Stella McCartney Looks To Decrease Staff, Stores In Restructuring

LONDON, UK — The coronavirus affected a lot of fashion houses including Stella McCartney. The label plans to enter a restriction phase which includes decreasing staffs and stores.

The designer herself even took a big pay cut.

According to a memo penned by chief executive officer Gabriele Maggio, and seen by WWD, the company is planning to lay off some staff; is asking others to reduce their salaries for an extended period, and is cutting back on activities with an eye on reducing the overall cost base.

It also plans to reevaluate the Stella McCartney store estate, and may turn some stores into franchises or strike new wholesale partnerships. It is understood the restructuring is a work-in-progress and nothing has been finalized.

Stella McCartney herself, who sold a minority stake in the company to LVMH Moët Hennessy Louis Vuitton in July 2019 (see it here), has forgone her salary completely during the pandemic.

Maggio said to WWD, “in common with all companies within our sector, we are currently dealing with one of the most challenging periods faced by any generation, and are conducting a review in order to adapt our business to the changing economics of our industry. No decisions on redundancies have been taken, and we are in consultation with staff at all levels to determine the scale and structure of our business going forward“.

“Our mission to end animal cruelty and to help embed sustainability as core principles in corporate conduct has delivered real progress in recent years, and I am confident we can emerge stronger and better equipped to continue the vital work towards a more sustainable future for all.”

In the memo to Stella McCartney staff, Maggio noted that the brand’s stores had been closed for several weeks, with customer spending “dramatically reduced,” supply chain partners closed, and travel dramatically cut back. “Experts predict that the coronavirus-induced economic shutdown will exacerbate these challenges and it will take several years for commerce to fully recover,” he said.

Maggio added in order to survive, the company needs to restructure and reduce the cost base and size of the business, cut spending on projects and activities, and reduce the size of the teams.

“We have started with asking people to reduce their salaries for an extended period, and Stella herself is leading by example and has foregone her salary completely during this difficult period,” Maggio said.

He said the restructuring would begin with the London headquarters, and some local offices, with the company planning to look at the viability of each store on a case-by-case basis. In some instances, the brand will look to switch to a franchise or wholesale relationship.

He said the company’s approach will be “as sympathetic and supportive as possible.”

“There will be uncertainty and the process will take time, but I am confident we can emerge stronger and, as leaders in our industry, continue the vital work toward a more sustainable future for all,” he said.

In the memo, Maggio was very clear about continuing McCartney’s mission to campaign and effect change in the sustainability space. He said “as consumer tastes and knowledge evolve, some of the largest brands and organizations in the world, including many beyond our sector, are embracing the authentic values that Stella set out when she founded our business in 2001.”

He added that “much progress has been made since then, but this will be of nothing compared to the impact that our brand can have on corporate behaviors in the future.”

Photos Credit: Mary McCartney

Source: WWD