Marc Jacobs reduced its headcount across design and other corporate departments in recent weeks as fallout from the coronavirus and disappointing sales in the months prior caused the LVMH Moët Hennessy Louis Vuitton-owned brand to cut costs.
According to multiple sources, the brand cut around 60 jobs, including relatively recent high-profile hire Olympia Le-Tan, who relocated to New York from Paris to lead Marc Jacobs’ lower-priced line, The Marc Jacobs. Sources say all that remains of Marc Jacobs’ design department is a skeleton runway collection staff and a handbag design department, perhaps a nod to the future of the label as one that is accessory-focused.
A company spokesman said cuts represent less than 10 percent of the brand’s overall headcount, including retail associates. He issued the following statement: “Given the substantial impact of COVID-19 on the retail industry, we have made targeted changes that allow Marc Jacobs International to adapt to the evolving environment and continue forward on our path to refocus the business and highlight the creative innovation that has always defined our brand. This included making the difficult decision to eliminate certain roles and, for a small number of employees, reducing responsibilities.”
A source added that employees were notified of their firings in individual Zoom calls that lasted less than five minutes. Many of those laid off had relocated to New York from Europe to work for Marc Jacobs, and were promptly left without visa sponsorship or a way to return to their home countries as borders remain closed. Marc Jacobs extended 60 days of health insurance to employees beyond their termination date, according to a source.
LMVH itself is understood to be in the midst of cutting costs and is mulling whether or not to move forward with its $16.2 billion takeover of Tiffany & Co.
The decision to cut Marc Jacobs’ diffusion label design team represents another change in strategy for the brand, which has swung back-and-forth between renewed focuses on luxury or lower-price accessories over the past five or so years.
It is understood that executives initially saw The Marc Jacobs line under Le-Tan’s stewardship as a path forward for the company, and projected it would eventually comprise up to 85 percent of sales. Le-Tan shaped the label, which launched in May 2019, as a quirky nod to Jacobs’ early design years. Products ranged from $95 to $1,200, and included partnerships with emblematic brands like The Peanuts, New York magazine and the Four Seasons Hotel.
The Marc Jacobs was given a global rollout and prominent space at the brand’s Madison Avenue flagship, as well as department store partners like Le Bon Marché and Isetan. A source said the brand will now fall under the responsibility of the Marc Jacobs runway design team. In 2018, former Baja East designer John Targon was hired to develop a diffusion collection for Marc Jacobs, but his stint at the label lasted less than three months and the line never officially launched.
A source said that under Le-Tan’s tutelage, The Marc Jacobs encountered roadblocks, including low budgets and disagreements with the company’s internal merchandising team, which opted to push commercial product that was not too different from what is already available in the wider fashion market.
Another source noted that while the Marc Jacobs design staff was hard hit by layoffs, most retail employees have still been receiving a majority of their pay during coronavirus lockdowns.