U.K. sportswear chain JD Sports Fashion Plc said Brexit has severely tested its operations and it’s opening new warehouses in the European Union to avoid the hassles of customs checks.

A new 65,000 square-foot site near Dublin will become operational later this year and the company said it’s looking for another even larger facility in mainland Europe to avoid duties and disruptions from customs checks.

The retailer isn’t the only one looking for space and competition for sites is intensifying, Executive Chairman Peter Cowgill said by telephone. JD Sports is looking in countries including the Netherlands and Germany to meet growing online demand from European consumers.

The warehouses would likely have been located in the U.K. before Brexit, with new jobs being created there rather than on the continent, according to Cowgill.

“I would imagine that the European community are very happy with that but it is disappointing for the U.K. in many respects,” he said.

JD Sports said Tuesday it expects pretax profit of as much as 500 million pounds ($687 million) in the current fiscal year. The shares rose as much as 2.9% to a record.