Victoria Beckham's fashion label will need additional investment to stay afloat after suffering an £8.7m loss when Covid hit, the company's auditors have warned.
The company faces material uncertainty about its ability to continue as a going concern after a drop in sales in 2020, according to BDO accountants.
They added that Victoria Beckham Holdings had indicated that it will need "continued support and funding from shareholders, and that there are no contractual arrangements for this funding."
The company, whose clothing has been worn by the likes of Gwyneth Paltrow and the Duchess of Sussex, has already received extra cash from shareholders including David and Victoria Beckham.
It was given loans of £9.2m in 2020 to settle a debt to HSBC, according to accounts on file with Companies House, while a further £600,000 was provided to the company this year to help it cope with the damage caused by Covid.
Earlier this year, Ms Beckham said her business had been hit by the pandemic, adding: "I'm lucky I still have a business, but doing fashion shows costs a lot of money."
The former Spice Girls star's company has suffered eight years of losses since it was founded in 2008.
Sales for 2020 stood at £36.1m, a 6 per cent drop from 2019 levels, and directors said the lockdowns slowed sales at its wholesale business and flagship store in London.
The company said it had cut costs during the year to cope with this downturn, cutting IT contracts and merging its two brands, Victoria Beckham and Victoria, Victoria Beckham, into one. It has also received a £582,900 settlement payment, believed to relate to a trademark dispute with Australian skincare company VB Skinlab.
Victoria Beckham Holdings directors said they had now adopted "a new strategic plan for the business for the next three years with a specific focus on reducing costs, streamlining operations and creating a long-term model."
The company added: "Despite having no formal confirmation of this continued support, the directors have a reasonable expectation that shareholders will provide any support and have accordingly prepared the financial statement on a going concern basis." .
