Update, Monday, April 20 at 8:49 a.m. ET: Victoria Beckham Confirms Furloughs to FN
In an emailed statement on Monday, a Victoria Beckham spokesperson confirmed to FN that the company has furloughed a portion of its workforce. “We are working hard to ensure our much-valued VB team are protected during this unsettled time by keeping our business healthy. Having carefully assessed all our options, we have made the decision to furlough a proportion of staff on an enhanced package,” the spokesperson said.
What we reported yesterday:
Victoria Beckham has reportedly furloughed a portion of its staff as the coronavirus pandemic continues to weigh on the fashion industry.
According to multiple reports, the London-based fashion label has sent letters to about 30 employees informing them that they will be furloughed under the British government’s furlough scheme.
Through the scheme, the government is paying 80% of employee salaries at coronavirus-impacted companies. Victoria Beckham will reportedly pay the remaining 20% of workers’ pay during this time through an “enhanced package.” The brand’s namesake founder and designer is said to be forfeiting her own salary during this time.
“We are working hard to ensure our much-valued Victoria Beckham team are protected during this unsettled time by keeping our business healthy,” a Victoria Beckham spokesperson told Mirror. A representative from the brand did not immediately reply to FN’s request for comment.
The Victoria Beckham brand has offices in New York and London, with a flagship store in London’s Mayfair neighborhood and a second store in central Hong Kong. While the London shop is shut, the label’s e-commerce site remains operational, along with its warehouse.
The brand, launched in 2008, has yet to post a profit. For the 2018 fiscal year, the most recent year for which numbers are available, Victoria Beckham reported a loss of 12.3 million pounds ($15.37 million). Sales fell by 16% to 35 million pounds ($43.74 million), as wholesale demand slid.
Brands across the luxury sector are preparing for a sizable dent in sales as the coronavirus causes discretionary spending cuts and forced store closures in North America and Europe. According to analyst reports, sales of high-end goods are set to decline this year by between 20% to 30%, fueled by sliding tourism and decreased millennial and Gen Z spending power.
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