Stella McCartney loss grows in major year of change

Stella McCartney has filed accounts for the year to the end of December 2021, and on the surface they showed revenues bouncing back from the pandemic with a 14% increase to £32.5 million.

However, the company has been going through a transformation programme since 2020, and it's difficult to draw a direct comparison given that the way revenue is recognised has changed in certain circumstances.

For instance, the transformation meant the revenue rise was led by “profit split income from group undertakings” of £12.2 million this time compared to just £2.1 million a year earlier.

Sales excluding transactions with fellow group companies were £16.1 million, down from £23.8 million in the previous 12 months.

The company also said that sales through physical stores rose 26% versus 2020 to £4.97 million. But sales through the company’s own webstore fell 78% to £2.3 million due to a change in the operating model, with e-commerce revenue now being recognised as part of Stella McCartney Italia SRL.

It also reported a loss before tax of £32.7 million, larger than the £31.4 million loss of the previous year. The net loss for the year was also £32.7 million against the net loss of £30.4 million in 2020.

As well as the basic transformation of the company, 2021 saw a lot of other change. This included the launched of the Frayme bag as part of the firm’s autumn 21 collection and the collab with Japanese artist Yoshitomo Nara, two examples of the" fashion elevation of the brand" that increased media impact during the year.

The business also doubled down on its sustainability commitment, and was a very visible participant at the COP 26 conference during the year, as well as helping in the development of the new fungi-based Mylo material.

It bought its digital ops in-house too (they’d previously been handled by Yoox Net-A-Porter), but shifted management of those revenues to the Italian arm of the business, as mentioned.

And the year saw the brand’s kidswear moving to a licensing model for the spring 22 collection with Simonetta Spa.

Clearly, the company is facing challenges, but it’s been full steam ahead on its reinvention and it appears well capitalised, while the shareholders remain committed to the business.

Those shareholders are led by McCartney herself. In 2019 she'd inked a partnership deal with Dior and Louis Vuitton owner LVMH, although she retained control of the company. In the previous year she’d split from previous backer Kering.

Stella McCartney loss grows in major year of change

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