Fashion brand Stella McCartney is racing to cut costs after losses more than doubled to £25m.
Designer Stella McCartney’s eponymous brand has embarked on a turnaround push, led by Amandine Ohayon, who joined as chief executive in late 2023.
It said the overhaul will include cost cuts as it battles to return to sustainable growth.
The revival efforts come after Stella McCartney revealed that losses ballooned to £25m for the 2023 financial year, compared to £10m a year earlier.
It followed a period where the company said it was struck by “significant pressure” from inflation on materials and salaries. In the latest financial year, it recorded operating expenses of £42m. It spent £16m on wages over the year.
It also saw a slump in sales over the period, coming amid wider concerns over demand for luxury brands. The company said revenues were down at £22m in 2023 from £40m a year earlier.
Smaller British designer brands have been struggling in recent years after the end of tax free shopping in the UK.
In the latest accounts, Stella McCartney fired a warning shot over its finances, saying it would need further financing in 2028 even if its parent company Anin Star Holding Limited did not seek repayment on loans.
Directors said this represented a “material uncertainty that may cast significant doubt on the group’s ability to continue as a going concern in the long-term”.
They said the company had identified several contingency measures which could prolong the amount of cash it has. The said they may consider alternative sources of funding in future.
The signs of pressure at the British fashion brand come weeks after designer Ms McCartney revealed she had taken whole ownership of her eponymous company again.
In an announcement in January, Ms McCartney said she was buying back the minority stake that had been held by luxury giant LVMH. LVMH has held a 49pc stake in Anin Star Holding since 2019.
However, Ms McCartney said she was buying back the stake after five years of joint ownership. Neither company disclosed the size of the deal.
At the time, the two companies said: “This new chapter for Stella McCartney reflects her desire to write a new page in her story independently, after working closely with the group to strengthen the fundamentals and governance of her house.”
Stella McCartney did not immediately respond to requests for comment.
Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
