Stella McCartney’s fashion brand reports increased losses as sales decline
Stella McCartney’s fashion empire has faced significant financial challenges, with pre-tax losses rising from £25 million in 2023 to £33.5 million in 2024, as sales dropped to their lowest level since 2009, reports BritPanorama.
Fresh accounts submitted to Companies House reveal a troubling trajectory for the company, with its turnover plummeting from £21.9 million to £16 million in 2024. This marks the brand’s weakest performance, reminiscent of a £14.6 million revenue recorded in 2009.
Financial difficulties stem from reduced profit sharing with its Italian arm, which saw contributions drop from £7.3 million in 2023 to £3 million. Royalty payments also decreased from £9.6 million to £7.4 million, although retail store sales showed slight growth, climbing from £4.9 million to £5.3 million.
Operating costs remained stable at £42 million in 2024, following a decline from £54 million in 2021 and £45 million in 2022. This consistency is juxtaposed against a backdrop of persistent losses, accumulating over £177 million since the brand last reported a pre-tax profit of £9 million in 2017.
In a statement approved by the board, the company asserted its commitment to sustainable luxury, stating: “As the fashion industry navigates its future, Stella McCartney remains committed to redefining luxury through impactful sustainable fashion and pioneering innovation.” The statement acknowledged that operating losses had increased from £23 million to £29 million, attributing this to challenging market conditions.
The firm’s financial woes come on the heels of McCartney’s recent acquisition of LVMH’s 49% stake in her brand, a move that shifts the long-standing relationship with the luxury conglomerate. McCartney will retain her advisory role with LVMH, continuing as a global ambassador on sustainability issues.
LVMH’s minority stake was first acquired in 2019 after McCartney purchased Kering’s 50% share in her label a year earlier. The designer, known as the daughter of Beatles’ Paul McCartney, has seen a fruitful partnership with Kering, which aided in launching her brand in 2001.
LVMH stands as the world’s largest luxury conglomerate, encompassing a diverse portfolio that includes brands like Givenchy, Celine, Fendi, and Dior, alongside renowned champagne labels Dom Pérignon and Krug.
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Stella McCartney’s financial performance highlights the ongoing pressures within the luxury fashion sector, which is adapting to shifting consumer expectations and economic challenges. As brands strive for sustainability, McCartney’s strategy to blend luxury with environmental responsibility may prove crucial in the future landscape of fashion.
