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Berry Bros & Rudd set for multi-million pound losses as restructuring continues

Published:  14 October, 2013

Berry Bros & Rudd, the 315 year-old family owned wine merchants, is reported to be filing a £7.3 million pre-tax loss for this financial year.

The setback, however, was expected as the merchant is in the midst of investing £25m in an overhaul of its strategy that has refocused the core of the business on premium fine wine and spirits.  The new strategy included the sale of Cutty Sark in February 2010, a brand that was created in 1923 in the Berry Bros back "parlour" located in its famous London central office on St James Street.

Cutty Sark was more than just the "bread and butter" of the company's business it was also a major revenue earner and the spirits side of the business has gone from generating £60m of sales to just under £7m since Cutty Sark was sold. The sale to the Edrington Group allowed for the simultaneous purchase of The Glenrothes single malt whisky.

Berry Bros' five-year strategy also prompted the company to become a large stakeholder in Anchor Brewers & Distillers in San Francisco, American craft brewers, which allowed access to a large distribution network in the US.

Additionally, this year the merchant spent £7m on acquiring wine agency Richards Walford & Co.

As part of the large investment strategy and the divesting of some of its brand to refocus the company, some lean years were to be expected as the company repositioned itself. The company has also been eyeing markets abroad, specifically Hong Kong and Singapore, making an additional investment of £3m in the opening of wholly owned companies in Asia, better positioning itself, it said, for growth in the region.

Hugh Sturges, managing director of Berry Bros, said it was forecasted to record losses earlier than this year as the business continued to move forward with the five year investment strategy.