British luxury fashion brands hit the buffers

Gigi and Bella Hadid stole the show when they walked the Paris catwalk for the Stella McCartney fashion show late last year.

Against the extraordinary backdrop of the Center Pompidou, McCartney gushed about her guests, including father Paul and Bernard Arnault, the billionaire fashion mogul whose Louis Vuitton empire has backed her eponymous brand.

But behind this glitzy and expensive facade, both McCartney and Arnault were well aware that her empire was collapsing under the weight of massive losses that raised serious questions about the brand’s future.

Stella McCartney Ltd isn’t alone in a list of celebrated but endangered British fashion brands, with Victoria Beckham Ltd bleeding money, Alexa Chung’s Alpha Charlie crashing and Alice Temperley trying to stage a phoenix from the ashes.

With the economy spiraling downwards, British haute couture appears to be in an existential crisis.

Stella McCartney

Few British designers can boast a string of A-list friends like Stella Nina McCartney, but considering she was born into one of the world’s most famous families, this should come as no surprise.

Inspired by the unwavering ambition of parents Paul and Linda, vegan Stella has eschewed leather and fur at her label as she built her fashion empire, which she launched in 2001.

Backed initially by the Gucci Group, which later became Kering, McCartney bought them out and took full control of her empire in April 2018 on the back of impressive growth and profits.

This brought its own rewards for the 51-year-old who received £13.3 million in dividends, awards and perks in 2015 and 2016.

However, by the end of 2018, the company had lost £10 million and the following year McCartney signed a deal with fashion giant LVMH, giving the French company a 49 per cent stake in the British brand.

But LVMH’s commercial savvy hasn’t stopped the losses, which have accelerated, with £33m recorded for 2019 and £30m in the next Covid-hit year.

And accounts for 2021 filed just days ago reveal losses of £32.7m, bringing total losses to more than £100m in just four years.

But this didn’t stop McCartney from taking home £2.3 million, meaning she received £10 million in wages and perks over the same period.

What investors think of this generosity remains to be seen, but McCartney seems determined to keep her foot firmly on the accelerator when it comes to her own profile.

Last year, she branched out by fronting the glossy advertising campaign for Audi’s new all-electric car.

Investors hope her fashion brand hits a new gear sooner rather than later.

Alice Temperley

When Alice Temperley announced last January that she planned to take her son to Sri Lanka to be “immersed in a different culture,” the creditors of her fallen empire were unlikely to be impressed.

Just a month before it was revealed that her fashion brand Temperley London, a favorite of the new Princess of Wales, owed £31 million when it went into administration in April 2021.

Temperley simply formed a new company using a pre-pack deal to buy back the best assets, allowing her to continue selling her signature flowing, sequined dresses and velvet suits, which have drawn a long list of admirers.

Her ability to combine classic English country style with sharp modern designs attracted the likes of Kim Kardashian, Madonna and Halle Berry.

But it was when Sarah played Jessica Parker Temperley on Sex And The City that her profile went viral.

Unveiled at Kate and William’s wedding reception, Temperley’s iconic green dress helped earn the wearer Pippa Middleton the nickname “Her Royal Hotness” and cemented the designer’s reputation as the “English Ralph Lauren.”

The publicity was aided by the 47-year-old Temperley’s lavish parties, held in the grounds of Somerset’s Cricket Court, her impressive monumental folly, drawing a bohemian and blue-blooded crowd.

While the Temperley administrators cited Covid for the fashion company’s plight, in reality the brand was losing money long before the pandemic.

Accounts released last month for its new operating company TMLL show it lost £2.3m in 2021. It remains to be seen whether the Temperley 2.0 will fare better.

Victoria Beckham

While David Beckham was in Qatar for the World Cup and made £150 million as the country’s ambassador, Victoria was in no position to bury her head in the sand at her struggling fashion empire.

Accumulated losses at Victoria Beckham Holdings, which owns its fashion line and manages its beauty range, already exceed £66m and the immediate outlook looks mixed at best.

Significantly, the auditors warn in the latest financial statements that there is ‘considerable doubt’ about the future for 2021, despite a flurry of publicity surrounding double-digit growth and a bright future.

Losses amounted to £5 million for 2021, compared to the £8 million in the first year of the pandemic, but David’s business acumen was so good that they were still able to award themselves a £8 million dividend from their joint company.

After saying goodbye to her pop career, Beckham took time off before launching her eponymous fashion house in 2008, despite having no formal education.

Her first collection, unveiled to a skeptical audience at New York’s Waldorf hotel, was hailed by Vogue as her ticket to fashion’s “major class.”

The 48-year-old former Spice Girl said: “I would never become the best singer in the world, but I hope I can become a good designer.”

She proved to live up to her word and won the award for best brand at the British Fashion Awards in 2011 and 2014.

Fashion designer Antonio Berardi said Beckham’s new fashion empire was “her voice in its purest form right now.” But it seems that despite her best efforts, Beckham is still hitting all the wrong notes when it comes to profitability.

Alexa Chung

With a Mulberry bag named after her, model and presenter Alexa Chung seemed like a natural fashion queen when she launched her own label in 2017.

She said, “This is a moment in my life when I felt I could focus all my attention in one direction. I’m young enough and confident enough to think I could do it.’

The 39-year-old’s optimism initially seemed justified with Selfridges, Liberty and Net-a-Porter, among others, wanting a piece of her company Alpha Charlie, which was behind the trade name Alexa Chung.

But five years later, Chung announced she was “winding down” Alpha Charlie, stating in March that “the past few years have been challenging for small independent businesses and ours is no exception.”

However, the company was already in trouble at the start of the first lockdown, with a total loss of £9.7m for the year to March 2020, despite repeated share issues.

The latest batch of accounts released in October, covering the company until March 2022, show accumulated losses that now stand at £12.4 million.

The company’s financial notes state that “executives have decided to take a break to review strategy and assess the company’s future.”

However, Chung seems undeterred by the experience, saying, “My enthusiasm for fashion remains undiminished.”