Maintaining stable margins more challenging post Brexit, says Rooster

MIN sits down with Rooster’s Luke Morrison to unpick the reasoning behind opening and closing an EU warehouse in the space of four years – including customer duty rebates, freight forwarding, dealer zeitgeist and the benefits of a Chinese factory.

“Pre-Brexit we were a relatively highly profitable company with good steady growth,” says Luke Morrison, CEO of Rooster. The company makes innovative equipment for both dinghy and keelboat sailors like Aquafleece (which it brought to the market over 23 years ago), and is based on the south coast of the UK.

But now?

Like MIN’s recent discussions with companies such as Daniamant – livid with the cost of dual regulations – and Barton Marine – expressing outrage at the pain of taking exhibitions to the continent – Rooster is unhappy with the unnecessary Brexit burdens shackling the UK.

“Since day one we have been quite vocal about Brexit being the worst thing that could have happened,” says Morrison.

But Rooster took a different pathway than the two companies above.

Rooster capitalises a new company in Germany

“Very early on we decided that rather than giving up the large amount of business we have in the EU, we would invest and capitalise a new business in Germany and get a warehouse.

“We said to our European customers ‘we are going to back our business, back you and make it work, ensuring smooth product supply’.”

So that’s what Rooster did. It rented a warehouse in Witten, Germany with the accompanying outlay in finance. The idea was to stock up the warehouse – in addition to premises in the UK and USA. “We knew that there’d be turmoil over the first couple of years [of Brexit] with harmonising what stock we needed where, and how all that would work, but customers were able to get their product locally and from day one it reassured our marketplace.

“They thought ‘absolutely fantastic’.”

Weighing the benefits to costs of Rooster’s German warehouse

The move came with downsides, like having to de-invest in the UK, although Morrison says that wasn’t “too much change.”

“We thought in the run long it would work,” he says.

But by early 2024 the benefits were being weighed against the costs – and were found wanting.

“As a small-to-medium business, costs naturally accumulate over time. However, this also presents opportunities to consolidate, simplify our supply chain, and enhance the way we serve our customers — all while maintaining strong product availability and dependable support.

“Over time as supply chains have eased and UK shipping and exporting procedures have eased, it started to cast relevance over the Germany warehouse.”

The warehouse initially opened to get the product to the customer. Coming out of covid the expectation was that the European market was going to come back buoyant and carry on growing more than it had ever done before . . . . and that there wasn’t going to be a war in Ukraine.

Morrison notes that during this timeframe, dealer networks have also been experiencing a shift in customer purchasing behaviour.

He believes that’s driven by continued growth in online sales and lingering overstocking habits which were established during the covid era.

“It’s important to note that Rooster fundamentally believes in supporting a strong dealer network. Dealers remain our greatest asset for geographical growth, and we are proud to have built solid relationships with many across the globe,” he says.

“We have a compelling and well-considered product range that is built to meet the needs of our market. However, there is a growing perception within the marine industry that aligning product offerings with dealer needs — in a way that remains commercially sustainable — is becoming more challenging. In recent years, dealer networks have faced notable pressures, particularly due to the aftermath of covid and other global events that continue to reshape how customers buy and how products are promoted.”

At the same time, Morrison says, the ability to send parcels into Europe has become easier. He acknowledges there’s still the duties and VAT to figure out but says, in essence, things work.

While covid and Ukraine caused challenges, Morrison points out that those “didn’t involve having to pay extra duty, extra freight and additional investment into warehousing and what have you, because those processes weren’t working during the transitional and ultimate period of change. There is a lot that happened that was not a direct result of covid which forced additional costs onto the company and continue to today.”

Rooster closes its German warehouse and starts direct delivery

At the beginning of 2024, Rooster took the decision to bring its European dealers back to the UK and close the German warehouse – which happened in October. It paid its final bill in March 2025. The German company is being officially wound-up.

“We now seem to have European customers successfully purchasing from Rooster. Goods are leaving our UK warehouse or our China warehouse, and going directly to them,” says Morrison.

“Nine months in, we’re maintaining the customers well, but it’s on the proviso that we pay the duty. And there’s complexities around how we manage all of that, but generally we think it’s working.”

Morrison believes it was the right time to come back to the UK as that’s the company’s roots. Plus, In the medium to long term Rooster is a much less costly business to run without the German company.

“On a practical level, it’s the right thing to do. On a business level, we expect profitability to increase and continue to do so as we head into 2026/2027, essentially because we haven’t got an extra warehouse.

“There are still barriers – a customer can’t receive their package without enhanced paperwork through tariffs. That’s really tricky and does frustrate customers. But because we set the scene well and communicated well, our customers stay with us.”

Now he says Rooster is trying to work on enhancing its distributor network across Europe.

“We know that there are smaller entities who just want to take product from within the EU, we work with these resellers to ensure that they can receive product easily and cost effectively. We are also very lucky to have some great distributors.”

Rooster utilises its China factory for distribution

Rooster’s also had a factory it’s worked with for over 20 years in China. That long-standing and secure relationship means it’s now able to use that as ‘a consolidation hub’ from the other factories that produce Rooster products.

“Effectively, whether you’re a dealer, distributor or US store or UK warehouse, we can bring products together, containerise them and air freight them or whatever to any locations,” he says.

“We’ve put a programme together so customers can take product directly from the factory if they want – some like it, some don’t like it as they have to use freight forwarders instead of couriers. But it’s there as a back-stop. If people invest in more product we can do it more cost effectively from the factory.

“Our direct business is consistent; it’s growing quite nicely.”

Tariffs and the new world order for marine companies

Away from Rooster’s Brexit processes, last week, Morrison outlined his stance with Trump’s tariffs.

Rooster has an American company based in Virginia, USA, which was set up in 2014, and has been enjoying a ‘very buoyant’ market for selling sailing products.

“We think it’ll be a good year in the USA. Dealers that sell our products are starting to get engaged again and we think that will continue.”

He told MIN he expected the tariff chaos in advance and as such filled a couple of containers late last year to make sure Rooster weathered the immediate problems. He says that retail prices will increase, but he’s ready to absorb some of that.

Morrison’s frustrated that he’s not seeing an appetite to help businesses deal with these sort of things in the medium term from any political angle.

“It’s just a more challenging environment and we all have to work a lot harder for it.”

Rooster’s markets around the world

Within this challenging environment, Morrison uses the word ‘okay’ to describe the overall marine market.

“The market place is ‘okay’,” he says and adds “we anticipate an ‘okay’ year.”

He’s looking for a lot more stability at government level to take his predictions above ‘okay’.

“Not just in the UK but around the world. There’s a lot of instability. Taxes are high, inflation’s slightly back up again. All of those things have a real effect on someone’s brain when they decide if they’re going to use some of their disposal income.

“We’ve seen consistent growth within the UK market in recent years, while international performance has been more varied. We’re steadily building strong direct and dealer growth in the USA and Australasia, whereas Europe remains, at times, more challenging. That said, significant opportunity still exists, and our approach to targeting the right individuals and businesses continues to evolve — and with success. Over the past six months, we’ve welcomed a number of new dealers and distributors into the Rooster network, further strengthening our global presence.”

“In the EU there is a lot more scepticism about parting with cash and investing in small boat sailing and watercraft and technical apparel. You can see that in the numbers and our dealers report that too.”

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