Victoria Beckham losses shrink, beauty launch boosts sales
Victoria Beckham’s fashion business is still making losses but those losses are shrinking, the firm’s latest accounts have shown. The company cut costs last year and also saw beauty and online sales rising. This helped it weather the tough environment at the height of the pandemic as her London flagship and other stores that sell the brand were forced to close.
The pre-tax loss for Victoria Beckham Holdings (which owns the fashion label and controls her beauty brand) was £8.7million last year. That was down from a deficit of £16.6 million a year earlier.
That loss came as sales — understandably given what was going on last year — fell. However, they didn’t plunge as much as was the case at some of the label’s peers. Sales were down ‘only’ 6% to £36.1 million as the first full year of trading for Victoria Beckham Beauty helped the bottom line, contributing £7.3 million to the sales total.
But the company still relied on its shareholders injecting over £9 million into the business. The new money the shareholders invested in the firm was used to pay off a bank loan, fund a higher level of direct-to-consumer sales as e-commerce grew, and merge the company’s two labels into one main Victoria Beckham offer.
The company is owned by Victoria and David Beckham, Simon Fuller’s XIX Entertainment and private equity firm Neo Investment Partners. It’s unknown which of them participated in the new funding round but the firm’s accounts also show that a further £600,000 was invested during 2021 and that the shareholders will continue to support the operation as and when needed.
The company cut staff numbers last year and also the number of items produced for each collection as it pushed towards a more efficient business model. It has also cut prices in the last year as it works to widen the label’s appeal.
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