Luxury handbag maker Mulberry has cast doubt on a quick retail recovery as it confirmed that it will make approximately 25% of its workforce redundant – entailing the loss of over 350 jobs.
In a trading update, it noted that it’s ‘digital sales performance has been good’ but hasn’t been able to completely offset the decline from sales of traditional stores.
It added that it expects recover in its overall sales levels to be ‘gradual’, highlighting that even when stores reopen – social distancing and reduced footfall will negatively impact overall sales levels.
Hence the move has been taken to cut costs in order to maintain robust liquidity.
“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.
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.”Thierry Andretta, Mulberry’s Chief Executive Officer
Mulberry’s share price closed down by 3.32% on Monday.