MARIMEKKO IS PLANNING TO RESTRUCTURE ITS OPERATIONS AND INITIATES COOPERATION PROCEDURE

Marimekko Corporation, Press release, 13 August 2020 at 7:50 a.m.

Due to the coronavirus pandemic, the global fashion and specialty retail sector is facing the worst crisis in decades. 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 create pressure for profitability for the fashion sector.

Marimekko’s operating environment is undergoing a great transformation. Due to the coronavirus pandemic, the company has already been adjusting its retail operations since spring. To strengthen its long-term competitiveness in the new environment, Marimekko has now 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.

"To strengthen our future competitiveness, we must make sure that our organization structure, competencies, job contents and working methods respond in the best possible way to the dramatic transformation in consumer behavior, driven by digitization and other external dynamics intensified with the pandemic. 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," says Tiina Alahuhta-Kasko, President and CEO of Marimekko.

"I find it extremely regrettable that, in order to reorganize and streamline our operations, we need to initiate consultative negotiations in Finland as well as corresponding processes in our above-mentioned international organizations. With these unfortunate but necessary measures, we aim to secure the financial position of our company in the long term," Alahuhta-Kasko continues.

The consultative negotiations to be initiated will include all Marimekko operations in Finland, with the exception of the retail store staff and the production personnel at the printing factory in Helsinki. The corresponding processes in Scandinavia, North America and Australia will apply to all operations except the personnel in retail stores. Through the reorganization and streamlining of cost structure, the company seeks to achieve annual savings in costs estimated at around EUR 1.5 million in total.

Apart from possible job reductions, the negotiations will also consider possible changes to job descriptions, working methods and the organization of work, which would have a significant effect on the position of employees, as well as possible outsourcing of some functions.

At the end of June 2020, Marimekko had 432 employees (FTE). The consultative negotiations and corresponding processes to be initiated concern a total of 193 people globally. The negotiations in Finland will begin on 19 August 2020 and will last at least six weeks unless otherwise agreed.

Further information:
Tiina Alahuhta-Kasko, President and CEO, tel. [phone]

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Marimekko is a Finnish lifestyle design company renowned for its original prints and colors. The company’s product portfolio includes high-quality clothing, bags and accessories as well as home décor items ranging from textiles to tableware. When Marimekko was founded in 1951, its unparalleled printed fabrics gave it a strong and unique identity. Marimekko products are sold in about 40 countries. In 2019, brand sales of the products worldwide amounted to EUR 251 million and the company's net sales were EUR 125 million. Roughly 150 Marimekko stores serve customers around the globe. The key markets are Northern Europe, North America and the Asia-Pacific region. The Group employs about 450 people. The company’s share is quoted on Nasdaq Helsinki Ltd. www.marimekko.com