Loewe AG sees layoffs

Additionally, the consortium of banks working with Loewe agreed to support Loewe’s restructuring. The financing partners made a firm commitment to extend the credit lines until March 31, 2014, subject to compliance with predefined terms. They also agreed to give favorable consideration to continuing the financing beyond that date. Effective April 1, 2013, a total of 180 positions will be eliminated across all of Loewe’s divisions. “This means we have managed to stay well below the announced scope,” commented CFO Rolf Rickmeyer, who is responsible for the restructuring. The largest group affected by the cuts is production, where a total of 130 employees will be let go. In connection with other measures, such as mutual contract terminations and part-time agreements, the company was able to keep the number of operational layoffs within reason. Loewe founded a transfer company in order to make the staff cuts socially acceptable. The objective of this company is to ensure prompt placement in new jobs, among other things by offering programs for skill development and candidate training. The transfer company will start operation on April 1, 2013, to ensure a seamless transition. It will operate for one year. “Loewe has set aside a figure in the single-digit millions for this voluntary social service. The Federal Employment Agency is actively involved,” Rickmeyer went on to say. In addition to a reduction of monthly salaries by up to 10 percent, the restructuring agreement calls for a postponement of collective pay increases until 2014. Furthermore, vacation and Christmas bonuses were settled with a lump sum. The collective restructuring agreement remains in effect until the end of 2014 and also includes provisions for profit sharing if the business situation improves. At the same time, Loewe is retaining a needs-based training quota. “In connection with the strategic realignment of the company, Loewe will continue to invest heavily in new product technologies,” said Loewe’s new CEO Matthias Harsch. The new television lines Loewe Reference ID and Loewe Individual launched at the turn of the year will be joined by another new TV line in the summer. Additionally, the Audiodesign segment will be systematically expanded with a number of new products this year. The first highlight, the new, wireless audio system 3D Orchestra, will come to the market in April as a global innovation. The 3D Orchestra system makes a perfect 3D sound experience possible anywhere in a room regardless of the position of the loudspeakers. As part of the new sales strategy, Loewe is once again concentrating on its old strengths with the goal of reclaiming lost market share in Germany together with its qualified retail partners. Among other measures to accelerate the company’s internationalization efforts, master agreements have been concluded with retailer cooperatives and the sales organization has been restructured. “We have created the conditions for the necessary restructuring and realignment of the company,” said Matthias Harsch.