Browse all

Stella McCartney declares losses of 36 million euros

It is unclear, however, whether the designer gave up her salary

Stella McCartney declares losses of 36 million euros  It is unclear, however, whether the designer gave up her salary

Last January 6, Stella McCartney presented its financial statement for the fiscal year 2021 revealing that its brand posted losses of 32.7 million pounds, just over 36 million euros, on sales of 32.5 million pounds. Annual sales increased 14 percent, while after-tax losses increased 4.3 percent from the previous year. According to the paper, no dividends were paid. According to BoF, this is the third year in a row in which the brand reports losses exceeding thirty million (the Daily Mail adds that counting the four years prior to this one, total losses total around £100 million) while, according to the statement, the brand also received a £98 million loan from its parent company, Anin Star. No dividends were also paid to investors in 2021. Here a discrepancy then intervenes: WWD says that Stella McCartney herself gave up her salary, the Daily Mail claims the opposite, talking about a salary of 2.3 million pounds. In fact, on page 24 of the report, it notes that the salary of the brand's directors (including McCartney) amounted to £2.3 million. Only two of the four directors received remuneration though, but considering that last September 16 two of the four retired it is not clear who received the money - according to the Daily Mail it would be McCartney herself but the document does not explicitly specify this.

The data, one does not need an economics degree to understand this, are not at all rosy. The situation of McCartney, who has nevertheless retained her personal cultural relevance over the years by collaborating with Bernard Arnault and King Charles III on very high-profile sustainability projects, is somewhat reminiscent of that of Victoria Beckham, another British brand that was found to have debts of 66 million pounds despite a growth in sales that could not erase losses due to the pandemic. It always remains curious in the fashion world how a brand can report multimillion-dollar losses for four consecutive years. And while analysts have been unbalanced in Beckham's case, talking about «significant doubt» on the survival of the brand, in the one related to Stella McCartney's business we read that «The shareholders have indicated their willingness and intention to continue to make available such funds as are needed by the Company during the period covered by the forecasts. The Directors acknowledge that there can be no certainty that this support will continue, however at the date of approval of these financial statements, they have no reason to believe that it will not do so». Surely, thanks in part to the fact that LVMH is among the aforementioned investors, Stella McCartney will not disappear from the map anytime soon.