Be Modern Reports Widening Losses Amid Economic Challenges
South Tyneside-based furniture manufacturer Be Modern has reported a widening of its operating losses in its latest financial year, as the company grapples with significant cost pressures. Despite this, the firm's leadership remains optimistic about future prospects, citing recent efficiency improvements and the introduction of new product lines.
Financial Performance Details
Newly published accounts for Be Modern Limited reveal that the company sustained operating losses exceeding £1 million in the year ending May 10, 2025. This represents an increase from the £940,359 loss recorded in the previous financial period. Concurrently, gross profit declined from £10.8 million to £9.8 million, while turnover also experienced a reduction, falling from £20.8 million to £19.2 million.
The Jarrow-based firm, which has been trading for more than six decades, operates from a 250,000 square foot production and warehouse facility. It employs approximately 236 staff, a decrease from 254 the previous year, as part of cost-saving measures. Be Modern produces several well-known brands for the UK market, including Diamond Luxury Fireplaces, Atlanta Bathrooms, Elgin & Hall, and Prysm, specializing in fireplaces, stoves, and bathroom furniture.
Directors Address Economic Pressures
In the company accounts, director Stephen Grimes provided detailed commentary on the challenging economic environment. He noted that rising costs in labor, materials, and overheads have significantly impacted manufacturing expenses. Specific factors mentioned include increases in the National Insurance contribution threshold and percentage, along with the rise in the minimum wage following the 2024 Budget.
Mr. Grimes expressed uncertainty regarding how the ongoing cost of living crisis might affect consumer demand for the company's products in the coming year. He explained, "It remains to be seen how the continuing cost of living crisis caused by an unprecedented increase in the cost of power, fuel, interest rates and basic foodstuffs will impact on the demand for the company's products over the coming year should customers reign in their discretionary expenditure in response to these cost pressures."
He further warned that the company may need to pass on some of these increased supply chain costs to customers over the next twelve months to maintain profit margins.
Optimism for Future Improvement
Despite the financial setbacks, Be Modern's directors highlighted several positive developments. They expressed satisfaction with efficiency improvements that resulted in a smaller decline in gross margin than anticipated. The company continues to invest in new product ranges and strategies for growth, while also enhancing service levels for existing customers.
Mr. Grimes reported encouraging signs from the current financial year, stating, "The measures taken by the directors to reduce the company's cost base in the latter part of the 2025 financial year and the introduction of new products appear to have had a positive impact on the current year as the half year results indicate a significant improvement on the previous year."
While this progress provides cause for optimism, the directors emphasized their commitment to exploring additional cost-saving measures and commercial opportunities moving forward. The company's long-standing presence in the South Tyneside manufacturing sector and its diversified brand portfolio position it to navigate the challenging economic landscape with resilience and strategic foresight.
