The luxury British brand Mulberry is planning to cut at least 25% of its global workforce of almost 1,400 to reduce costs as sales have suffered because of the coronavirus pandemic.
The company, which employs 1,140 staff in the UK, is seeking to make the cuts across its entire business, from head office and retail to manufacturing and distribution.
Mulberry has launched a consultation with the 470 staff whose jobs are at risk, a third of its workforce, with the aim to cut “approximately” a quarter of its global workforce.
“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,” said Thierry Andretta, Mulberry’s chief executive. “We remain confident in the strength of the Mulberry brand and our strategy over the long term.”
The company expects the impact of the coronavirus on its business will mean the recovery in sales will only be gradual over the medium term.
Mulberry, which has reopened some stores in China, South Korea, Europe and Canada, plans to start the phased reopening of some of its UK stores from 15 June.
“Even once stores reopen, social-distancing measures, reduced tourist and footfall levels will continue to impact our revenue,” the company said.
Mulberry said that while it had continued to trade online throughout the pandemic, with good sales, it had not been able to offset the revenue decline because of the closure of high street stores and concessions.
“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,” Andretta said.
Mulberry has maintained a “positive dialogue” with lenders to ensure its balance sheet remains robust. The company has net cash on hand and has not had to utilise any of its 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,” Andretta said.
Mulberry has 55 stores in the UK, including 19 concessions in John Lewis stores, and 14 in House of Fraser shops. Outside the UK, Mulberry has 68 stores.