LONDON (Reuters) - British luxury brand Mulberry (MUL.L) said on Monday it plans to cut 25% of its global workforce of about 1,500, seeking to reduce its cost base after demand was hit by the coronavirus pandemic.
Mulberry, best known for its leather bags, said given the uncertainty over the impact and duration of COVID-19 on its business and the wider economy, it expected the recovery in sales levels over the medium term to be gradual.
The group, whose shares have fallen 30% so far this year, warned that even once stores reopen, social distancing measures, along with reduced tourist numbers and footfall levels, would continue to impact revenue.
“Launching a (employee) 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 Chief Executive Thierry Andretta.
The majority of Mulberry’s over 120 owned and partner stores across 25 countries remain closed due to national lockdowns.
However, it has re-opened stores in China and South Korea, and some stores in Europe and Canada. It plans a phased re-opening of its UK stores from June 15. Mulberry’s online business has traded through the crisis.
The group said it was maintaining a positive dialogue with lenders to ensure it maintained a robust liquidity position. It currently has net cash on hand and its borrowing facilities remain undrawn.
Reporting by James Davey; Editing by Sarah Young and Jan Harvey