Victoria Beckham to make 60 staff redundant following investment from Neo

Victoria Beckham is being obliged to let go a third of the workforce (around 60 jobs) at her luxury fashion brand as its new investors seek to "right size" the business and return it to profitability.

According to a report on the Daily Mail website over the Easter weekend, Neo Investment Partners, who at the end of last year invested £30m into the loss-making business, has said the current business model is "unfeasible".

In its latest available set of accounts to 31 December 2016 the Victoria Beckham brand recorded pre-tax losses of £8.5m on sales of £36.4m. However the brand is said to have achieved a double-digit increase in sales for the first half of 2017, though accounts for 2017 are not yet available.

A spokesperson on behalf of Beckham confirmed the redundancies to the Daily Mail, saying: "The board has been focusing on returning the company to profitability. The structure is being reviewed to the right size, in line with its financial targets, in consultation with its staff."

However the article also quotes an unnamed source saying staff were angry that Beckham, who founded the brand 10 years ago, was not present when the redundancies were announced and continued to pay herself £700,000 despite the company's losses.

Following the investment by Neo, former Chloé CEO Ralph Toledano was brought into the business as chairman. Toledano is credited with appointing British designer Phoebe Philo as chief designer at Chloé to great success and he left the brand in 2010. He went on to join Puig Group's fashion division in 2012 and is president of the Fédération Française de la Couture, du Prêt-à-Porter des Couturiers et des Créateurs de Mode.

In a statement confirming his appointment, Neo said that further growth for the brand would come from Asia, in particular, along with a realisation of its direct-to-consumer ambitions. It also said it would conduct a review of its cost base.

This year the brand is due to relocate from Battersea, south London, to a new HQ in Hammersmith, west London and is said to be showing its main line at London Fashion Week for the first time (the main line has been shown in New York since its launch) to mark its anniversary.

As well as its main line, the Victoria Beckham business also includes the Victoria second line, a beauty collaboration with cosmetics giant Estée Lauder and a recently announced sportswear collaboration with Reebok. Beckham also created a successful collaboration with US mass-market retailer Target last year. The brand is sold in more than 400 stockists in 50 countries, as well as at its own flagships stores in London and Hong Kong.

Neo, which was also founded in 2008, has a string of other luxury brand investments include product designer Tom Dixon, eyewear brand Alain Mikli, perfumer Miller Harris and leather goods brand Valextra.