Land of promise

Land of promise

Richard Cotter has no doubt where the Chinese stand on the environment, and he intends to take Berghaus to global leadership on the back of it, writes Brian Nicholls.

OPINION differs remarkably between the administrations of George Bush and Richard Cotter over Chinese attitudes to the green environment. Whereas the US President’s administration alleges Chinese indifference, using it as a pretext for its own obduracy, Richard Cotter, brand president (chief executive) of Berghaus in Sunderland, sees China as receptive and a big potential market for his company’s environmentally friendly goods.

Comparing the current eco-performance of the United States with that of Berghaus - relatively speaking of course! - one might incline more at this point towards Richard’s hunch, particularly as Berghaus thrives in almost 30 countries already. Richard was just four years old when Berghaus was set up in 1966, initially as an importer and distributor of outdoor performance clothing and equipment. Later, as a teenager, he was still more interested in golf and football than hiking, walking and climbing.

But now he has the exciting goal of leading Berghaus; now designing, manufacturing and selling its own products with 120 staff, as part of Pentland Group - through one of its most exciting and telling periods. The market leader in Britain, and a foremost brand in Europe already, it is going flat out to be a global brand leader with turnover almost doubled to £100m by 2012.

That means thrusting into the Far East, Australia and the United States. Having completed a second deal in Japan to have 180 outlets there by the end of next year – besides nine already established – Richard expects to be into China within two or three months.

“That, along with our presence in Korea, will give us a considerable hold on the Far East,” he points out. He has no misgiving about China and sustainability: “The Chinese recognise the implications of global warming. They recognise the environmental story is going to change. So, from our point of view, we believe China is about to make a major thrust into the brand market.”

That comes from a firm already holding a Queen’s Award for Enterprise. It suggests China to be a land of promise indeed for its new 365Life range of clothing, now being promoted heavily in Britain and the other markets. Notable in earlier years as a European pioneer in use of Gore-Tex, and one of the first creators of a back pack with an internal frame, Berghaus has also been environmentally aware for some time now in its manufacture of outdoor wear; recycling plastic to make fleeces, and polyesters to make rucksacks.

Environment is to be a long-term key word in its ranges, and it is optimistic about this in its vision for growth. “Our ranges will tend to be environmentally friendly, partly because we feel it right and partly because our customers are looking that way anyway,” he explains.

The 365Life collection of free-range clothing - cotton wear totally organic and accessories of 55% recycled polyester - enters this category, designed (as the marketing prose puts it) to keep you and the outdoors looking great. “Cool” and “stylish” are the adjectives used, and approving nods have already been seen from Chinese connections. Whereas Berghaus reckons the average cotton t-shirt requires about 17 teaspoons of pesticides to cultivate, its own 365Life is using 100% organic.

Richard says: “We shall know by the end of summer how successful the range will be. But we are heartened to date by the response of retailers. They are usually wary of claims made for new products. “In this case they have been encouraging. We foresee good sales growth for at least five or 10 years,” he added. Fortunes of 365Life fit a context of general progress as consumers become more health and fitness conscious. Richard suggests: “Over the next 10 or 20 years what we call outdoor activities will mushroom. There has already been a big sports boom globally.

“Now we have evidence of the outdoor activities taking off, not only from Britain but from the like of Germany, Sweden, Korea and Japan. Many more people of different nationalities are looking to the outdoors for exercise.

“They are not into high-altitude climbing necessarily. They are not looking to scale an Alpine peak or even Snowdonia or Ben Nevis. But they do want to get out into places like the Lake District and Kielder, for which they also want functional wear – warm, dry and hooded.”

If this is true, and family participation is the in thing, as Richard thinks, prospects are even better. For, as he points out: “Parents who have already tried it will say: ‘We trust this brand.’ Berghaus is bought for the children too. It is then family-endorsed.”

Many bosses use golf courses to seal deals and poach rivals’ key executives. Does Richard, a former golf professional, employ past experiences on links and greens to advance Berghaus? He does seem to keep his eye on the ball over objectives, and certainly follows through in chasing new business, as witness Japan. “I haven’t quite got my personal check-in desk at Schiphol Airport yet, but it’s starting to look that way,” he laughs when asked the extent of his travelling.

As for golf’s influence, he admits: “I always to carry a scorecard, something we can measure against in performance. I am not interested in our competitors. We measure ourselves against what we feel we can be.” What else motivates him? “Enhancing the brand - especially through people around me. I get great pleasure watching our people develop and contribute to the good of the business, so that the brand grows and succeeds. That gives a huge sense of reward.

“I also have a sense of legacy – when eventually I walk away, what legacy will I leave? Will Berghaus be stronger, more effective and more profitable than before I arrived? For me it is never about numbers. It is about how good you can be.” Berghaus develops two new ranges a year of proven global lines.

Richard explains: “We examine all the markets, and the different regions select what they see as likely to sell where they are. Apparel for Japan and Korea will vary in size from that sold elsewhere. Otherwise, items are much the same everywhere – same stitching, same style and same panelling for example.” How, then, does Berghaus chalk up success at the rate it does?

“We are clear about what our consumers are buying. We identify with what they are buying. Many branded businesses promote what they hope to see accepted, rather than providing what consumers would like. “We try to provide things matching up to their greatest expectations. We constantly ask: why do consumers buy our products? Then we must continue to deliver that ahead of anyone else. We are good at this, and at delivering quality products. We are strong.”

Many of the firm’s employees are consumers in the outdoor market themselves, while out and about, watching and listening to what others want.

“This way, we bring perspective to our products,” Richard says. What he says, he does. During a recent ski-ing visit to Cortina with his wife he wore the same cotton t-shirt five days running. No complaint from Mrs Cotter. That was because it contains a “silver iron” technology which takes any smell out. Such a garment can be worn for up to seven days – ideal for bachelors, Richard agrees.

“And even more so if it was self-ironing,” he laughs. Describing Berghaus as an outdoor specialist does not tell all, since activities like indoor rock climbing, the quickest growing participation sport, now enter the reckoning too.

But Berghaus products basically divide into four groups: a top mountain line for serious climbers, outdoor action for the like of walking and ski-ing, the Ator group for mountain biking and similar activities, and the 365Line lifestyle for sitting round the camp fire or other relaxation after activities.

About 50 Berghaus stores will have been created by the end of this year. Because Berghaus operates a licensing arrangement and brand-manages, the flagship premises at Seoul - and some elsewhere - look identical to the Berghaus recently opened at the MetroCentre in Gateshead.

With such an intensive expansion drive already under way, credit ratings exemplary and considerable scope seen yet for organic growth, any likelihood of acquisitions seems faint.