AO World founder, John Roberts, has said that the plan to stockpile £15m of goods in preparation for Brexit was “wasted money” despite having everything ready for a potentially chaotic time. The CEO, who recently returned to the company, said that the money would have been better spent on “much (more) positive things”. The frank words came after AO World was forced to offer profit warnings when announcing that they would be taking the step to safeguard their businesses in the UK and Germany.
Brexit concerns for UK businesses
The Brexit negotiations have proven uncertain times for businesses around Europe, and especially for those with the majority of their business conducted in the UK. Many companies announced that they would be stockpiling goods, primarily for fear of a border gridlock. Honda and other major car manufacturers that operate in the UK said that they would be frontloading manufacturing, meaning that they would produce cars early so that they could be shipped abroad before potential changes to border control take effect. BMW plans to close its Mini plant for a month following Brexit because they are worried about supply issues for car parts.
At the beginning of April, AO World announced that it had spent three months stockpiling goods. They said that they were taking the move to prevent supply issues that might be faced if borders were closed and imports prevented. John Roberts, CEO at the time of the announcement, said that the move would “ensure we can continue to deliver our market-leading proposition to our customers.”
AO changes and struggles
At the beginning of the year, it was announced that John Roberts, who founded the retail company, would return as CEO after two years away from the organisation.
The online retailer has been struggling in its UK and German markets in recent months. Share prices have fallen 36% in the past six months, but the company hopes that the reinstallation of Roberts at the helm will help turn the ship around.
Ready for a turnaround?
However, things may be looking up for the company as they prepare to launch AO Mobile in the summer. They have also unveiled their first foray into the white goods rental market, showing that the board is not willing to sit back while company profits take a turn. However, Roberts clearly thinks that the company would have been better spending the £15m they have invested in Brexit stockpiling on other business matters.