LONDON — Victoria Beckham Ltd. has had a change of heart and will turn down emergency aid from the British government, paying furloughed employees out of the company’s coffers.
The company had placed more than 30 employees, or about 25 percent of its workforce, on furlough after the government announced a series of lockdown measures for businesses last month.
As part of its package to keep the economy afloat, the government had promised to pay up to 80 percent of salaried workers’ monthly wages for a maximum of 2,500 pounds, if employers promised not to lay people off.
VBL had initially applied for the furlough funding and immediately drew the ire of the British press, which savaged Beckham and her company over the decision. Papers including The Daily Mail pointed out that she is a multimillionaire and should not be taking government money.
A VBL spokesperson said Thursday that the company has been working hard to protect its people during the pandemic, “and, while adjusting to the impact of COVID-19 and the government lockdown, our decision to furlough a small number of our staff seemed the most appropriate option in keeping with many other businesses.”
The spokesperson described the current situation as dynamic and said that “with the support of our shareholders, we now believe we can navigate through this crisis without drawing from the government furlough scheme. Our application was made in the best interest of trying to protect our staff, and that is still our absolute focus. We are doing everything we can to ensure we can achieve that without using government assistance.”
According to the U.K. Office of National Statistics, 66 percent of British firms have so far sought government funding, with 3.8 million workers furloughed so far since the start of the coronavirus outbreak in the U.K. last month.
The furlough scheme is due to run until the end of June and is part of a wider government aid package worth 350 billion pounds to help the U.K. economy. A variety of large and small businesses across all sectors have applied for the government money, although only a fraction of those companies have received it so far.
As reported last week, Burberry has rejected the British government’s help in the wake of the coronavirus, vowing to maintain base pay for all employees unable to work remotely, and slashing top bosses’ salaries by 20 percent for the April-to-June period.
VBL also made its decision against a backdrop of optimism: The company’s Italian factories have begun to reopen, and the company itself plans to be back at work full-time as of mid-May.
The brand’s e-commerce channel has also been performing well during the lockdown, which is no surprise as it has been a priority for the business. Victoria Beckham herself putting the focus on the direct-to-consumer channel, customer events and engagement.
In September, she launched Victoria Beckham Beauty, a collection of color cosmetics with environmentally friendly ingredients and packaging, as a direct-to-consumer business. It is available at Beckham’s London store on Dover Street, and via the brand’s web site.
Beckham described the launch as “giving birth to my fifth child,” and said the brand endeavors to use the smallest amount of plastic possible. The brand aims to provide full transparency on each ingredient used, and clarifies which products are vegan-friendly.
Beckham said the direct-to-consumer works for the business, all round, and for beauty in particular.
“It is a way that I can communicate directly with my customers through my different social platforms and really have fun. It also makes it easier for the customer as well. She can go online and get her product really quickly. So it is really making shopping easy. If the customer wants to see it, they can go to my store and play with it and have fun,” said Beckham in an interview last September.
The business has also undergone some major management changes over the past few months, with Marie Leblanc de Reynies named chief executive officer last September. She succeeded Paolo Riva, who left the company in July for personal reasons after 10 months on the job. Ralph Toledano is chairman of the company.
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.