8th Jun 2020 09:56
(Alliance News) - Mulberry Group PLC on Monday said it is planning to cut approximately 25% of jobs across its business as it foresees only a gradual recovery in sales.
The luxury leather accessories retailer said most of its closed shops have stayed shut since its March update, although stores have reopened in China and South Korea - along with some in Europe and Canada.
Digital sales have continued and performed well but cannot offset the demand drop from store closures, the company said.
Mulberry is planning to re-open some of its UK stores in June 15, in line with government advice and has put more safety standards and procedures in place to ensure safety.
The company, which is based near Bath, England said it "reacted swiftly" to the pandemic and is managing is capital, cutting costs, and taking steps to manage inventory levels. Mulberry also said it is engaged in "a positive dialogue" with lenders to make sure its liquidity position stays "robust". So far, it has net cash on hand, and its borrowing facilities are still undrawn.
However, the recovery of overall sales levels in the medium term are expected to be gradual, with revenue continuing to be hurt by social distancing measures, as well as lower tourist and footfall levels.
Given this, Mulberry said is needs to make sure "the company is the correct size and structure to reflect market conditions". For this reason, it is consulting on proposals that would see it cut employee numbers by around 25% across the global business.
Chief Executive Thierry Andretta said: "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."
Mulberry's annual 2020 results are set to be published in August.
Shares in Mulberry were up 1.4% at 198.65 pence in London on Monday morning.
By Anna Farley; [email protected]
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