Stella McCartney’s luxury fashion brand plunges to £32million annual loss

Stella McCartney’s luxury fashion brand plunges to £32million annual loss forcing designer to go without £500,000 dividend she was owed

  • Brand loved by some celebrities has seen losses reach almost £32 million
  • Drop in money comes as dividend of £531,000 has still been paid to Stella
  • Last year the designer furloughed staff as the Covid-19 pandemic raged

Stella McCartney’s fashion brand has seen losses reach almost £32 million – and the company has still not paid her more than half a million pounds she was owed.

The drop was so big that accounts show that a dividend due to Stella, 49, two years ago of £531,000 has not been paid, although she was paid £2.4 million last year.

Figures in the accounts show sales were down from £42.5 million in 2018 to £38.2 million in 2019.

Rising costs and administrative costs meant the company made the loss of £32 million compared to a loss of £11 million the year before.

Stella McCartney’s fashion brand has seen losses reach almost £32 million in the past year 

Reese Witherspoon wearing Stella McCartney at the 69th Primetime Emmy Awards in 2017

Reese Witherspoon wearing Stella McCartney at the 69th Primetime Emmy Awards in 2017

The drop in sales occurred before the global pandemic and the company said recovery from from the lockdown would be gradual.

The company has a flagship store in Old Bond Street and Fulham Road, London, but also earns money through royalties on designs sold around the world as well as link-ups with other brands like Adidas and Kering Eyewear.

And the firm owned by Stella, daughter of Beatle Sir Paul McCartney, said in the report that the Covid crisis had badly hit the company.

The accounts papers said: “Our business was materially impacted by the Covid 19 outbreak and we expect the recovery in our sales levels over the medium term to be gradual. 

McCartney's shop in Mayfair, one of 51 stores selling her clothes around the world

McCartney’s shop in Mayfair, one of 51 stores selling her clothes around the world 

Stella’s stores around the world

Stella McCartney operates 51 freestanding stores (with 1,400 employees) in locations including:

  • Manhattan’s Soho
  • London’s Mayfair and Brompton Cross 
  • LA’s West Hollywood 
  • Paris’ Palais Royal 
  • Milan 
  • Tokyo 
  • Shanghai 
  • Beijing

Her collections are distributed in 77 countries through 863 doors including speciality shops, and department stores, as well as shipping to 100 countries online. 

Source: stellamccartney.com 

“Prior to the outbreak of Covid 19 we were making good progress in delivering against our strategy.”

The report added that online sales were good, but did not “fully offset the decrease in demand experienced during the period that the stores were closed.”

Regarding McCartney’s pay it said: “During the year payments were made to Stella McCartney of £2,440,555. The dividend declared to Stella McCartney in 2018 of £531,265 remains unpaid.”

Stella’s fashion brand is popular with a number of celebrities with Hollywood star Reese Witherspoon seen sporting one of her outfits in recent years. 

In April MailOnline told how the designer had furloughed hundreds of her staff and asked those who remained working to take a pay cut during the coronavirus crisis. 

Under Chancellor Rishi Sunak’s rescue package, firms can claim up to 80 per cent of wages to a maximum of £2,500.

Unlike Victoria Beckham who backtracked on furloughing 30 staff at her fashion company following criticism, Stella McCartney did not change its decision.

Mrs Beckham also planned on topping up the on furlough’s salaries an extra 20 per cent on top of the 80 per cent paid by the Government scheme, unlike Ms McCartney.

At the time, one employee said staff were ‘extremely hurt’ by the decision taken by McCartney.