Berghaus benefits from Far East sales

Oct 12 2009 By Chris Knox, The Journal

OUTDOOR clothing company Berghaus expects to see significant growth by the end of the year as it continues to increase its global reach as well as benefit from the popularity of the ‘staycation’ among British holidaymakers.

The Sunderland firm saw its sales grow from £45m to £48.6m in its last full year with profits also increasing from £1.5m to almost £2m.

However the figures for 2008 do not accurately reflect its success as they do not include sales in the Far East, where most of its clothing is sold through third part licensing agreements.

Brand president Richard Cotter said that its business had seen "significant" increases in trade in the Far East and that Korea had become the fifth biggest market for the business.

Its parent company the Pentland Group is set to continue its investment into the Far East, and expects to be selling Berghaus clothing from more than 20 outlets in China by the start of 2010, having only set up in the country earlier this year.

Berghaus currently operates just under 100 stores worldwide, but said that it expected to break that barrier over the next few months. It exports to 22 countries. This will help add to the 140-strong workforce at its Sunderland headquarters, which is already up by 20 staff this year as sales continue to surge.

Mr Cotter said: "We are seeing real growth in the Far East, which is not reflected in our end of year results. We expect even bigger growth this year as a result of the continuing trend of people leading fit and active lifestyles as well as the rise of the ‘staycation’ which has definitely benefited us this year.

"This year provided another inconsistent summer, which has also been good for sales of our clothing."

Mr Cotter also said that the firm has strengthened its presence in Japan by restructuring its business in a market where it has enjoyed growing success over the last two years.

The brand is now being traded in Japan as a subsidiary, through the newly-formed Pentland Japan Company, and is expected to more than treble its sales to more than £6.2m by the end of 2012 as outdoor pursuits continue to become popular in the Far East.

Berghaus was born in the 1960s when Peter Lockey and Gordon Davison, who opened the LD mountain centre store in Newcastle in 1966, before launching the brand.

The brand has always prided itself on its reputation among serious outdoor enthusiasts and said that it wasn’t planning to compromise this in order to better serve the leisure market. "It’s fair to say that the recession has had the effect of seeing a number of outdoor clothing manufacturers using cheaper materials in order to better suit the leisure market and appeal to people on a budget," Mr Cotter said.

"This is a market that we are looking at, but that does not mean we will be compromising our core markets, as our customers expect a level of quality and clothing that could actually keep them alive in certain circumstances."

SEE Wednesday’s nebusiness for an in-depth look at the region’s outdoor clothing industry.