- Huw Hughes |
British luxury label Mulberry has announced plans to cut around 25 percent of its global workforce in a bid to streamline its business during the Covid-19 pandemic.
It is the latest instalment of bad news in what has been a devastating few months for the international fashion industry, with scores of companies announcing similar job cuts to reduce costs and make up for lost revenues.
Mulberry said that despite managing to maintain “good” online sales during international lockdowns, it was not enough to offset the loss of revenue from physical stores.
Now, in a bid to “ensure the company is the correct size and structure to reflect market conditions”, it is launching a consultation process on proposals to reduce its global employee numbers by around 25 percent.
So far, Mulberry has been able to reopen stores in China and South Korea as well as some stores in Europe and Canada. The majority of its stores, however, remain closed.
The company will begin reopening stores in the UK from 15 June, when all non-essential stores in the country are allowed to reopen.
It expects the recovery of its overall sales levels over the medium term to be “gradual”.
’Incredibly difficult decision’
The company added that it is maintaining “a positive dialogue” with its lenders to ensure it maintains a “robust liquidity position” and currently has net cash on hand and undrawn borrowing facilities.
“We reacted swiftly to manage the impact of Covid-19 and continue to execute a well-developed plan to manage capital, reduce costs and maintain a robust liquidity position,” said Mulberry CEO Thierry Andretta in a statement. “In spite of the good performance of our sector leading digital and omni-channel platform, and our global network of digital concessions, the shutting of all our physical stores has had, and will continue to have, a marked effect on our business.
“Launching a consultation process has been an incredibly difficult decision for us to make but it is necessary for us to respond to these challenging market conditions, protect the maximum number of jobs possible and safeguard the future of the business. We remain confident in the strength of the Mulberry brand and our strategy over the long-term."
Photo credit: Mulberry