amazing how the business has transformed. We have streamlined everything so we can take on a supplier in a week and a new marketplace within a week as opposed to months and months.

“Things are not as busy as during Covid, but we are still trading at £22 million, and in the next three years want to get to £26 million then get to £35 million.”

Pertemba is still owned by Mr Karia and his father, and has grown without outside investment. There has been interest from potential buyers over the years, he said, though he isn’t prepared to hazard how much the company might be worth.

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