In an effort to keep Victoria Beckham’s namesake label afloat during the COVID-19 pandemic, the former pop star, her husband David and private equity firm, Neo Investment Partners, reportedly pumped millions of dollars into the company.
According to accounts filed for Victoria Beckham Holdings (VBH), sales dropped 6% compared with the year before to £36m. However, the company’s £6.8m pre-tax loss was less than half the £15.6m loss observed in 2019. The company credits the improvements to better management of its supply chain and a new business approach where the label primarily sold direct-to-consumers (DTC).
Victoria Beckham saw sales dip when the U.K. implemented travel restrictions during the pandemic, forcing stores to close their doors for months at a time. The company, in response, cut a fifth of its staff in July 2020 and production by one-third. However, after facing significant backlash for furloughing 30 staff members at the beginning of the first COVID-19 lockdown and using public funds, the company reversed its decision.
In 2020, VBH reportedly employed roughly 130 people, with annual staff costs reaching £9.3m. The company’s highest-paid director saw an 80% reduction in salary compared to the year prior but still took home £120,000 during the year.
To keep the label going during the height of the pandemic, the company received £9.2m in funding from the Beckhams and Neo Investment Partners. Furthermore, in 2021, the company’s shareholders provided VBH with £600,000 in funds. During this time, the company also had to repay a loan to HSBC.
In the last six months alone, VBH has looked to cut prices on its dresses by as much as 40% and has opted for much simpler designs and the use of fewer embellished fabrics to widen its appeal to a bigger audience.
The group, however, remains bullish on its prospects. The company announced that its Victoria Beckham Beauty brand performed well within the first year of its launch, reaching £7.3m in sales last year, driven by demand for its skincare and makeup offerings.
But even with efforts to cut costs, widen the appeal and little glimmers of success, the company revealed that it would continue to rely on shareholders for financial support.