Stella McCartney reports £11m loss

Fashion retailer Stella McCartney has reported an £11m loss in pre-tax profit for its full-year results, attributed to flat sales and a significant increase to its costs.

For the year ended 31 December 2018, the British fashion brand reported a 219% decrease in operating profit to £10.8m compared with £9.1m in 2017, according to documents published on Companies House.

The label also reported a 0.2% increase in sales, and has attributed the loss to a 67% increase in administrative expenses, compared with 2% in 2017. This was driven by its Blue Sapphire project and an increase in store expenses including at its new Old Bond Street store.

Expenses were also incurred when Stella McCartney decided to buyout luxury group Kering’s 50% stake in the company.

The outstanding loan for £15.04m with Kering UK was fully repaid on 15 July 2019, and refinanced through the immediate parent company, Anin Star Holding Limited, following its acquisition of 100% of the issued share capital of Stella McCartney.

Stella McCartney also launched a partnership with Louis Vuitton owner LVMH.

In a statement, the company said: “On 15 July 2019, Stella McCartney and LVMH reached an agreement to further develop the Stella McCartney House. Ms McCartney will continue as creative director and ambassador of the brand, while holding majority ownership via the ultimate parent company.

“The goal of this partnership will be for the Stella McCartney House to accelerate its worldwide development in terms of business and strategy, while of course remaining faithful to its long-lasting commitment to sustainable and ethical luxury fashion.”

The company added that, in 2019, its priority was to continue “operations seamlessly” under its new ownership structure as well as “strengthening” its product offering.