Profits plunge into the red at Victoria Plum after trademark battle
PROFITS have taken a nosedive at online bathroom and bedroom retailer Victoria Plum following increased operational costs an expensive legal battle with a rival.
The Hessle-based company, which has a major warehouse in Doncaster, has entered the red following a trademark dispute with Victoria Plumbing.
From a £1.9m profit the year before, Victoria Plum fell into pre-tax losses of £12.5m on ordinary operations for the year to 29 February 2016.
Turnover also fell to £70.3m, from £72.3m last year.
Legal fees cost the business £678,000 during the year, on top of £466,000 they had spent the previous year.
Its warehouse relocation costs amounted to £2.6m and saw several legacy sites close during the year. Victoria Plum also employed another 100 people during the year, bringing staff numbers to 236, nearly doubling its wage bill to £8.8m.
Directors said that the “unlawful actions” of rival Victorian Plumbing, who allegedly paid to advertise in search engine results for the Victoria Plum brand name, had a “material impact” on the firm over a long period of time. The court passed judgement in favour of the Yorkshire-based retailer on 18 November 2016, and Victoria Plum is now seeking damages from its rival.
Merseyside-based Victorian Plumbing however was also successful in a counterclaim against the firm for passing off, which would mean that Victoria Plum is forced to pay out a significant sum.
Global private equity TPG took a major stake in the business in 2014, and these are the first full year accounts since the acquisition. No dividends were recommended for the year.
The company said it had “created the foundations” for a return to profitability, focusing on its online presence, branding and operations. It received an additional £11m investment from shareholders following the successful court ruling which it will use to grow the business.
