Marimekko Corporation, Stock Exchange Release, 27 March 2014 at 8:30 AM
The targeted savings will be achieved with considerably fewer job terminations than anticipated.
The consultative negotiations started by Marimekko in February 2014, which applied to all operations in Finland with the exception of the staff at the textile printing factory in Helsinki, have been concluded. At the outset of the negotiations, the overall downsizing requirement was estimated at a maximum of 55 employees. The negotiations, however, reached the conclusion that the targeted savings can be achieved with considerably fewer job terminations. A reorganisation of functions and operational streamlining will lead to the elimination of 22 jobs. It was also decided to convert at most 35 employees' jobs in company-owned stores to a part-time basis or to reduce the agreed number of working hours. Work will also reduce when fixed-term employment contracts will not be renewed. The scope of the negotiations covered 378 employees, 151 of whom were working in stores in Finland. Support will be given for the re-employment of those losing their jobs, and Marimekko will offer training for job-seeking and other services.
"The actions to be taken will boost our competitiveness in the long term and we will improve our operations in such a way that in the future we will be able to respond to the challenges of a changing business climate and the needs of our international clientele even better than before. Our aim is to update processes linked in particular to design, product development and procurement. At the heart of it all are more attractive products and getting them from the drawing board into the stores more easily and quickly," says Mika Ihamuotila, President and CEO.
"It is always hard to reduce personnel. However, through the shared creativity and willpower of the management and employees, we were able to avoid large-scale redundancies and we succeeded in making savings through arrangements of working hours," Ihamuotila continues.
With the downsizing and working hour arrangements in Finland, the aim is to achieve annual cost savings of an estimated total of EUR 1.5 million. The savings will be realised gradually as of the second quarter of 2014, and the full impact of the profit improvement will show as of the last quarter of this year. In connection with the downsizing, the company will post a nonrecurring cost provision of EUR 0.4 million for the first quarter of 2014.
The company has also assigned some new key positions in design, product development and sales as part of the operational reorganisation. Efforts will be made as far as possible to fill the positions through internal transfers within the Group. The international recruitment process started in February 2014 for a new Creative Director for the company is still in progress.
Reorganisations in the United States still to some extent in progress
In February 2014, Marimekko also reported reorganisations concerning its operations in the United States. In respect of these, negotiations on the termination of the lease for the Beverly Hills store and on the possible relocation of the store are still in progress. The previously implemented actions on the country organisation as well as the store closure or relocation are aimed at a total of about EUR 1.0 million in annual savings. The company will report the progress on arrangements concerning the United States in its interim reports.
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Marimekko is a Finnish textile and clothing design company, renowned first and foremost for its original prints and colours. The company designs and manufactures high-quality household goods ranging from interior decoration textiles to tableware as well as clothing, bags, and other accessories. When Marimekko was founded in 1951, its unprecedented printed fabrics gave it a strong and unique identity. Marimekko products are sold in about 40 countries. In 2013, sales of the company's brands were some EUR 191 million with net sales of EUR 94 million. At the end of 2013, there were 133 Marimekko stores. The key markets are Northern Europe, North America and the Asia-Pacific region. The Group has about 500 employees. Marimekko's shares are quoted on NASDAQ OMX Helsinki Ltd. www.marimekko.com