Victoria Beckham loss widens but Target, Reebok, Lauder deals to boost growth
Victoria Beckham’s brand may have lost over £8 million last year but the company is upbeat and said in accounts filed at the UK’s Companies House this week that it “continued to perform well in all its markets, despite a difficult trading environment”.
The accounts, which frustratingly only cover the year to last December, may have revealed “stable” revenue of £36.372 million (actually down ever-so-slightly from £36.912 million a year earlier), but net losses ballooned 78% to £8.4 million. That was the result of it investing "heavily" in design, production, marketing, and sales, it said.
The company, which makes the Victoria Beckham and Victoria ranges, as well as licensing products like eyewear and beauty, is controlled by the pop star-turned-fashion entrepreneur, her husband David and her former manager Simon Fuller. It is a subsidiary of Beckham Brands that represents the overall Beckham family interests.
The results could have been seen as bad news for some companies, but its owners have deep pockets and the strong reception for Beckham’s collections mean outside investors also find it an appealing prospect. The firm was restructured and refinanced this year and saw a £30 million investment from private finance group NEO Investment Partners only last month. That valued it at around £100 million. And the owners said they remain committed to growing it and driving it towards profitability, which must be a relief for its 180 employees.
So just what are its future prospects? In the accounts statement, Robert Dodds, one of its directors, said that a new link-up with US-based Target and a licensing deal with the Adidas-owned Reebok brand "will further enhance the profitability of the business.”
The Target deal is seen as important as it exposes the brand to a much wider audience, while the company also cited the strength of its Estée Lauder beauty license in its accounts, describing it as a “huge success” that sold out in a few weeks.
As far as the core fashion business is concerned, Beckham has been focusing on building distribution, working with key clients in North America, mainland Europe and the UK “to secure larger brand spaces in department stores.”
It said the retail channel “continued to perform well this year, through the flagship store in London and its second store in Hong Kong.”
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