ThinkBusiness travelled to Donegal to speak to Claire McDonough, co-owner of La Maison, who says Donegal business owners are survivors and won’t be broken by Brexit.

What is your background?

Myself and my business partner Anne Blake started the company in 2005 following two years of research. We were both working for Donegal County Council at the time and the idea was born to have a high-end quality gifted home store after being invited to lots of weddings. We visited 52 shops all over Ireland and heavily researched everything and La Maison was the result of all our analysis. After opening, everything was going great when all of a sudden the recession hit and with that we decided that we needed to spread our offering so we retrained as interior designers. We’re now a team of six and have grown our interior design service to the point where the retail aspect is only 10% of our turnover.

How difficult was it to stay afloat during the recession?

It was extremely difficult. We didn’t have a lot of staff at the time and we had to cut our costs as much as possible. We upped our engagement with customers and held a lot more events to grow our reputation but there were many times when we didn’t even take a salary for ourselves, but that’s what was required.

Brexit impact

Brexit is going to be a massive challenge. I’ve spoken to other people in our sector and also in the county and there is a lot of panic around. But I’m looking at it a little differently. I really love what I do and I’ve worked too hard to build the business so I refuse to be defeated by Brexit. To combat this, we are currently working on new projects with one being Wild Atlantic Interiors. The one thing Brexit cannot take away is the beauty of County Donegal and because Failte Ireland put so much into creating the Wild Atlantic Way, we’re creating our own range off the back of that, beginning with cushions based on locations in the area. We also have a nursery range with lovely Donegal hares and bunnies.

Do you sell into the UK?

Not so much because a lot of our products are bought by homeowners in Donegal or possibly tourists visiting the area. But in saying that, the supply chain is a concern because of where I get my materials. Around 90% of my suppliers come through the UK so that’s going to create a challenge for the business. I’ve spoken to our reps asking about their Brexit plans and at the moment they don’t have any so that is a concern.

Are you developing new markets?

Yes, I’m definitely open to moving into new markets and trying to help grow the business. In a way, that’s why I am testing the Wild Atlantic Interiors. We have done holiday homes via Skype for people in the United States who have holiday homes here. If I can source their fabrics from the US and bring them over and do it in a way that is financially viable for both them and us, then I am happy to do that.

The strength of Donegal

I think we (Donegal business owners) have developed the skills for survival, that’s for sure. For us companies up here, if we survived the last recession, we’ll be able to get through Brexit. It just takes coming up with a creative way to combat the challenges that Brexit brings. The most important thing in business is to know your customer’s needs and that’s our focus.

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We asked food producers in Donegal if they are worried about Brexit. Their answers are both surprising and encouraging.

The growing strength of the food sector in Donegal was demonstrated clearly when almost 120 food producers, chefs and buyers attended a packed-out event hosted by the Donegal Food Coast – Donegal’s Good Food Initiative.

Local producers, Hugh Wilhare of Mulroy Bay Mussels and Lee Gildea of Gildea’s Butchers also joined a panel for a discussion on how food producers and buyers could make the most of growing opportunities, particularly with Brexit looming.

Eve-Anne McCarron from the Local Enterprise Office (LEO) in Donegal said the purpose of the event was to encourage producers to create more jobs for the local economy in Donegal.

“This came around after producers and restaurants approached us saying ‘we want opportunities to speak to one another and find out what business we can do together’, so we decided to run with it. The big challenge facing producers here is scaling their business and finding the route to the market,” she said.

The benefits of Brexit

The food industry in Ireland is expected to be massively impacted by the UK’s decision to leave the EU, but Donegal’s LEO believes that opportunities will come off the back of Brexit.

“Brexit is bringing good business practise if nothing else. We know that more change is likely to come and no one knows what’s going to happen. We’re telling people to be aware of where their business is at, and that’s just good business practice anyway. Understand your suppliers and understand your risk areas and then deal with the rest.

“To me, Brexit gives businesses a chance to stop for a moment and really consider where the business is going and then pursuing that,” she added.

‘Brexit made us look around’

Derek Walker, who set up Natnoot – the natural nutrition company which produces certified organic wheatgrass and healthy juices, says Brexit has already had a positive impact on his business. “We worked with suppliers in England but we decided to pull back and source more local suppliers which turned out to be a success for the company. Brexit made us look around and we found Irish suppliers fulfilling our needs at a better price.”

Andrew McElhinney from O’Donnell’s bakery, which has been exporting products into Northern Ireland for a number of years, is excited by the opportunities that may arise from Brexit. “I don’t see Brexit as a threat. I think it will be a positive for me. I’m seeing a lot of businesses looking to run away from it, but we’ve decided to run right for it.”

Exporting further afield is easy

Hugh Wilhare, who started Mulroy Bay Mussels over thirty years ago when the mussel industry was in its infancy in Ireland, changed the company’s exporting strategy after finding tough competition when exporting into the European markets. Just last year, the company began exporting into the Asian market which Wilhare says was the company’s “big break”.

With Brexit fast approaching, Wilhare said other exporters should consider markets further afield and that it’s not difficult as people think. “Initially, I wasn’t sure because I thought it was going to be really difficult for me but it really wasn’t. My biggest problem is getting product from Donegal to Dublin – getting it to Asia is the easy part. It’s definitely something other businesses should look to do now that exporting to the UK is going to become a problem.”

The vision of the Donegal Food Strategy is for the entire community to work together to make Donegal famous for its food production. Having talked to so many food producers it is clear that they are not fazed by Brexit and are instead embracing the uncertainty as an opportunity to look for bigger markets and better ways of doing business.

By Stephen Larkin.

Bank of Ireland’s Jennifer Howett, Pierce Butler and Lee Evans sat down to discuss the latest Brexit developments.

Bank of Ireland shared an update on Brexit at its Grand Canal Square branch, with global markets senior dealer Jennifer Howett joining head of sectors Pierce Butler and head of FX trading and strategy Lee Evans.

With so much uncertainly around Brexit, Butler and Evans gave a timely update on the biggest challenges facing businesses at the moment and answered some of the frequent questions they are faced with in their respective roles.

The discussion started with a brief update by Evans on the most recent developments. “On the 15th of January, we had the vote on Theresa May’s withdrawal agreement which was defeated by a historic margin. In terms of the market reaction following that defeat, Sterling was 2% higher in the days after the vote which may be counterintuitive to many; the pound’s value is currently linked to the pricing and probabilities of a no deal scenario. The next focus for markets is the UK Parliament will vote on Theresa May’s ‘plan B’ on January 29.”

Head of sectors for Bank of Ireland Pierce Butler discussed the impact Brexit is having on businesses in Ireland, but said that Brexit will also create opportunities for some Irish companies. “I think the uncertainty around Brexit has impacted in terms of business confidence. The bank produces an economic pulse, which is a survey of 1,900 businesses on a monthly basis and it measures business sentiment, and last year was really a tale of two halves. In the first half we saw increasing levels of business sentiment, and in the second half we saw that reduce down.

“Having said that, companies are very positive about the outlook for their own businesses. Bank of Ireland conducted research with RedC Research which found that 58% of companies expect their profits to grow in 2019, and only 10% expect a reduction.

“There will be opportunities around Brexit for a number of companies and they should particularly focus on who their competitors are in the UK and what markets they are exporting to in either Ireland or mainland Europe and if there’s an opportunity to displace those,” he added.

Lee Evans is commonly asked about the outlook for Sterling and he ran through some possible scenarios. “If we start with a no deal scenario, the Bank of England has forecasted a 25% decrease in Sterling which we see as a little bit excessive. The all-time high in Sterling is 98p so we imagine that will probably be challenged in a no deal scenario. On the other side, if we do see agreement of a deal then we expect a move back down towards the low 80p range while an extension of Article 50 should limit Sterling gains to 85p. Sterling is definitely undervalued so the risks are very much two-sided at the moment.

A number of firms have postponed their investment decisions until they have clarity around the outcome of Brexit, but Pierce Butler has urged business owners to reach out for support. “Our message is come and talk to us. As Ireland’s largest business lender, we want to support our customers whether that’s through short-term cashflow requirements or long-term investment funding.”

You can find a range of business supports, insights and resources on the Bank of Ireland website here. You can also watch the full vodcast below.

Article by Stephen Larkin.