David and Victoria Beckham paid themselves almost £21m from their sports and media business since 2019, even as their fashion empire suffered growing losses and a breach of financial covenants after being hit by the pandemic.
Pre-tax profit at David Beckham Ventures Limited, the global brand management company wholly owned by the multimillionaire former footballer and his fashion designer wife, shrank to £11.3m in 2019, from £14.8m the year before. This reflected increased costs to help expand the business and adverse currency effects, as well as charitable donations.
The company’s two shareholders nonetheless received a dividend of £14.5m, up from £11.1m in 2018. A further £7m was paid out to the celebrity pair in 2020, it said.
The Beckhams in 2019 bought out the 33 per cent stake owned in DBVL by XIX Entertainment, the media group run by music entrepreneur Simon Fuller, although Mr Fuller retained a stake in Victoria Beckham’s fashion business.
Revenue increased £600,000 to £16.2m, boosted by new licensing and brand partnership deals. DBVL controls the David Beckham brand and its partnerships across commercial and marketing activities, including with Adidas, Diageo, Tudor, Coty, AIA and hotel group Sands. The company owns a range of DB Eyewear and a stake in new Major League Soccer team Inter Miami FC. Accounts for the year ending December 2019 are due to be published at Companies House.
Meanwhile, pre-tax losses at Victoria Beckham’s separate eponymous luxury fashion business widened to £16.5m, from £12.4m last year. Launched in 2008, Victoria Beckham Holdings Limited is owned by the Beckhams, XIX Entertainment, and NEO investment Partners, a private equity firm.
The group said last year it breached the financial covenants of a loan with HSBC, which led to a shareholder cash injection of £9.2m to settle the debt. This was on top of £15.8m from shareholders to finance working capital and reduce an HSBC loan facility in 2019.
The company said that it had launched “an extensive cost-cutting programme” to help navigate the pandemic and restructuring in September had streamlined operations.
Victoria Beckham was forced to reverse a decision to furlough 30 staff members at her fashion label last year after public criticism.
Sales rose 7 per cent to £38.3m on the back of continued growth in the lossmaking fashion business and the launch of the Victoria Beckham Beauty brand in the final quarter of 2019.
The fashion business halved its loss on an adjusted earnings basis to £4.6m in 2019, compared with a £10.5m loss the year before.
The Covid-19 pandemic and lockdown restrictions — after its financial reporting period — have led to its closing its London’s Dover Street store and will be a hit to its revenues.
Online sales, however, have risen more than a fifth in the UK from a year earlier. Internationally the brand has increased sales by more than a third in Europe and 44 per cent in Australia.