Outdoor clothing brand Berghaus has reported a significant financial setback, recording a pre-tax loss for the sixth consecutive year. The Sunderland-based firm’s latest accounts indicate a widening loss of £9.1 million for 2023, up from £3 million in the previous year.
Despite overall declining sales, Berghaus noted some international growth. However, the brand continues to grapple with financial challenges exacerbated by reduced trading through JD Sports, its parent Pentland Group’s majority-owned retail chain.
Berghaus, a Sunderland-headquartered outdoor clothing brand, has experienced pre-tax losses for six consecutive years. The latest financial accounts submitted to Companies House highlight a substantial pre-tax loss of £9.1 million for 2023. This represents a deepening of losses compared to the £3 million loss recorded in the previous year.
The rise in international sales has provided some respite amidst the broader financial challenges. Nevertheless, these gains were insufficient to offset the overall decline in turnover and profitability.
Inflationary pressures have also escalated the cost of sales, further impacting the company’s profit margins. The Berghaus board attributed the year’s financial movement to these combined factors.
For instance, Ellesse’s turnover fell from £16.3 million in 2022 to £12.9 million in 2023. Its pre-tax profit also reduced from £7.4 million to £5.8 million over the same period. This reflects broader market challenges impacting multiple brands within Pentland Group’s portfolio.
Kickers also saw its pre-tax loss widen significantly from £439,000 to £2.2 million over the financial year, illustrating the financial strains within the broader group.
The company’s focus on key performance indicators, mainly revenue, highlights the impact of JD Sports’ declining performance on Berghaus’s overall financial health.
Berghaus’s continued international growth, particularly in Europe and Ireland, offers a glimmer of hope. However, these positive trends need to be significantly scaled to offset domestic market losses and inflation-induced cost escalations.
The financial performance of Berghaus, characterised by significant pre-tax losses and turnover declines, underscores the challenges faced by the brand. Despite international growth, the impacts of reduced JD Sports trading and inflationary pressures are profound.
To navigate these financial difficulties, Berghaus must focus on broadening its international market reach and addressing the operational cost challenges. The coming years will be crucial for the brand’s financial recovery and overall stability.
