Somerset-based upmarket fashion brand Mulberry is planning to shed hundreds of jobs as it struggles to overcome the massive cost of the Covid-19 pandemic on the business.
The firm, best known for its luxury leather bags, employs 1,140 staff in the UK – around half of them at its head office and factory at Chilcompton, south of Bath, and a second manufacturing site at Bridgwater. 
Mulberry joins a growing list of blue-chip UK manufacturers, retailers and hospitality sector businesses warning of widespread job cuts as the impact of the pandemic on the economy starts to hit home.
The company said in a statement it would start reopening its UK stores from next Monday, having already pulled up the shutters on some outlets in China, South Korea, Europe and Canada.
But it said social distancing measures and reduced tourist and footfall levels would continue to affect its income.
Mulberry has 55 stores in the UK, including 19 concessions in John Lewis stores, and 14 in House of Fraser shops. It has 47 stores in 25 countries.
It said it had continued to trade through its digital channels without interruption but added that while its sales performance had been good it could not fully offset the decrease in demand from store closures.
The company said: “Even once stores reopen, social distancing measures, reduced tourist and footfall levels will continue to impact our revenue.
“As a result of this, we must manage our operations and cost base accordingly to ensure the company is the correct size and structure to reflect market conditions.”
The consultation over job losses will last 45 days. Mulberry said affected staff were being contacted.
The Company said it had reacted swiftly to the impact of Covid-19 and continued to proactively manage its capital and reduce costs.
“We have also taken all necessary steps to manage our inventory levels in line with anticipated demand. We are maintaining a positive dialogue with the company’s lenders to ensure we maintain a robust liquidity position,” it said in a trading update to the London Stock Exchange.
It added that it had net cash on hand and its borrowing facilities remained undrawn.
It said it expected the recovery in its overall sales levels over the medium term to be gradual.
“Even once stores reopen, social distancing measures, reduced tourist and footfall levels will continue to impact our revenue,” it added.
“As a result of this, we must manage our operations and cost base accordingly to ensure the company is the correct size and structure to reflect market conditions.”
CEO 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.”
Mulberry announced it plans to cut 25% of its near 1,400-strong worldwide workforce of ahead of today’s figures from the Office for National Statistics, which showed the UK economy shrunk by an unprecedented 20.4% in April.
The decline was three times as big as March’s fall and 10 times bigger than any seen previously.
