Brand Architekts sees losses after cost and supply chain issues

Brand Architekts has revealed its financial results for the six months ending 31 December 2021, revealing a decrease in revenue and profits.

Revenue decreased 19% to £7.4 million, compared to £9 million the previous year. The drop in revenue can be attributed to delays caused by the pandemic and supply chain issues linked to several of its brand relaunches.

Underlying gross profit margin dropped to 32.5% from 36.3% a year ago, which was impacted by increased freight charges on Christmas gift product range sourced from China.

Brand Architekts reported a pre-tax loss of £1.1 million, against a pre-tax gain of £0.4 million in the previous H1, after dealing with additional freight charges and increased marketing spend for the launch of its new marketplace.

However, the group emphasised the success of continued distribution gains for its Super Facialist brand. After a successful trial period, Super Facialist will be launching 14 products across 200+ Tesco stores in June 2022.

The relaunch of Root Perfect resulted in strong distribution gains in 300+ pan European retail chain Normal stores across Europe and also in Morrisons. The group expects to see "strong" distribution gains in H1 2022/23.

Quentin Higham, CEO of Brand Architekts, said: “Our plans to relaunch seven of our brands were impacted by retail headwinds created by the COVID pandemic, which resulted in three key retailers delaying the brand relaunches by three months. In addition, cost price increases throughout the supply chain, including freight, raw materials, componentry and energy impacted our short term performance.

"We are confident that effectively implementing our brand reach and brand development strategies will drive growth in the future. We are pleased with the launch of our marketplace theunexpektedstore.com, which enables us to offer consumers a fully omnichannel solution. In the second half of the year, we will look to accelerate our digital first strategy and build out further distribution gains, as we seek to add scale to our business. Whilst challenges remain in the markets in which we operate we remain confident in our strategy and the group’s ability to achieve our aims."