Victoria Beckham’s beauty sales helps offset fashion downturn

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The former Spice Girl’s beauty business enjoyed strong sales in its first year of operation, while its luxury brand suffered a Covid-induced slowdown

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Heavy sales in the first full year of Victoria Beckham’s beauty business helped offset weakness at the designer’s luxury fashion house last year, as the company moves to a new, lower-cost business model.

Accounts for Victoria Beckham Holdings, which owns 85% of Beckham’s fashion label and her new beauty business, posted losses last year despite declining sales in the luxury business.

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Group sales fell 6% to £38.3 million in the 12 months to December 2020. The company blamed COVID-19 restrictions, which forced the closure of the flagship Victoria Beckham store in Mayfair and disrupted its wholesale business.

The former Spice Girl’s newly launched beauty business was a bright spot. Launched in October 2019, the business recorded sales of £7.3 million in its first full year of operation. The brand sells beauty products such as the Rejuvenating Strength Serum – £180 for 30ml – and the “Posh” lipstick which goes for £34.

Speed ​​in the beauty business and cost-cutting in areas such as clothing, IT and supply chain management helped reduce losses within the overall group from £16.4 million to £8.6 million in 2019.

The workforce fell from 141 to 130 and the highest-paid directors, who were not named, saw their salaries drop from £641,667 to £120,000 in 2019.

The business relies on the support of Victoria Beckham and other shareholders, including her husband David, former Spice Girls manager Simon Fuller and former Goldman Sachs banker-turned-entrepreneur David Belhason.

Shareholders lent £9.2 million to Victoria Beckham Holdings last year and paid off bank loans on behalf of the business. The company received a further injection of £600,000 in April.

The directors said the pandemic had a “significant impact on the group” and that they “developed a new strategic plan for the business for the coming three years with a particular focus on cost reduction, streamlined operations and creating a model for the long term”. inspired to do it.”

Forecasts based on the new strategy show the luxury business, founded by Victoria Beckham in 2008, will continue to need shareholders’ support for the foreseeable future. The auditors included a current concern notice in the accounts, which warned of “material uncertainty” about the future of the business as a result.

The directors said they had a “reasonable expectation that any support from shareholders would be provided.”

According to the most recent Sunday Times Rich List, Beckham has an estimated net worth of £380 million.

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