Marc Jacobs Slashes Corporate Jobs Amid Coronavirus Fallout
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Amid the coronavirus pandemic, Marc Jacobs has made corporate layoffs across several departments including design in recent weeks.
According to a report from FN’s sister publication WWD, the LVMH-backed brand cut about 60 jobs. A Marc Jacobs spokesman told the publication that the brand has reduced its headcount by less than 10%, including retail associates. Additionally, although Marc Jacobs has implemented layoffs, the brand has not reduced salary for staff during the COVID-19 crisis, the representative said.
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“Given the substantial impact of COVID-19 on the retail industry, we have made targeted changes that allow Marc Jacobs International to adapt to the evolving environment and continue forward on our path to refocus the business and highlight the creative innovation that has always defined our brand,” the spokesperson said. “This included making the difficult decision to eliminate certain roles and, for a small number of employees, reducing responsibilities.”
A representative from Marc Jacobs did not immediately respond to FN’s request for comment.
The luxury sector has been particularly hard hit by the coronavirus outbreak — which caused months-long store closures and prompted many consumers to slash their discretionary spending. A late March report from Bain & Company forecast that the global luxury market would contract by between 25% and 30% for the first quarter of 2020. For the full year, the consultancy expects to see luxury sales decline 22% to 25%, or a drop in the range of 60 billion euros to 70 billion euros. What’s more, Bain predicts the pandemic’s impact will continue to be felt by luxury players through 2021.
With the coronavirus crisis leading to a significant reduction in sales, companies have been forced to make difficult decisions. Scores of retailers chose to furlough store workers in April and March — with some also placing corporate staff on unpaid leave. In addition, companies have implemented numerous measures to preserve cash flow, including slashing certain nonessential spending, closing poor-performing stores and tapping revolving credit lines. Similar to Marc Jacobs, a number of other fashion players have made the decision to reduce headcount, among them Mulberry and The RealReal. Plus, a growing list of retailers, like JCPenney, J.Crew and Neiman Marcus Group, have filed for Chapter 11 bankruptcy protection in recent weeks.
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