Job losses expected as Mamas and Papas looks to cut costs

Staff at the head office today began a 30-day consultation period which is expected to result in between 50 and 90 redundancies, some of which will be voluntary, The Yorkshire Post understands.

Today’s announcement follows a strategic review launched earlier this year. In July, the company, which employs 1,300 staff worldwide, including 440 in Huddersfield, announced it had signed a deal with private equity firm BlueGem, which took a majority stake in the previously 100 per cent family-owned firm.

Earlier this month it employed retail executive Derek Lovelock as interim CEO.

As well as consulting staff, the firm has put proposals to the landlords of 60 of its UK stores with a view to reducing costs via a Company Voluntary Arrangement (CVA) overseen by Deloitte.

David Scacchetti, chairman of Mamas & Papas, said: “While our international and wholesale businesses are performing strongly, the UK retail environment is the toughest I’ve experienced in the 30 years since we founded Mamas & Papas and it has become clear that we need to take action if we are to maintain our proud position as a brand trusted by parents across the world.

“We believe the proposals announced today will create a platform to allow us to continue offering innovative, premium products to customers in the UK and internationally, both in stores and online.

“Alongside the investment from BlueGem, the strengthened leadership team and the support of our colleagues, we are confident we are taking the steps necessary to protect the Mamas & Papas brand and help it to achieve its potential in the future.”

The CVA proposals relate to Mamas & Papas (Retail) Limited, the company which operates Mamas & Papas’ UK stores. Other companies in the group are unaffected.

A vote on the proposals put forward under the terms of the CVA will be held on 10th September, 2014.

Mamas & Papas was launched in 1981 by husband and wife team David and Luisa Scacchetti.

In an interview with The Yorkshire Post on Monday, Mr Lovelock vowed to regain the nursery brand’s premium position in the market by focusing on design and innovation and continuing overseas expansion.

Mr Lovelock, who until recently was chairman of Karen Millen and Aurora Fashions, owner of the Coast, Oasis and Warehouse brands, said: “I want to build on its strengths through unique and special product design. I am still a product person at heart and I want to re-establish Mamas and Papas at the centre of the market.”

Mamas & Papas has more than doubled store numbers in the past five years, including opening out-of-town sheds, which some say are at odds with its premium positioning.

In the year to March 31 2013, turnover rose 13 per cent to £108.2m. The group made a pre-tax profit of £340,000, an improvement on last year’s £1.5m loss.