Layoffs affecting one-third of the global workforce and a reorganization of production processes aimed at reducing costs. This is the decision taken by Alexander McQueen, owned by luxury giant Kering, to tackle the financial crisis. The restructuring, reported by Reuters and confirmed yesterday by the unions, aims to reach break-even point after a 60% drop in turnover over the last three years. This has been a difficult period for the London-based brand, which had already announced job cuts at its UK office last year as part of a wider strategic review.
A major impact on Italian activities
The fashion house employs around 180 people in its three Italian units and, as the brand has announced, it is "initiating a formal consultation process with the unions for its operations in Italy." "This is part of a group-wide effort to return the company to sustainable profitability over the next three years," it added.
The unions, which described the situation as "urgent" after a meeting with company management, will meet on February 5 with Kering CEO Luca de Meo, who took over as head of the group last September and was called in by François-Henri Pinault to turn the giant's finances around. Meanwhile, Kering said in a statement that it "fully supports McQueen in its ongoing strategic transformation" and is confident in the measures that will be adopted.
Kering's difficult situation and takeover rumors
More broadly, the crisis at McQueen, founded by British designer Alexander Lee McQueen, reflects the difficult period Kering is going through. In the third quarter of the year, the French luxury group posted revenue of €3.4 billion, down 10% at current exchange rates (-5% at constant rates). In the second half of the year, sales fell by 18% at current exchange rates (-15% at constant exchange rates). In the first nine months of the year, it generated €11 billion in revenue, down 14% at current exchange rates and 12% at constant exchange rates.
As for McQueen's future, just a few weeks ago, according to information from The Platform, rumors were circulating about possible interest fromOTB, the group headed by Renzo Rosso, in acquiring the brand.