There’s something wrong here

Can’t quite work out what it is:

British leather jacket brand Belstaff is dependent on the goodwill of billionaire owner Sir Jim Ratcliffe to survive, its auditor said after the heavily indebted firm posted a £48m loss.

The 110-year-old firm could struggle to operate without a financial lifeline from parent company Ineos, auditor KPMG said when signing off its books. Chemicals giant Ineos is owned by Sir Jim.

Accounts filed this month with Companies House show Belstaff’s losses narrowed to £48m during 2018, compared with £62m a year earlier.

Sales also fell slightly, down from £31m to £30.5m during 2018 after the firm closed a store at Westfield shopping centre in west London.

Sir Jim’s a canny guy and he’s certainly rich enough to be able to carry the losses of his favourite leather jacket maker.

It’s also, possibly and vaguely, for a company turning over £30 million odd to lose £48 million in a year. Something horrendous must have happened bu it can happen. But £100 million of losses over 2 years from £60 million turnover?

I think even Sir Jim would find that a little expensive for a side pocket luxury.

Summat’s wrong here. And the thing that’s wrong is that the company’s, financially at least, a right dog. Negative gross margins on their sales meaning that the entire overhead and plus some is loss.

That might be valid for a start up but something that been’s around a century?

8 thoughts on “There’s something wrong here”

  1. belstaff waxed jackets used to be the cheap alternative to leather jackets for impoverished motorcyclists. horrible smelly sticky things. Now look at the prices -£450 for a jacket. I’ve still got and old belstaff motorcycle jacket and trousers (but not waxed cotton – some plastic creation that remains probably the most waterproof and warm set of clothing that i own even 30/40 years later, but with absolutely no style whatsover) You’d have to be crazy to spend £450 on a belstaff waxed jacket these days. Looking at their website their prices are laughably over the top.

  2. Yeah, I took a look at the website as well. If closing the Westfield site lost half a bar in sales, that gives about fourteen hundred quid a day, so 2~3 transactions per day at those prices? Can’t see how the Westfield site squares with the other locations, really.

  3. Back in the day (late 1960s), my motorcycle kit was Belstaff waxed cotton. Jolly fine stuff it was, and the equal of Barbour. Now my motorbike and general winter outdoors and clearing snow jacket is Barbour.

    Belstaff management took their eye off the ball. Barbour turned themselves into a premium brand.

  4. Just had a gander through the accounts. Agree it’s odd. They are selling at a negative gross margin supposedly… seems odd given the high prices.

    Then they are chalking up huge opex, although a lot of that appears to be a provision for an onerous contract of some kind.

    The whole business is in huge negative equity but shareholder loans from Ineos are standing behind it.

    Speaking of Ratcliffe – how did he actually make his a) initial money and b) big money? Anyone actually know?

  5. his favourite leather jacket maker

    No leather jackets for ~90 years. Belstaff 1924 until ~2004/11 was known for Wax Cotton biker and other harsh environment outerwear. Sort of a prols Barbour

    After sold new owner decided to reposition Belstaff as an English heritage brand centred on luxury.

    Problem being they had zero English heritage luxury history and a name synonymous with black greasy biker jackets & trousers. Barbour, Burberry, Hunters etc they’re not

    Ratcliffe bought in 2017 – was he having a fling with Helen Wright or Sean Lehnhardt-Moore?

    @moqifen +1

  6. Belstaff have made leather jackets since the 60s, possibly earlier. I suspect their troubles are because they’ve opened their own outlets rather than having a couple of rails in John Lewis and Harvey Nicks.

    Being the sort of bloke who comes home with a new jacket every time I have a bit of spare cash, I’ve got a couple of Barbours and Belstaffs. I’d say that generally a Barbour jacket will be 50% cheaper and 50% more practical than the equivalent Belstaff.

    That said, if there were a fire and I could only save one, it’d be a Belstaff, because they are 100% cooler than Barbour and always have been.

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