After the pound flash crashed last week, the gym chain has caught a case of the jitters as startups prepare for a hard Brexit
The pound went into freefall on Friday after Theresa May signalled that she’d work towards a hard Brexit, which could mean the UK leaves the single market. Amidst the mounting concerns around the impending negotiations with the EU – not to mention speculation on what it could mean for British SMEs – Pure Gym, a gym chain, has decided to drop its plans to float less than a month after announcing its IPO.
A statement issued by the company said that “market volatility” was the main reason for its decision. “Given the challenging IPO market conditions, the board has decided not to proceed with a listing despite the strong interest shown by potential investors,” said Humphrey Cobbold, CEO of Pure Gym.
This is the second time the company has pumped the breaks on its public offering, having previously done so in order to see what the outcome of the EU referendum would be. Despite this, Cobbold is optimistic about the company’s future as the company has opened 35 new gyms and gained 150,000 new members in the last year.“
However, Pure Gym is not the only startup affected by the uncertain market. Doron Cohen, CEO of Covercy, a fintech startup, is also worried about a potential hard Brexit. “The consequences of what this actually means and how much red tape will be involved is the real unknown for financial businesses,” he said. “However, it is safe to say that jobs in the financial sector in the UK would be lost to other EU regions, with Frankfurt being the most likely destination to benefit most.”
Given the growing concerns about what kind of deal the UK will negotiate with the EU, it’s safe to say that we’ve yet to see just how startups will be affected by Brexit.