Luxury fashion brand Stella McCartney has plunged into the red with a 219% drop in operating profits for the year to 31 December 2018 – equating to an operating loss of £10.8m.
The previous year the business had made an operating profit of £9.1m – but profits were wiped out as costs soared. Many of these resulted from a corporate reorganisation which saw McCartney buy out luxury goods conglomerate Kering’s stake in the business.
Despite the operating loss, sales were broadly flat, up 0.2% year on year to £42.6m. In the year since the results, the business entered into a partnership with luxury group LVMH. McCartney will retain creative control and a majority of shares, but LVMH will assist in the development of the business and its strategy.
The brand has become known for its pioneering sustainability work in recent years, and designer McCartney is a leading figure in the campaign to create a more eco-friendly, ethical fashion system.