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The British fashion company Mulberry and the American designer Marc Jacobs’ brand both plan to cut hundreds of jobs out of their global workforces. With these layoff plans, they intend to reduce spending in order to strengthen their cash flow and overcome the health crisis. Amidst the uncertainties, one thing remains certain: the luxury industry will not recover unscathed.
Both Mulberry and Marc Jacobs are planning on reducing their workforce. The goal is to lower their cost base after demand was hit hard by the coronavirus pandemic and prepare a gradual recovery as their stores gradually reopen around the world.
Mulberry is reducing its global workforce by 25%
The British luxury brand Mulberry, known for its leather bags, said on Monday June 8 that it would cut 350 jobs out of the 1,500 people it employs worldwide, representing about 25% of its global workforce.
“We have reacted quickly to manage the impact of Covid-19 and continue to execute a well-developed plan to manage capital, reduce costs and maintain a strong liquidity position“, said Thierry Andretta, Mulberry CEO, in a statement.
The brand’s decision to let go a third of its workforce is a response to the financial difficulties generated by the pandemic and the fall in both consumption and production after the closure of its stores: “Launching a consultation process was an extremely difficult decision for us, but it is necessary for us to respond to difficult market conditions, to protect the maximum number of jobs possible and to secure the future of the company.” continues the CEO.
And while Mulberry has already reopened stores in China, South Korea, continental Europe and Canada and will begin a progressive re-opening of its UK stores from next week, uncertainty about the impact and duration of Covid-19 on its business and the wider economy remains and the brand is not betting on a massive sales surge in the medium term. On the contrary, it expects the recovery to be slow, incremental and … laborious.
Indeed, the group, whose shares have fallen by 30% so far this year, is expecting that even after the stores reopen, the decline in tourism and visitors’ traffic levels will continue to affect revenues and that social distancing measures will discourage potential buyers from returning to physical consumption.
“Despite the strong performance of our industry-leading digital and multi-channel platform and our global network of digital concessions, the closure of all our physical stores has had and will continue to have a significant effect on our business.” said Thierry Andretta.
Marc Jacobs cuts around 60 staff members, including chief designer Olympia Le-Tan
Marc Jacobs has also made many layoffs after poor sales in the first quarter of 2020 and production activities that are struggling to get back on track, all as a result of the devastating coronavirus outbreak.
The American brand has decided to cut around 60 jobs, including the one of the famous designer Olympia Le-Tan, who recently left Paris for New York to join the brand’s design team and lead Marc Jacobs’ affordable product line, The Marc Jacobs.
A surprising decision given that the Marc Jacobs collection under the direction of Le-Tan was accounting for approximately 80% of the brand’s sales, with products selling between $95 and $1,200 each and regular partnerships with iconic brands such as The Peanuts, New York Magazine and the Four Seasons Hotel.
A spokesperson for the luxury house said the layoffs represented less than 10 percent of the brand’s overall workforce, including retail associates, and were aimed at reviving the company, much affected by the current economic climate: “Given the substantial impact of COVID-19 on the retail industry, we have made targeted changes that allow Marc Jacobs International to adapt to the evolving environment and continue forward on our path to refocus the business and highlight the creative innovation that has always defined our brand. This included making the difficult decision to eliminate certain roles and, for a small number of employees, reducing responsibilities“.
In a context of crisis, fragile luxury players are therefore trying to save money to improve cash flow and avoid bankruptcy or irreversible damage.
The global pandemic and the economic fallout are then redesigning the luxury landscape as prestigious brands find themselves exposed to restructurings that are disrupting and transforming them in depth.
Read also > Mulberry prepares for the post-crisis period and reviews its pricing policy
Featured photo : © Mulberry[/vc_column_text][/vc_column][/vc_row][vc_row njt-role=”not-logged-in”][vc_column][vc_column_text]
The British fashion company Mulberry and the American designer Marc Jacobs’ brand both plan to cut hundreds of jobs out of their global workforces. With these layoff plans, they intend to reduce spending in order to strengthen their cash flow and overcome the health crisis. Amidst the uncertainties, one thing remains certain: the luxury industry will not recover unscathed.
Both Mulberry and Marc Jacobs are planning on reducing their workforce. The goal is to lower their cost base after demand was hit hard by the coronavirus pandemic and prepare a gradual recovery as their stores gradually reopen around the world.
Mulberry is reducing its global workforce by 25%
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The British fashion company Mulberry and the American designer Marc Jacobs’ brand both plan to cut hundreds of jobs out of their global workforces. With these layoff plans, they intend to reduce spending in order to strengthen their cash flow and overcome the health crisis. Amidst the uncertainties, one thing remains certain: the luxury industry will not recover unscathed.
Both Mulberry and Marc Jacobs are planning on reducing their workforce. The goal is to lower their cost base after demand was hit hard by the coronavirus pandemic and prepare a gradual recovery as their stores gradually reopen around the world.
Mulberry is reducing its global workforce by 25%
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