The financial troubles dogging Stella McCartney's fashion label appear to be worsening, after the company posted operating losses of £4.5 million. The figures represent a 67 per cent rise on her first year losses of £2.7 million. Sales for the year ending January 31, 2003 were just £434,000.
In 2001 Gucci paid Stella £6 million for a controlling stake in her company, which has stores in London and Hollywood.
So far there has been little return on the investment, however, and last year the Italian fashion house injected £3.2 million to help cover its losses. The money was needed "to enable the company to pay its liabilities as they fall due," said a statement from Gucci's board of directors.
Fashion pundit Nicola Wood has suggested that Stella's constant experimentation may be to blame for the worrying results. "Her signature was sexy femininity but she's always changing her handwriting and that can be off-putting for customers," she said. "She is also quite expensive compared to other designers and that's difficult to sustain at a time when the luxury market is struggling."
Gucci Chief Executive Dominic De Sole has put a brave face on the latest figures, however, insisting that they are "in line with expectations, based on an agreed business plan".
Photo: © Alphapress.com
