Stella McCartney's robust revenues minimise losses

Stella McCartney, the sustainable luxury fashion pioneer that launched in 2001, has revealed that despite struggles to break even, revenues spiked to £40 million.

For the year ending 31 December 2022, revenues were up by 23% increase from 2021.

Breaking down revenues saw the brand boosted by profit sharing with Stella McCartney Italia SRL, which amounted to £22.8 million and comprised 57% of the total revenue.

Royalties reached £10.7 million, which comprised 27% of the revenues, benefiting from £3 million additional revenues from the Kids licence. Meanwhile, brick-and-mortar sales amounted to £6.3 million, which comprised 16% of the revenues.

However, the British house remains small against luxury giants and still isn't profitable. Thanks to boosted revenues, operating losses decreased from £30.3 million in 2021 to £8.7 million in 2022, "confirming the trajectory towards break-even".

This was thanks to a "significant improvement of gross margin driven by adjustment in business formula and by a decrease in operating expenses by 17%". The pre-tax and net losses were £10 million compared to £32.7 million a year earlier. Similarly, luxury fashion competitor Victoria Beckham faced the same struggles as Stella McCartney and only escaped the red in 2022.

In 2022, the company continued its refreshed strategy, which was set into motion in 2020. It aims to remain rooted in its strong fashion and sustainability values while elevating its offering with new products. For example, last month, Stella McCartney launched a festive-themed retail pop-up installation at the Selfridges Corner Shop concept, to bring attention to its sustainable practices.

The company also renewed its long-standing collaboration with Adidas and launched skincare in August of that year, "as a responsible alternative to the luxury skincare market". This may be the key to boosting revenues further, similar to Victoria Beckham's beauty line, bringing out of the black and into the red.