Victoria Beckham's fashion brand is suffering, receives £6.2M loan
What's the story
Victoria Beckham's fashion brand has received a £6.2 million loan from its shareholders, including the ex-Spice Girl and her husband David Beckham, as well as private equity firm Neo. This comes despite a surge in sales last year and the company's fourth consecutive year of growth, with sales rising by 26.5% to £112.7 million in 2024. The loan was advanced amid "material uncertainties which may cast significant doubt over the group and company's ability to continue as a going concern."
Financial challenges
Loan required to extend bank loan
The loan was required to extend a £4.1 million bank loan that is due for repayment next week, reported the Guardian. The company's pre-tax losses have widened to £4.8 million from £2.9 million in 2023, necessitating this financial support. A loan extension is expected to be signed later this week.
Additional funding
Previous £6.9 million cash injection last year
This new loan comes on top of a previous injection of £6.9 million in cash and loans from shareholders last year. These funds were intended to sustain the group's growth plans, drive cost reductions, and streamline operations for the long term. Shareholders also include former Spice Girls manager Simon Fuller, Neo, and the Beckhams themselves.
Future plans
Plans for expansion and operational streamlining
The company has outlined plans to expand its presence in more department stores across the UK and France. It also aims to streamline operations and create a sustainable model for the future. The brand is expected to get a boost from the upcoming release of Victoria's Netflix docuseries, which will showcase this year's Spring/Summer Paris Fashion Week show.
Wealth status
Beckhams's financial status amid brand struggles
Despite the ongoing losses at Victoria Beckham Ltd, the Beckhams remain financially secure with a combined net worth of £500 million. David has reportedly earned £28 million in dividends from his personal brand empire since 2022, which has helped offset losses at his TV production studio. He sold a 55% stake in his businesses to Authentic Brands for £200 million in 2022.