Paul McCartney and Stella McCartney

LONDON — The Stella McCartney business is retrenching and restructuring in the wake of COVID-19, with the designer herself leading the way.

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 last summer, and who has been advising its founder Bernard Arnault on sustainability, has forgone her salary completely during the pandemic.

The Stella McCartney business is not alone: Brands and retailers large and small, mass and luxury, have begun to downsize, cut costs and staff as the impact of lockdowns, quarantines and furloughs continues to bite.

Even healthy businesses have been forced to make cuts due to the prolonged store closures, social distancing and evaporation of international travel and tourism.

Last week, Britain’s largest luxury brand, Burberry, said it was in talks to shed 5 percent of its workforce, or 500 jobs internationally, including 150 office-based roles in the U.K. Burberry confirmed the layoffs as it reported a 48.4 percent fall in first-quarter retail sales to 257 million pounds.

Contacted on Monday by WWD, Maggio said “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.”

It was a little over a year ago that McCartney sold a minority stake in her environmentally driven company to LVMH, and became a special adviser to Arnault and the group’s executive committee members, having been given carte blanche to preach the environmental gospel at the French luxury giant.

In fashion and luxury, McCartney has been at the forefront of helping to source and develop textiles and manufacturing processes that are animal-friendly and sustainable. Hers was one of the first brands — under former owner Kering — to undertake an environmental profit-and-loss audit, which sees a company measure its impact on the environment.

She dubbed her women’s 2020 resort collection “Force of Nature” and the men’s spring 2020 collection “Eco Weirdo.”

T-shirts shouted “Eco Weirdo,” “Handle With Care, You’re Holding Planet Earth” or “SOS,” while fabrics included a type of viscose that was three years in the making, organic cotton, regenerated cashmere and nylon. Bags were made from eco Alta Napa leather and PVC was nowhere to be found.

Since 2010 all products — both from Stella McCartney and the brand’s collaboration with Adidas — have been PVC-free.

“I think that’s important to take on board that we are still weirdos to the majority of the world, and we are fine with that. I am fine with being a weirdo, and it will probably never change,” said the buoyant designer during a walk-through of both collections last year in London.

While the brand’s full revenues were never disclosed and always consolidated onto the Kering balance sheet, they were thought to be around 300 million euros. The company’s valuation, when it finally split from Kering, was estimated to be about 600 million euros, according to sources.

For pre-fall 2020, which she showed in Milan in January, McCartney made big strides on the sustainability front, creating biodegradable fur coats from plant-based materials such as corn, and crafting eco-friendly stretch denim made with mushroom and seaweed dyes. That latter fabric is known as Coreva and is made by the Candiani denim mill.

Even her dangly, heart-shaped earrings were made from traceable, sustainable wood sourced in Sweden.

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