- Don-Alvin Adegeest |
Victoria Beckham Ltd is to cut 20 percent of its workforce and reduce the number of annual collections it produces, as it faces drastic cost cutting measures in the wake Covid-19.
The company said approximately 20 staff members would be made redundant, mostly workers in the areas of production at the company’s London headquarters.
Victoria Beckham is yet to make a profit
Since launching in 2008, the brand is yet to make a profit, posting a loss of 12.3 million pounds in 2018. At the start of the lockdown the company applied to furlough 30 employees, a move which was later retracted after an online backlash ensued due to the owner’s personal wealth.
Challenging retail landscape
Confirming the redundancies, a spokesman for Mrs Beckham said in a statement: ‘Like so many businesses, a challenging retail landscape coupled with the unforeseen effects of the coronavirus pandemic, has adversely impacted the Victoria Beckham business.
‘As a response, we have built a new strategic vision to streamline and future-proof the brand and, very sadly, have to make a number of redundancies to deliver this.’
On her u-turn decision to not accept government support, Beckham told the Guardian: ‘At the beginning of the lockdown the shareholders agreed with senior management to furlough a small proportion of staff. At that point we didn’t know how long the lockdown might last or its likely impact on the business. ‘The welfare of my team and our business means everything to me.’
Beckham is renowned for her sharp tailoring and staple of high-end dresses, two clothing categories that have seen a decline in demand since the onset of the pandemic when office attire was replaced with a working from home wardrobe.
Data from Edited shows consumer interest remains high in essentials like loungewear and activewear, two categories Victoria Beckham does not cater to.
The brand’s brick and mortar boutique remained closed during lockdown but has since suffered a similar decline in footfall. Stores in England were met with queues reopening on June 15th, but physical retail hasn’t yet rebounded with UK footfall reportedly falling 57.2 percent YoY according to ShopperTrak.
Additionally, new research from Meepl states one in five UK shoppers said will not shop in-store, while over two-thirds of UK consumers will only return if strict hygiene and social distancing measures are maintained.
Beckham is not the only the British fashion brand facing redundancies and cost-cutting measures. Fashion business across the board have experienced losses from production challenges, late deliveries, cancelled orders and closed stores.
The British Fashion Council in March launched a 1 million pound fashion fund for the impact of Covid-19, which saw 37 brands receive financial support of up to 50,000 pounds each. A second fund for August has just been announced for a total of 500,000 pounds allocated to support creative fashion businesses and individuals to survive the Covid-19 crisis. Every time a milestone of 500,000 pounds is reached a new round of applications will be launched.
Sadly, this amount is unlikely to be sufficient to bail out Beckham.
Image courtesy Victoria Beckham