LONDON — Victoria Beckham Holdings, owner of the fashion label and beauty company, saw a modest decline in turnover and a narrowing of losses in fiscal 2020.
According to accounts filed this week at Companies House, the official register of U.K. businesses, turnover fell 6 percent to 36.1 million pounds in the 12 months to Dec. 31, 2020, while losses after taxes nearly halved to 8.6 million pounds from 16.6 million pounds.
The company said strong online sales and a full year of trading for Victoria Beckham Beauty helped to prop up overall sales, which declined due to the pandemic and a series of lockdowns worldwide.
The holding company has an 85 percent stake in Victoria Beckham Beauty, which delivered 7.3 million pounds in sales in its first full year of trading, up from 1.9 million pounds in 2019.
The company said “several successful beauty launches” in the year had helped to establish the brand as “the best in class in clean, luxury beauty and skin care.”
Losses declined in 2020 due to the group’s “rapid response” to the effects of the pandemic, according to the Companies House statement.
The company said it controlled its cash and expenditure, which led to a 57 percent reduction in its operating losses to 6.8 million pounds. It added that cost efficiencies across the business and the recalibration of its business model will make the company “sustainable for the longer-term.”
Cost discipline and the successful implementation of a new business model resulted in a 22 percent reduction in the cost base year-over-year, the company said. The fashion business tightened costs linked to fabrics and samples, as well as freight costs. IT contracts were also reduced.
Gross margins rose to 61 percent from 58 percent, due to tighter supply chain management; revenue shifting toward fast-growing direct-to-consumer channels, and the implementation of the new business model.
No dividends were paid in fiscal 2020. Financial results for David Beckham’s business will be filed separately in the new year.
As reported, Victoria Beckham has consolidated her fashion offer under a single Victoria Beckham label.
Beckham and her chief executive officer Marie Leblanc de Reynies told WWD in an exclusive interview in June that under the new strategy, the Victoria Victoria Beckham and mainline collections had been blended, with a new average price point of around 550 pounds, compared with the 900 pounds of the old mainline collection.
The two said they had worked hard on sourcing, supply chain and manufacturing to ensure that the quality of the collection remained the same. The plan is to relaunch footwear and leather goods under the new brand and pricing structure, too.
The new-look Victoria Beckham collection made its debut with the pre-spring 2022 collection. Going forward, Beckham said she plans to showcase four collections a year, following the seasonal calendar. The overall offer, in terms of stock keeping units, is down by about 30 to 35 percent.
Asked during the June interview about when the brand could expect to become profitable, Leblanc de Reynies didn’t give a timeframe, but said the changes the company has been making “are setting the business up” for profitability. “As a team, we’re proud of our progress,” she said.
The company had been on track to profitability before the pandemic struck, and had begun consolidating in early 2020, setting out a new structure and vision aimed at making it a leaner and more efficient machine, reducing skus and putting an even bigger focus on digital, direct-to-consumer sales.
The company worked on adding more denim, jersey, shirting and casualwear. As a result of the restructuring, less than 20 percent of the workforce, or around 20 jobs, were lost.
In the latest Companies House statement, Victoria Beckham Holdings said the COVID-19 pandemic continued to impact trading in 2021, although e-commerce operations saw positive year-over-year growth.
The group said it has been ensuring “tight management of its cash,” and has further benefited from shareholders’ cash injections in 2021 of 600,000 pounds. Shareholders include Neo Investment Partners, and David and Victoria Beckham.
The company added that the repositioned collection under the single Victoria Beckham banner had been “warmly received,” resulting in “very strong double-digit growth in orders” compared with the previous year.
The beauty business continues to launch new lines in skin care and makeup, including the “Posh” range of lipstick.