JD Sports is set to open an EU-based distribution centre to cope with increased Brexit red tape and tariffs.
The decision could see up to 1,000 jobs moved to the continent amid concerns over delays in shipping goods and red tape just a month after post-Brexit trade rules came into effect.
Chairman Peter Cowgill told BBC Radio 4 the move “would make a lot of economic sense” and although its existing Rochdale warehouse would stay open, “it would mean the transfer of a number of jobs into Europe”.
No current jobs at the UK site will be lost but Cowgill said opening another EU warehouse would mean a “transfer” of job creation.
It echoes similar concerns from other UK retailers who are scrambling to revamp supply chains to minimise tariffs. Online retailer Asos are said to be rerouting some deliveries to their European warehouses.
JD Sports imports from East Asia but new rules of origin, if these products are shipped to the UK and then shipped to the Europe it will face hefty tariffs.
Cowgill said the post-Brexit trade agreement is “considerably worse than predicted” and “All the spin that was put on it about being free trade and free movement has not been the reality”.
“The new system and red tape just slows down efficiency. The freedom of movement and obstacles are quite difficult at the moment. I don’t see that regulatory paperwork easing much in the short term.”
The sports retailer has adapted away from its bricks-and-mortar stores due to lockdown restrictions. But Cowgill hit out at the government’s decision to close non-essential shops while allowing essential shops to stay open.
“Some essential retailers have been making hay out of selling clothes, whilst clothing retailers have been closed. It is bizarre.”
Earlier today JD Sports announced it had raised £464.2m which it will use to fund expansion plans as it mulls acquisition opportunities in new markets.