Somerset-born luxury fashion brand Mulberry to cut a quarter of its workforce due to coronavirus
World-famous and Somerset-born fashion brand Mulberry is cutting its workforce by a quarter after demand for its luxury products severely dropped due to the coronavirus pandemic.
The company, which is famous for its handbags, has two major factories in Somerset.
A consultation was launched by the UK business which included plans to reduce its global workforce of around 1,500 staff by 25%.
Mulberry first shut sites in March due to the pandemic. The company says the majority of its stores have since remained closed - apart from some sites in China, South Korea, Europe and Canada.
It says some UK stores will be reopened on Monday 15 June.
Despite being shut, Mulberry put its efforts into producing thousands of reusable PPE gowns in both Somerset factories for hospitals across the region.
The retailer has also focused on digital sales during the lockdown which it says have been "good" but "cannot fully offset the decrease in demand experienced from store closures".
The luxury brand says that lower footfall, social distancing measures and fewer tourists will continue to hit revenues despite its best efforts.
It expects the economic impact of the outbreak to result in a "gradual" recovery in overall sales.
Shares in Mulberry fell by 5.6% to 185p in early trading today (Monday 8 June).
The coronavirus outbreak has proven to be a testing period for fashion retailers.
Mulberry's decision to cut back staff follows rivals such asDebenhams, Laura Ashley and Cath Kidston being forced into administration during the outbreak.
Chief executive Thierry Andretta said: "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.
"We remain confident in the strength of the Mulberry brand and our strategy over the long term."