Investment: Hollow Victory for Branson

EVIDENCE, if any was needed, that Richard Branson's Midas touch could be getting a bit shaky was amply available yesterday as Victory Corporation, the AIM-listed cosmetics and clothing company, announced its results.

Victory shares have plunged to half their flotation price in less than two years. Yesterday they were unchanged at 27.5p after final results showed a pounds 9.7m loss in the year to March 31.

To be fair, the company was always meant to be a start-up. Mr Branson, together with long-time associate Rory McCarthy, picked up on a proposition from Mark and Liz Warom, who believed they could make and distribute upmarket cosmetics and clothes without the big margins the industry enjoys. The venture promptly raised pounds 45m.

Since then Virgin Vie, Victory's cosmetics brand, has struggled to establish an upmarket niche while the Virgin Clothing subsidiary has delayed its formal launch until August.

As the share price slumped, Virgin opted for a capital restructuring in January, taking a 52 per cent stake and pumping in pounds 13.5m. Selfridges and other outlets have taken an interest in Virgin Clothing products and Virgin Vie has been more successful in direct sales, taking on 1,100 consultants.

Yet the venture is not going well. Shop openings have been delayed, as have overseas launches. The company's own broker expects a pounds 15m loss this year and no profit until the year ending 2001 - a year later than hoped. Even at these depressed levels, the shares may still be too high.