Layoffs affecting one-third of the total 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 address the financial crisis. The restructuring, reported by Reuters and confirmed yesterday by the unions, aims to achieve profitability after a 60% drop in revenue over the past three years. This is a challenging period for the London-based brand, which had already announced job cuts at its UK office last year as part of a broader strategic review.
A Major Impact on Italian Operations
The fashion house employs approximately 180 people at its three Italian facilities and, as the brand announced, it is “beginning a formal consultation process with unions regarding 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 an “emergency” following a meeting with company management, will meet on February 5 with Kering CEO Luca de Meo, who took the helm of the group last September and was brought in by François-Henri Pinault to turn the financial situation of the giant around. Meanwhile, Kering stated in a press release that it “fully supports McQueen in its ongoing strategic transformation” and is confident in the measures that will be implemented.
Kering’s Difficult Situation and Takeover Rumors
More broadly, the crisis at McQueen—founded by British designer Alexander Lee McQueen—reflects the challenging period Kering is currently facing. In the third quarter of the year, the French luxury group reported revenue of 3.4 billion euros, a 10% decline at current exchange rates (-5% at constant exchange rates). In the second half of the year, sales fell by 18% at current exchange rates (-15% at constant exchange rates). Over the first nine months of the year, it generated 11 billion euros 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 reports from The Platform, rumors were circulating about possible interest from OTB—the group led by Renzo Rosso—in acquiring the brand.