Boardroom shake-up at Branson's Victory

VICTORY Corporation, Richard Branson's publicly-quoted clothing and cosmetics company, halved in value yesterday after warning of sharply higher losses and unveiling a boardroom shake-up.

Shares in Victory, which were priced at 58p when it floated on the Alternative Investment Market in October 1996, fell by 10p to 9.5p valuing the company at pounds 30m. At the time of flotation it was capitalised at pounds 110m.

Victory trades under the Virgin Clothing and Virgin Vie brands, and is 51 per cent owned by Mr Branson and his family trusts.

The market had been expecting losses of about pounds 12.5m this financial year, but the loss is now likely to be nearer pounds 19m, mainly due to Victory's decision to delay the roll-out of its chain of cosmetics shops. Victory lost pounds 10m last year.

News of the higher losses came alongside the resignation of three of Victory's non-executive directors, including Rory McCarthy, a close friend of Mr Branson and a fellow balloonist.

Mr McCarthy's brother Tim is also resigning from the board, as is Brad Rosser who has also quit his post as corporate development director of Virgin Group.

Mr Rosser developed the concept of the cosmetics shops whilst the McCarthy brothers were responsible for persuading Mr Branson to put the Virgin name to clothing.

The changes announced yesterday are the result of a wide-ranging review of the business by Victory's executive chairman, Ian Pluthero, who arrived in April.

Victory delayed the roll-out of its cosmetics retail chain earlier this year because it was not happy with the design of the shops. "We need to add some fun and exuberance to them; at the moment they are too clinical," said Victory's finance director Richard Knight.

The intention ultimately is to build up a nationwide chain of 100 shops. So far only six have opened.

The clothing range, designed to compete with the likes of Calvin Klein, Hugo Boss and Donna Karan, is being launched this Thursday.