With rising production prices, retail companies have to re-position themselves. To achieve these savings, denim lifestyle brand Mustang will have to let 16 employees go globally. The lay-offs will affect mostly the staff working in overhead functions. Mustang has about 600 employees worldwide.
Over the last year, cotton prices have increased by over one hundred percent. The resulting increase in sourcing costs affects all companies in the apparel industry. To compensate the rising costs, Mustang is reducing its profitability expectations, moderate price increases and cost reductions. Throughout this measure, Mustang wants to remain within its traditional price brackets and to maintain the same product quality. Mustang will actively take measurements to manage additional costs in raw material, labour and transportation costs. Even though the company increased its turnover with 8,9% in comparison to last year, the company needs to cut on its personnel.
On the lay-offs Theo Birkemeyer, CEO of the Mustang Group, commented:
“Mustang is developing very positively in the market. We were able to grow our sales by 8.9% in 2010 and our customers again gave us very positive feedback during the Bread & Butter in Berlin. Now situation on the sourcing markets is making life difficult for us and is forcing us to take measures that we would have liked to avoid.”
Mustang a jean history of over 75 years. In 1932 the company moved under guidance of Luise Hermann to Kunzelsau in Southern Germany, after which Albert Sefranek created the Mustang Brand in 1958. To celebrate it's 75 anniversary in 2007, the company turned the house of founder Hermann into a museum.
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