Gwyneth Paltrow better watch her back. Victoria Beckham, also known as Posh Spice, is stepping into the lifestyle and health brand arena in the U.S. This shift is not just a new venture; it's a strategic move to position Beckham as a direct competitor to Paltrow's $250 million Goop empire. Trademarked as "Victoria Beckham" and "VB," this brand aims to carve out a niche that may appeal to fans of both celebrities. Paltrow's Goop, launched in 2008, gained notoriety for its lavish products, including $900 t-shirts and uniquely scented candles. However, Beckham's approach is expected to be more refined and less provocative.
Facing significant financial challenges, this new brand could serve as a crucial lifeline for Victoria Beckham's fashion empire. Since 2016, her company has reported losses totaling $53 million, a concerning trend that has persisted despite attempts at restructuring. In 2017, a Luxembourg-based firm invested $38 million for a 28% stake, indicating that investors see potential in Beckham’s brand despite its struggles. Control over the company remains largely with Beckham and her husband, David, who hold 48.4% of the shares, while Simon Fuller owns 23.6%. With a history of losses, and her husband's own business facing challenges, the stakes are high for Victoria Beckham to make this new venture a success.
The financial landscape for Beckham’s fashion brand has been tumultuous. Revenue declined from $53.4 million in 2017 to $45 million in 2019, and losses have soared to $53 million. Multiple breaches of a $12.5 million loan agreement with HSBC have further complicated her situation. However, the infusion of $37.7 million in new financing has allowed for the hiring of new executives, aiming to revitalize the brand. David Beckham's willingness to invest additional funds reflects his commitment to the success of both their brands, but with high-priced items like $11,000 coats, a careful balance must be struck to appeal to today's consumers.
