On the day that Marimekko announced a 20% fall in sales for Q2, the company also said it’s planning to restructure its operations. The company blamed the pandemic and the fact that the “global fashion and specialty retail sector is facing the worst crisis in decades”.
It said that the “pandemic has expedited the transformation of consumers’ purchasing behavior and intensified structural changes in the sector, such as digitalization. It has accelerated the shift to digital sales channels among customers — including new customer groups — and this will also influence Marimekko’s distribution channel choices in the future.
“At the same time, the coronavirus crisis has taken uncertainty over the global economy to a completely new level, and consumers’ increased price sensitivity as a result of recession and growth in surplus inventories due to the pandemic creates pressure for profitability for the fashion sector.”
The firm has already been adjusting its retail operations since the spring and now, “to strengthen its long-term competitiveness in the new environment”, it has decided to “initiate consultative negotiations with its personnel in order to reorganize and streamline its operations in Finland based on both production-related and financial reasons. The company has also decided to initiate corresponding processes in its organizations in Scandinavia, North America, and Australia”.
President and CEO Tiina Alahuhta-Kasko said: “To strengthen our future competitiveness, we must make sure that our organizational structure, competencies, job contents, and working methods respond in the best possible way to the dramatic transformation. Our strategy has for some time already been leaning on this direction, but now the ongoing changes put increasing pressure on our operations as well.”
The consultation period will include all Marimekko operations in Finland, with the exception of retail store staff and the production personnel at the printing factory in Helsinki. The corresponding processes in Scandinavia, North America, and Australia will be run in the same way.
The company said the changes should help it save annual costs of around €1.5 million.
Jobs will be lost but the firm will also look at possible changes to job descriptions, working methods, and the organization of work, as well as possible outsourcing of some functions.
At the end of June 2020, the company had 432 employees and the restructure is focused on 193 of them.