LONDON — London fashion brands and retailers are taking stock of operations in the aftermath of COVID-19, resizing their businesses to cope with lower demand, slashing salaries and reducing head counts, and Victoria Beckham is the latest to join the fray.
The brand has emerged from lockdown with a new structure and vision aimed at making it a leaner and more efficient machine, WWD has learned. To wit, the company plans to reduce the number of sku’s by 30 to 40 percent and to show one collection a season for the signature line, and for the lower-priced, contemporary Victoria Victoria Beckham line.
The main Victoria Beckham collection will show in February and September and, starting in 2021, the plan is to sell those collections to stores in January and July in order to get the merchandise onto the shop floor more quickly, and to maximize the length of time it can sell at full price.
Having seen strong numbers come through during lockdown, the company wants to put an even bigger focus on digital, direct-to-consumer sales, and to ensure the main collection offers a 360-degree wardrobe. There are plans to add more denim, jersey, shirting and casual wear, and as a result of those additions, average selling prices of the main line collection will be reduced.
The brand wants the customer to be able to buy a full wardrobe, rather than pieces, from the main Victoria Beckham collection. As a result of the restructuring, less than 20 percent of the workforce, or around 20 jobs, will be lost.
Beckham and Marie Leblanc, the company’s chief executive officer, are understood to have informed the teams of the changes in person on Wednesday.
Beckham, whose title is founder and creative director, told WWD she “strongly believes the vision we have created will confidently take the business forward. My priority is continuing to respond to the evolving needs of our community and inspiring women to be the best version of themselves.”
“When we were in lockdown, it was a great time to look at the business and the strategy. I really enjoyed brainstorming with my team, and my board, about what the future looks like. The whole industry is changing.”
There remain myriad questions over global fashion weeks and how they will be structured going forward given the global pandemic, with many brands opting not to show at all, to mix digital and physical shows or, in a few cases, sticking with the traditional runway format but with a much smaller audience. Beckham said she wanted to return to an intimate presentation format — which is how she started in New York.
“I really enjoyed that — talking about the collection, and people being able to see it. I love doing a big show — it’s still the best way to see fashion. But a big show in September is not an option for us. And we’re also talking about how we’re communicating through digital, and to our community.”
Leblanc said she is confident the renewed strategy “will future-proof our business and enhance our creative approach while addressing the current industry challenges. Our new vision has taken much planning, and focuses our energy on delivering considered, desirable fashion when and where the customer needs it. It has always been central to our brand to offer a sharp, curated point of view and this makes even more sense today.”
Beckham’s Dover Street flagship in London will remain open, and wholesale sales will remain an important part of the mix. It is understood the focus going forward will be on the bigger accounts.
As reported earlier this week, Victoria Beckham Beauty broke into the Chinese market, opening a flagship on Alibaba’s Tmall Global and telegraphing its “clean beauty” message to a fast-growing market for skin care and color cosmetics.
Beckham herself led the marketing efforts via a livestream Q&A session with Viya, one of China’s biggest influencers.
It is understood the overall Victoria Beckham business was on the path to profitability before the coronavirus struck, as it had already made some staffing and structural changes aimed at tightening operations.
According to Companies House, the official register of U.K. businesses, Victoria Beckham’s brand saw revenues in fiscal 2018 drop to 35 million pounds from 41.7 million pounds, primarily because wholesale sales were down internationally. Losses widened to 12.3 million pounds from 10.3 million pounds in the previous year.
In 2017, Neo Investment Partners took a 30 million-pound minority stake in Victoria Beckham Ltd., which at the time was valued at 100 million pounds.
Fellow British fashion brands Stella McCartney, Burberry and Mulberry and retailers Harrods, Harvey Nichols and Selfridges, have all been forced to set, or accelerate, restructuring plans and lay off staff due to a decline in demand as a result of quarantines, a drop in international tourism, consumers’ fears about spending in a shrinking economy and a switch from physical to online retail.