Stella McCartney annual losses widen amid luxury market pressures

Sales at Stella McCartney’s fashion label dropped by more than a quarter last year, raising concerns about its financial future.

According to accounts filed at Companies House, pre-tax losses widened to £33.6 million in 2024, up from £25 million the previous year, while sales dropped 27%, falling to £16 million.

This latest loss comes after reports suggested that the brand’s directors warned the company could run out of cash by 2028 unless additional funding is secured. The label has not made a pre-tax profit since 2017.

Sales in the UK and in its own stores rose, according to The Guardian, but this was offset by declines in royalty and wholesale income, which contributed to the overall sales downturn.

The directors attributed the drop in sales to "challenging market conditions", a sentiment echoed by many luxury brands last year.

The broader luxury sector faced struggles as inflationary pressures and shifting consumer behaviour led to reduced spending.

Meanwhile, some British brands, including Burberry, cited the UK Government’s decision to end tax breaks for tourists as a factor in their weaker performance.

The news comes after McCartney bought back a 49% stake in her eponymous brand in January this year, which had been controlled by luxury conglomerate LVMH. The deal reflected "her desire to write a new page in her story independently", according to a joint statement from LVMH and McCartney at the time.

Stella McCartney also appointed Tom Mendenhall as CEO in September, ushering in a new era for the British luxury house. He took over from Amandine Ohayon, who stepped down after nearly two years in the role.

Looking ahead, the company said it will continue to focus on implementing product and communication strategies in order to "nourish" brand desirability and vision to drive sales, while right-sizing its operating cost base and optimising gross margin.