Major ad campaign and flat sales push Berghaus into the red
Pentland-owned outdoor clothing retailer Berghaus saw its results fall into the red in 2018 after launching a multi-million-pound campaign designed to drive brand awareness.
The Sunderland-based business has revealed that a £1 million profit in 2017 turned into pre-tax losses of £800,000 in the year to 31 December 2018, hurt by the uncertain political and economic climate and a significant investment in marketing.
The ‘Time to Get Out’ campaign launched in September across out of home, press, video on demand, digital radio and TV. Developed with creative agency VCCP, it was the largest ever advertising push done by an outdoor brand in the UK.
The work highlighted the retailer’s wide assortment of outdoor clothing and equipment with an invitation to rediscover the outdoors as an antidote to the stress of modern living.
But it seems it failed to give the business a significant sales boost, with global revenues remaining broadly flat at £54.2 million. According to a media report, UK sales increased slightly from £43.6 million to £44.1 million.
“The 2018 results are in line with our expectations,” said brand director, Kev McFadyen to Business Live.
“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.”
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