Friday, 1 May 2020

Victoria Beckham bows to pressure, withdraws furlough plan




Popstar turned fashion entrepreneur Victoria Beckham has canceled her plan to use the UK government's Job Retention Scheme that would have seen the state paying most of the salaries of her staff who are currently not working.

Beckham has reversed the decision to furlough 30 staff with the move following heavy press criticism that highlighted her family’s £300 million+ fortune and questioned whether she should have been allowed to access around £150,000 of public money.

Of course, Beckham isn't the sole owner of her company. She and her husband own 47% while Neo Investment Holdings pumped £30 million into the firm several years ago. Beckham and her financial backers would all have played a part in both deciding to furlough the staff in the first place and reversing the decision this week. 


“We will not now be drawing on the government furlough scheme,” Beckham told The Guardian. “At the beginning of the lockdown, the shareholders agreed with senior management to furlough a small proportion of staff. At that point, we didn’t know how long the lockdown might last or its likely impact on the business. The welfare of my team and our business means everything to me.”

She said that the move into lockdown had happened very quickly and the company was making decisions at a rapid pace when it decided to furlough staff in the first place. “We’ve now reconsidered and we accept there’s a better way forward for our business. These are tough times and tough decisions and we don’t always get it right - all we can say is we are trying to protect our business and our staff.”

The fashion sector has been particularly in the spotlight during the lockdown with frequent press criticism of it trying to continue its business online, despite the fact that not doing so could mean the closure of some companies.

Companies run (or fronted) by wealthy individuals, or those with small groups of staff that are particularly well-paid have also been in the spotlight. Premier League football clubs, for instance, have been criticized for applying for public money while their star footballers have been paid tens of thousands of pounds (sometimes hundreds of thousands) a week.

A source close to Victoria Beckham told The Guardian that she’s “well aware of the intense scrutiny that comes with being in the public eye, and doesn’t complain about it”.

The report also said that the board thinks the company can get through the current crisis by using its own cash resources and that online sales for the brand since the lockdown has been higher than expected. It's also expected that the Italian factories that make most of its products will be operational by May 11.

Victoria Beckham’s loss-making company had been expected to break even this year but this is unlikely given the coronavirus crisis. It's been reported that Beckham herself is not taking a salary from the company and that she and her backers could be planning to pump more money into it.

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