LONDON — The launch of Victoria Beckham Beauty took a bite out of the fashion brand’s bottom line in fiscal 2019, with losses widening to 16.6 million pounds from 12.5 million pounds, despite a 7 percent uptick in sales, according to accounts filed at Companies House in the U.K.
Consumer brand kingpins and social media superstars, Victoria and David Beckham filed 2019 accounts for their respective companies this week. The balance sheets lay bare two contrasting businesses that are growing at different speeds — although the couple are sharing the spoils.
David Beckham’s business is less than half the size, revenue-wise, of Victoria’s — but it’s profitable — while hers is not. Still, via cross shareholdings, the two took home a dividend of 14.5 million pounds in 2019, up from 11.1 million pounds in 2018.
The Beckham family is in Miami (home of Inter Miami CF, a new MLS soccer team cofounded by David, which played its first game last March).
Victoria, meanwhile, is working remotely on her fall 2021 collection, which will be presented on the digital schedule at London Fashion Week in February. Her team said she’s working U.K. hours and dialing in to fittings, castings and creative meetings.
Overall, Victoria’s brand saw sales increase 7 percent to 38.3 million pounds in the 12 months to Dec. 31, 2019.
“Our focus for 2019 was strengthening brand equity whilst reducing costs and streamlining operations. As a result, losses were halved and the business was on track to profitability in 2020,” said Marie Leblanc, chief executive officer of Victoria Beckham.
Losses in Victoria Beckham’s fashion business were actually down 5 percent to 11.9 million pounds from 12.5 million pounds in 2019. LeBlanc was referring specifically to the business’ adjusted earnings before interest, taxes, depreciation and amortization. That number fell to 4.6 million pounds in 2019 from 10.5 million pounds in 2018.
Leblanc added that “the unexpected impact of the COVID-19 pandemic changed the course of the last year, and it was the opportunity for us to re-strategize and concentrate on further future-proofing the business.”
Victoria Beckham’s business, which launched in 2008, is owned jointly by Beckham Brand Holdings Ltd.; XIX Entertainment, and the private equity firm NEO investment Partners, which invested 30 million pounds in 2017.
The company said in 2019, revenue growth came both from the fashion business and from the launch of the beauty brand in the last quarter of the year.
The beauty launch started incurring prelaunch costs from the fourth quarter of 2018, and dragged down the 2019 bottom line, but it contributed to additional revenue in the year, “in line with directors’ expectations.”
The company said all channels — online, in-store and wholesale — grew in 2019, with Beckham’s Dover Street flagship in London “performing strongly and achieving double-digit revenue growth.”
The company added that in fiscal 2020 the COVID-19 pandemic impacted trading, with the Dover Street store subject to lockdown restrictions.
Like other companies, Beckham saw e-commerce operations spike during lockdown, and the company added that with 50 million followers globally, Victoria Beckham’s social media platform has been “key to driving product sales.” In 2020, Beckham’s social media feeds drove 15 percent of total traffic to the brand’s website and 10 percent of revenue.
Victoria Beckham Beauty, which launched in October 2019, continued to perform strongly in 2020, the company said. VBB launched a mascara last week, which has seen record sales.
David Beckham’s company, DBVL, supports the former athlete’s personal brand and its strategic partners across all commercial and marketing activities. It is fully independent following the buyout of XIX Entertainment’s 33 percent stake in 2019.
In 2019, Beckham’s company notched a profit of 9 million pounds, down from 11.5 million pounds in the previous year, on revenue of 12.7 million pounds, compared with 9.9 million pounds in the previous year.
Beckham’s company has long-term strategic partnerships with global organizations including Adidas, Haig Club (Diageo), Tudor, Coty, insurance company AIA and the hotel group Sands.
In 2019, the company revealed the creation of DB Eyewear, in partnership with Safilo, and launched an integrated production company and creative agency called Studio 99, which has a range of projects in development for global platforms.
Kent & Curwen is still operating under Shandong, and Daniel Kearns continues to design the collection as group creative director of Trinity.
Beckham’s company said David’s social media platform has a global following of 128 million. In the U.K., it is the number-one most followed and engaged social media account and was the number-one most engaged launch in China of any international account on the new platform Douyin.