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VAT rise impact on UK golf retailers
November 17, 2010

David Kinsey of The Kinsey Partnership, Marbas' exclusive agent for the UK, Ireland and Middle East, demonstrates how, with the imminent VAT increase, retailers, resorts and golf clubs can take advantage of short-term cashflow benefits by collaborating with European manufacturers:

"Statements from the Government, industry think tanks and analysts have, to date, assured us that the imminent VAT rise should have minimal impact on the health of the retail sector. Last month the KPMG/Synovate Retail Think Tank (RTT), announced that next January's VAT increase to 20 per cent will have a relatively small impact on retailers and should even provide a short term boost to the sector.
"For retailers, resorts and golf clubs already doing business with European manufacturers and suppliers, they are able to take advantage of short-term cashflow benefits as continental invoices are VAT-exempt.
"As one of TGI Golf's leading margin earners, Marbas' high quality golf garments which are shipped directly from Italy provide this advantage to retailers and PGA professionals as it enables them to maintain healthy short-term cashflows.
"This strategy is by far a better alternative to knee-jerk price hike increases that have been forecast by many, including the Centre for Retail Research who recently undertook a study which found that 64 per cent of retailers surveyed would pass on 'most of' or the full amount of the VAT rise in the first month; while 98 per cent of retailers would ultimately pass on the whole of the VAT increase to customers.
"Recently, Helen Dickinson of KPMG commented: 'Retailers' need and desire to increase prices in advance of the rise, in order to protect margins which have been severely affected over the past two tough years, may [...] create a far more dramatic squeeze on consumer income.'
"The retail sector therefore must be cautious about wider economic changes the increase could trigger, and adopt strategies that limit any adverse impacts on consumer spending."
Marbas is an accredited supplier to the Open Championship, with clients including St Andrews Links, Royal St George's Golf Club and Turnberry. Ever since its launch into golf, Marbas has stood for the absolute excellence and quality of its garments. With 30 years' experience in producing fine-quality fabrics, together with Italian style and flair, Marbas has produced a golf range of unrivalled quality, capturing the imagination of the golf market.

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