Can Meghan SAVE Posh's troubled empire?
Victoria Beckham’s fashion empire is haemorrhaging cash. But as the Duchess adopts her clothes, friends and lifestyle . . .
The power of royal patronage can be enough to make — or even save — a brand. So there was something deeply loyal, and very timely, about the outfit chosen on Christmas Day by the Duchess of Sussex.
Attending the Royal Family’s traditional Sandringham church service, Meghan Markle stepped out head-to-toe in £6,000-worth of Victoria Beckham designs: an elegant calflength navy dress costing £1,250, with matching £2,250 coat, £1,250 boots and £1,550 handbag.
Of course, the main message of the day was that there is no rift between Meghan and the Duchess of Cambridge — and both women seemed to work hard to make that clear.
But another signal of support was being very loudly sent to her friend and country neighbour, Victoria.
And, with the news last week that Posh’s fashion empire is again in the red — posting losses of more than £10 million at Companies house — plus the report that husband David is no longer prepared to pump money into his wife’s venture, the Duchess’s decision to show her backing surely speaks volumes about their friendship.
Indeed, Meghan could even help Posh turn her fortunes around. And, as we see here, their links go deeper than you might think . . .
STYLE SISTERS WITH A BLOSSOMING FRIENDSHIP
VICTORIA has been a kindly and constant influence, growing ever closer to Meghan, 37. By the time that Meghan and Prince harry became engaged, she and Victoria were said to have ‘grown close’ and would ‘regularly text’.
Undoubtedly, a shared love of fashion connects the two women. Meghan admired Victoria’s clothes long before she even met harry. In 2013, the then-actress gave the Victoria Beckham label a boost when she wore one of her dresses to a gala event at the New York Film Festival.
Victoria has previously said that she never gives freebies, because she cannot afford it, so we must assume that Meghan paid for the dress — and for all her subsequent purchases.
Meghan also gave the designer her seal of approval by selecting a cashmere knit for one of her engagement portraits with harry.
early last year, it was being reported that their friendship had grown and that Meghan was in the habit of consulting Victoria about style. Vanity Fair reported: ‘They get along well and have been in touch recently. Meghan really likes Victoria’s style and was keen to pick her brains about pulling together a working wardrobe.’
Like Posh, Meghan naturally favours plain tailoring in neutral colours and both women hold the late actress Audrey hepburn as their ultimate style icon.
Victoria’s designs are a ‘natural fit’ for Meghan then, and — unlike her very expensive love of Dior and Givenchy — at least when she chooses to wear Victoria Beckham, she is buying British.
Victoria and Meghan also have friends in common, most notably fashion icon Olivia Palermo. Olivia, based in New York, has been close to Meghan for years — and Meghan calls Olivia her ‘style crush’.
Meanwhile, Palermo also loves Victoria Beckham and has been championing her designs for years — wearing her clothes in a magazine shoot in 2011 and hailing her ‘the queen of sleek’ in 2015.
DID MEGHAN CONFIDE ROYAL BABY SECRET?
The former Spice Girl is one of a handful of trusted celebrity friends who saw Meghan when she retreated from the limelight over the summer.
Soon after their May wedding, the former actress put down roots with harry in a rented house on the Great Tew estate in Oxfordshire — and saw Posh regularly at the Soho Farmhouse members’ club that neighbours both homes.
Victoria and her family are seen at the private club almost daily during the school holidays. Their converted barn is just across some fields. Indeed, the Beckhams are such a fixture that staff there even take their spaniel Olive for walks.
Sources indicate that Meghan and harry also made regular visits, arriving in an anonymous car. I’m told Meghan took exercise classes at the spa and that she and harry also popped in some evenings for private dinners in the ‘Shack’ —- a small building in a courtyard which was turned into a private VVIP dining area for the royal couple and their guests.
Meghan, at the time, was in the early stages of pregnancy and it seems to have suited her to mostly drop out of the limelight.
Was Posh one of the very few — apart from Meghan’s mother Doria Ragland and best friend Jessica Mulroney — who visited to advise her on her wardrobe for the Australia tour and to be let into the secret of her pregnancy?
Sources at Soho Farmhouse believe this is ‘highly likely’.
CAN SHE HELP LIFT POSH’S FORTUNES?
WITh the publication of her accounts last week — Victoria Beckham Limited (VBL) filed its 2017 accounts a couple of weeks late this year, meaning they only became available for viewing online at Companies house on Christmas Day — it would seem Mrs Beckham needs all the highprofile friends she can get.
For the figures show not only soaring losses, but operating costs rising on a rather breathtaking scale, too. While losses stand at £10.3 million, the good news is turnover was up to £41.7 million from £35.7 million the previous year. But the cost of sales — what the company spent in pursuit of that £ 41.7 million turnover — stands at £25.8 million.
That is a rise on the £19.5 million the previous year, which was described to me by one fashion expert as ‘out of control’.
One particularly expensive part of the empire is her enormous flagship store in Dover Street, in the heart of London’s Mayfair.
Fashion retail king Jeff Banks, who launched and ran high Street chain Warehouse, tells me: ‘That store in Dover Street seems like a white elephant.
‘The scale of it is excessive. There is very little product in there and I have never seen a customer inside when I have been past it.’
Banks adds that Posh’s costs are ‘eye-watering’. he says: ‘It’s clear the strategy is to keep on throwing money at the Victoria Beckham brand. Their costs seem to be out of control.’
In a statement, VBL said that it had been ‘investing for future growth and building its senior leadership team’.
The statement added that shareholders were committed to helping the brand break even in the medium term by cutting costs and driving growth.
Paolo Riva, who was announced as CeO in June, said: ‘We will continue to invest in growth markets such as the U.S. and Asia while also ensuring we have the right strategy to ensure profitability over the medium term.’
Unfortunately for Victoria Beckham, despite a wave of redundancies earlier in the year, her administrative expenses have actually gone up and stand at just over £25 million, compared with £23.8 million the previous year.
As you might expect, given the heavy costs, profits are elusive. her pre-tax loss is £10.3 million — up from £8.5 million in 2016 and £4.5 million in 2015. It means that losses have more than doubled in the space of three years. her reported operating loss is £ 9.97 million — again up from £ 8 . 2 million in 2016 and £ 4.5 million in 2015.
Last year, NeO Investment Partners pumped in £30 million. It now has a 30 per cent stake in the
firm and is said to be implementing ‘root and branch’ reforms via a new chairman who is based in Paris, Ralph Toledano, as well as CEO Riva.
HOW HUBBY DAVID PULLED THE PLUG
UnTil now, Victoria has been supported by the other parts of Brand Beckham that are making money. The 2017 accounts show money flowing into Victoria Beckham limited, with £6.8 million from Beckham Brand Holdings, given ‘in return for shares’ in the clothing company. And, once again, David’s firm DB Ventures is pumping money into its sister company, Victoria Beckham limited. notes to the accounts disclose that DB Ventures gave £4 million ‘pledged as security for a term loan’ for Victoria Beckham.
A further £6.62 million owed by Victoria Beckham limited was ‘ assigned to Beckham Brand Holdings limited’.
Alex DeGroote, an independent media analyst, said: ‘The question is whether there is a sustainable route to profit for the Victoria Beckham business.
‘How does this business turn a profit? There aren’t many businesses out there that can lose £10 million every year.
‘You can see from the accounts that the other parts of the Beckham empire are helping to support Victoria’s business.’ However, reports last weekend said that it would be the last time this happened.
it is understood that David Beckham now wants his wife to take full responsibility for running her company — and she has found investors who have injected £30 million into the label.
A source said: ‘David is super proud of what Victoria has achieved, but he will no longer be putting money in. She has investors now.’
FINDING INSPIRATION IN MEGHAN’S BLOG
A BOlD plan is in place to expand and diversify out of high fashion and into profit.
Victoria has ‘ sold her brand’ with a licensed collaboration for Reebok. She has also deigned to get involved in a second season of make-up in collaboration with Estee lauder.
And she has announced that she is going to try her luck at beating the beauty vloggers at their own game with a YouTube channel.
Perhaps she could take tips from Meghan, who, before she became the Duchess of Sussex, enjoyed nothing more than posting endless selfies sharing lifestyle and beauty tips on her nowdefunct blog, The Tig . . .