Belstaff, the prestigious motorcycle and fashion clothing brand, is currently facing a difficult battle to recover from its financial losses, as outlined in its latest accounts. Owned by billionaire Sir Jim Ratcliffe, the company reported a staggering loss of £48 million and an increasing debt burden. The auditor, KPMG, has raised concerns that Belstaff heavily relies on the goodwill of its owner for survival and urgently requires a cash injection. However, there is some positive news from the company’s 2018 figures, which indicate improvements compared to the previous year, suggesting that Ineos, the parent company, has been providing continued support to the brand.
In 2019, Belstaff closed its stores in Japan, but this did not hinder its efforts to invest in the brand’s growth. The company made significant investments by hiring a new Chief Marketing Officer (CMO), opening flagship stores in Glasgow, London, and Regent Street, and forming a partnership with brand ambassador Sir Ben Ainslie. Ineos, through a spokesperson, confirmed its commitment to Belstaff and emphasized that there have been notable improvements in performance since acquiring the brand. Additionally, the spokesperson highlighted the significant growth of Belstaff’s online business by 34% in 2018, which continued to expand in 2019.
While Belstaff experienced a slight dip in sales in 2018, there was an improvement in gross margin percentage and a reduction in losses. However, the company’s debts increased, with a substantial amount owed to Ineos through inter-company loans. KPMG has expressed concerns about Belstaff’s ability to access additional funds in a timely manner. In 2017, Ineos acquired Belstaff as part of a larger deal involving JAB Holding divesting its fashion operations.
Belstaff’s management team has defined their objectives in response to the financial challenges. They aim to increase revenue and profitability while reducing operating costs. The team also emphasizes the need for refining the retail network, seeking new opportunities in suitable locations with reasonable rents, and closely monitoring the wholesale customer portfolio to maximize sales and expand the brand’s presence globally.