Victoria Beckham’s fashion business is cutting up to 60 staff positions after a board review showed its current operating model to be unsustainable. According to reports in UK newspapers the company has been operating at a loss, it was reportedly in the red by £8.5 million last year. The information is based upon analysis by a management consulting firm for Beckham’s new financial backers, Neo Investment Partners.
Victoria Beckham has grown organically without the involvement of outside investors in the past. In 2015 Victoria Beckham received one of fashion’s highest accolades: a nomination for the prestigious Womenswear Designer of the Year award at the British Fashion Awards, which she won.
However, the fashion mogul recently took on outside investors and the cash infusion from Neo and the recent arrival of Ralph Toledano as chairman meant the self-made designer would need to take on a different business model.
Many in the press focus on the more negative side of the new strategy but the operational structure had been dubbed as “unfeasible” in its existing form. The 60 job losses reportedly represent around a third of the total workforce.
The Daily Mail UK reported that Beckham, who earns £0.7 million from the business, has upset her staff because she didn’t deliver the restructuring news in person.
The company, VB Ltd, is based in Battersea, South London and has shops in London’s West End and in Hong Kong.
A Beckham spokesperson told the newspaper: “The board has been focusing on returning the company to profitability. The structure is being reviewed to the right size, in line with its financial targets, in consultation with its staff.”