THE shops were full of early Black Friday bargain hunters, yet only a slow stream of customers could be seen at Victoria Beckham’s swanky London boutique yesterday.
And after fingering the £1,000 dresses and £890 gold sandals, the vast majority walked out empty-handed.
Despite company accounts showing a loss of £12.2million for 2018, it was business as usual for Victoria Beckham last week at a swanky launch for her beauty products[/caption]
Little wonder the former Spice Girl’s fashion empire is floundering.
Company accounts this week showed her designer-clothing business recorded its highest loss so far — £12.2million for 2018 — bringing total losses over 11 years to £42million.
On the face of it, Victoria, 45, seems to have every advantage, from famous friends to great connections in the industry and a huge, loyal following.
She is pals with American Vogue editor and fashion show front-row queen Anna Wintour, has the money to hire the very best team and has even dressed royalty, with Meghan wearing several of her designs.
Actresses, such as best pal Eva Longoria, as well as Gwyneth Paltrow and Kate Winslet, have also been pictured in her chic tailoring.
And she is so clued-up at promoting her goods to her 27million Instagram followers that her label was this year named as London Fashion Week’s most influential brand in terms of media impact.
Yet still she cannot make a success of it. Instead, she has to rely on hubby David to prop up her dream.
It is thought the former Manchester United ace and England captain, 44, has poured in £23million over three years.
This year, accounts show Posh’s company needed a £16million bailout from shareholders. Their identity has not been revealed.
‘NOT MANY BUSINESSES CAN LOSE £10MILLION A YEAR’
At around the same time, one of David’s firms, Footwork Productions Ltd, invested £15.5million with an unnamed “associated company”.
The accounts show DB Ventures, another of David’s companies, lent Victoria £600,000 last year.
In March 2016 it was reported he had transferred £5.2million to her company. And in January 2017, accounts showed Victoria Beckham Limited owed David’s company £6.6million.
That same year, Victoria also raised £30million in funding from private equity firm Neo Investment Partners.
As hobbies go, this one would appear to be getting well out of hand — and experts are surprised at how she can continue to turn in such massive losses.
Equity research analyst Alex DeGroote said: “The question is whether there is a sustainable route to profit. How does this business turn a profit? There aren’t many businesses out there that can lose £10million every year. You can see from the accounts that the other parts of the Beckham empire are helping to support Victoria’s business.”
And that magic money tree is not bearing as much fruit as it was.
Annual accounts for their joint empire, Beckham Brand Holdings, which controls all their separate companies, has suffered its first-ever loss — £1.6million in 2018.
The previous year it had a net profit of £12.3million.
Profits at DB Ventures have halved in a year, from £23.3million in 2017 to £11.5million in 2018.
One financial expert told The Sun: “This will be hugely embarrassing for the Beckhams as it indicates they don’t quite have the same pulling power as they once did.
“If a regular company saw its profits more than halve, it would be a major crisis.”
IS IT TOO LATE FOR POSH TO MAKE HER MARK?
Yet according to Victoria’s brand’s very calm chairman, Ralph Toledano, there is nothing to worry about.
He said: “The performance was in line with expectations, so we were not surprised. Our goal is to reach profitability as soon as possible.” And Victoria, who insists her career is “not a vanity project”, says it takes time to make a profit.
In March, she said: “We’re on the right track to do that, but it’s not going to happen tomorrow.”
Despite having all the right connections, accounts show that this year, Victoria’s floundering empire needed a £16million bailout from shareholders[/caption]
Despite not having any formal training in the fashion industry, some of her dresses go for up to £2,000 each[/caption]
In more bad news for the couple, annual accounts for their joint empire, Beckham Brand Holdings, which controls all their separate companies, revealed it had suffered its first-ever loss — £1.6million in 2018.[/caption]
The Black Friday hordes seemed to be avoiding the Victoria Beckham store in Mayfair[/caption]
So what exactly is that right track?
And is it simply too late for Posh to make a mark in a crowded market that has already seen brands such as Oasis frontman Liam Gallagher’s Pretty Green hit the buffers (it has since been rescued by JD Sport).
She still struggles to get her clothing worn by the big-name stars.
A-listers are still far more likely to appear in heritage brands, such as Dior, Versace and Valentino, than be snapped wearing a frock by a former pop star from Essex with no formal fashion training.
Stefano Gabbana, one half of iconic fashion duo Dolce & Gabbana, pointed out the difference, once saying: “She’s a designer, but for us she doesn’t make clothes the same way like a fashion designer.”
Victoria has made several changes to her business in the past couple of years in a bid to turn the tide.
The £30million raised in 2017 from private equity firm Neo Investment Partners was a deal that valued the business at £100million.
Around a third of staff were made redundant last year which, along with renegotiated supplier contracts, has reduced costs by £2.5million.
The management team has also changed. Victoria has previously admitted mistakes were made in the early days.
She said: “We didn’t have anybody who was challenging suppliers and factories.
“I think at the beginning I overpaid for things unknowingly. I don’t think anyone was taking advantage, I just think my people didn’t know they could have pushed back.”
The high cost of Victoria’s clothes is one of her biggest problems.
Her chairman Ralph, who is also head of the French governing body for the fashion industry and joined her brand in 2018, recognised this and straight away slashed prices by 20 to 30 per cent, according to Business Of Fashion magazine.
LEGGINGS COSTING MORE THAN £100
He said: “Pricing was a real, real issue. The customer was telling us, ‘We love your product but the price is too high’.”
The key change, though, has been to diversify and start selling more-affordable items, aping the business models of luxury firms such as LVMH.
That firm owns brands as diverse as Christian Dior — with its £6,500 lace dresses — to Veuve Clicquot champagne, currently available for £35 at Tesco.
The LVMH model sees it rake in a fortune from the lower-ticket items to help prop up the high-end part of the business.
Victoria has attempted to make her brand more affordable. Cheaper items have come via a collaboration with Reebok to expand her reach to younger, less wealthy consumers.
Yet with leggings costing more than £100, the range is still far more expensive than your average workout gear, which fans were quick to point out.
With many items at the Reebok store currently on sale, a simple white vest top will still set you back £52.47, down from £74.95. The only real difference between that and an ordinary Reebok top is a subtle entwining of VB into its logo.
Even a pair of luminous running socks would cost you nearly £30, yet Reebok’s own-brand white ones come in packs of three for less than half that.
Last month, in yet another bid to attract customers, Posh launched a Christmas gift guide with a similar ethos.
She plugged a keyring for £165 and a statement T-shirt emblazoned with the slogan “I can’t concentrate in flats” for £95.
There is also the more affordable Victoria by Victoria Beckham range — with dresses for around £500 and tops for less than £300 — which can be seen as a not-too-impossible leap from high street stores such as Reiss and Whistles.
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And she is selling sunglasses with similar price tags to other designer shades.
But it is perhaps with cosmetics that she may receive a much-needed lifeline.
Chanel, one of the high-end brands Victoria is a fan of, is said to make around 60 per cent of its revenue from its cosmetics, which are cheap to manufacture.
Victoria launched her own Victoria Beckham Beauty range in September — she had a previous partnership with Estee Lauder in 2017 — with products including £18 lip liner and a £28 eye shadow.
There is also a fragrance line in the pipeline and an upcoming “aggressive strategy” in Asia for 2020, according to Ralph.
So to borrow from one of her Spice Girls’ hits, for now the message to shareholders — and patient David — has to be: If you want my future, forget my past.
Beckham clan with Anna Wintour and James Corden at a fashion show in 2015[/caption]
Lean times for Victoria, as she is seen posing in her London store[/caption]
A-listers are still far more likely to appear in heritage brands, such as Dior, Versace and Valentino, than be snapped wearing a frock by a former pop star from Essex[/caption]
There are signs the wider Beckham brand is losing it pulling power — and earning potential[/caption]
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