Victoria Beckham pre-Covid losses grow, underlying progress in right direction
Losses widened at Victoria Beckham’s fashion company, despite rising sales, in the year before the pandemic as it invested in its beauty launch, results due to be filed at Companies House have shown.
The news came as part of the wider information about the combined David and Victoria Beckham business empire, which saw the celebrity couple being paid £14.5 million in 2019. And they were also paid dividends adding up to £7.1 million in 2020.
But while the net loss for the Victoria Beckham fashion label grew to £16.6 million in 2019, both Victoria Beckham Holdings Limited (VBHL) and David Beckham Ventures Limited (DBVL) saw their revenues rising during the period.
DVBL is brand management company that controls the business activities linked to the David Beckham brand, such as the former footballer’s deal with Adidas. And during the year it bought out the 33% stake that had been held by XIX Entertainment, so the Beckhams are now the sole owners of the company.
The Victoria Beckham label itself, which is owned by Beckham Brand Holdings Limited, XIX Entertainment, and private equity firm NEO investment Partners, saw revenues rising 7% to £38.3 million in the year. That happened as the company launched into beauty, expanded its wholesale operations and saw online sales rising during the year.
But the beauty launch also involved it in heavy costs and its £16.6 million pre-tax loss was bigger than the £12.5 million loss of the year before. Yet had those launch costs not been included, the loss would actually have shrunk down to £4.5 million from £10.5 million in the previous period. This showed that the firm was headed in the right direction before the Covid crisis wreaked havoc on the luxury fashion sector.
2020 will have hit the company hard with the Dover Street flagship having been forced to close during lockdowns. The bottom line will also have been affected by it not taking government money to furlough its staff during the pandemic. The company had originally intended to take the money but a publicity backlash saw it changing its mind.
Some headlines have focused on the future of the label given that the results filing also includes a ‘going concern’ warning. But the directors said they’re focused on getting it towards break-even. And it's worth noting that Superdry’s latest figures this week contained a similar warning, which its CEO dismissed as a technical requirement. The Beckham filing also comes with a statement that there’s a “reasonable expectation” that the couple would continue to support the business. And the shareholders actually paid more than £9 million into it last April in order to settle a loan that was due and to support its ongoing operations during the pandemic.
Meanwhile, moving away from Victoria’s business and looking at the David Beckham operation, having launched new projects such as DB Eyewear in a deal with Safilo during the year, DBVL sales rose to £16.2 million from £15.6 million. But pre-tax profits dropped to £11.3 million from £14.8 million as it donated £1 million to Unicef, took on new staff and dealt with unfavourable currency exchange issues. Profit after tax was £9 million, down from £11.5 million the previous year.
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