Massive jobs cuts loom at Gerry Weber
today Oct 19, 2018
Troubled fashion company Gerry Weber is making a new round of job cuts. A report commissioned by the company to review its restructuring plan found that the group’s core business model is “sustainable and viable for the future”, announced outgoing CEO Ralf Weber on Thursday. But the restructuring process will require more efforts. “This will inevitably result in deep cuts both in personnel as well as the corporate structure”, Weber said.
The Germany fashion company, which owns Hallhuber, Samoon and Taifun in addition to its core Gerry Weber brand, employs currently around 6,500 people. It has been struggling with declining sales and mounting losses for several quarters, and its share price has more than halved over the last twelve months. But shares in the company grew by over 15% on Thursday. Volker Bosse, an analyst from the Baader Bank, described the company’s latest announcement as good news, as it means banks will continue to support the business during the reorganisation. However, the process will last longer than expected and bring larger cuts, he continued. So the group’s ability to return to growth will remain to be seen.
The group is currently negotiating with financing partners to ensure the ongoing financing of the group, and has already implemented a series of operational and structural restructuring measures, it announced in a press release. It wants to adjust to the changes in the retail market and consumer behaviour as the landscape continues its ‘dramatic’ evolution. The company didn’t say exactly how many jobs are at risk of redundancy.
Spokesman Johannes Ehling reassured investors by saying he is sure Gerry Weber will “get back on track after a successful restructuring”. On the stock market, the company’s announcement caused a price jump on Thursday.
Copyright © 2019 Dpa GmbH