North East outdoor brand Berghaus has swung to a loss after investing in a multimillion-pound advertising campaign in a bid to bring in new UK customers.
The Sunderland based business, which designs and makes outdoor clothing, footwear and accessories, has released financial results for 2018 which show that last year’s operating profit of £1m was converted to a loss of £800,000.
The Sunderland firm cited heavy investments in a marketing communications campaign as a major factor for the loss.
It spent several million pounds on the drive – including its Time to Get Out ad campaign to inspire people to escape the pressures of life by sharing time in the outdoors – which it said was designed to start building the awareness and appeal of the brand in the UK, and create a positive impact on sales in the longer term.
The firm’s global turnover also fell slightly, from £54.6m to £54.2m, but a geographical breakdown of turnover showed that the ad campaign was having an impact, with UK sales on the up, rising from £43.6m to £44.1m.
That reverses the previous year’s £2.6m drop in UK sales from £46.2m.
The publication of the accounts follows a year in which the Berghaus executive team led a comprehensive brand review project and developed a long-term marketing communications strategy for the business.
Supported by parent company Pentland Brands, the firm also created a raft of new jobs in moves to bring its innovations to the market faster.
The company also continued to focus on product development and began the process of creating the next generation of cutting-edge outdoor gear, assigning key members of the team to high priority innovation projects.
Berghaus brand director Kev McFadyen said: “The 2018 results are in line with our expectations.
“The year saw a lot of change in the ways that we do business around the world, which inevitably had some impact on turnover overseas, and, as planned, we made a very significant investment in brand marketing.
“The full effects of that, along with our strong focus on new product development – and specifically innovation – will be felt in the longer term. In that context, it was very encouraging that Berghaus achieved an increase in its UK turnover, particularly in a flat and ever more challenging trading environment.”
