David and Victoria Beckham's brand empire has suffered a sharp fall in revenues, the company said a few months after the celebrity couple bought out their longtime business partner Simon Fuller, creator of the American Idol talent show.
The British pair owns a holding company that controls their sprawling business interests, including stakes in Victoria Beckham's beauty and luxury fashion ventures and David Beckham's endorsement deals and stake in football club Inter Miami FC.
Overall revenues for the Beckhams' combined businesses fell 18 per cent to £45.8m ($87.14m) in the year ending December 2018.
The slump was partially driven by a slowdown in the former Manchester United player's income from Seven Global, a joint venture that manages some of his partnerships such as that with Adidas. Pre-tax losses at Victoria Beckham's fashion business — which has not made an annual profit since it was launched a decade ago — widened by almost a fifth.
The results helped push Beckham Brand Holdings to its first ever net loss of £1.6m ($3.04m) in 2018, which compared with a net profit of £12.3m ($23.4m) a year earlier.
A large tax hit also contributed to the loss. Without that charge, pre-tax profit was £1.8m, down from £15.7m the year before. The company had deferred nearly £2m in taxes based on an agreement with Global Brands Group in 2015, its partner for the Seven Global company. The group had also in previous years benefited from a more generous tax relief on losses made by Victoria Beckham's company, which was no longer available after Neo Investment Partners in 2017 acquired a third of her business.
The company said it had performed better in 2019. The fashion business of the former Spice Girl had this year seen a "significant improvement in financial performance", and her husband had signed new brand partnerships with companies such as sunglass maker, Safilo.
"We end 2019 in a very strong position, with our brands in good health and with significant potential for future growth," the person said.
David Beckham, who retired from a 20-year-long career in football six years ago, has built a personal branding business, partnering with names such as L'Oréal and whisky maker Haig Club.
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The former England star, who has nearly 60m followers on Instagram, previously told the FT his decision to retire came as he wanted to start "owning and building businesses".
This year, he and his wife took full control of Beckham Brand Holdings by paying roughly $50m for the 33 per cent stake owned by Fuller, the former music manager who created the Spice Girls.
In 2018, the Beckhams also launched a film production venture called Studio 99. The company said it was "in talks" with streaming platforms Netflix and Amazon Prime Video over planned projects, including a documentary series about the launch of Inter Miami FC.
The company paid out £11.1m to its shareholders, which last year included Fuller.