Marimekko - Company Announcement

MARIMEKKO IS TO REORGANISE ITS OPERATIONS IN FINLAND AND THE UNITED STATES

THE COMPANY IS ALSO SEEKING A NEW CREATIVE DIRECTOR

Marimekko Corporation, Stock Exchange Release 5.2.2014 at 8.25 AM

Marimekko is planning to carry out a reorganisation of its operations, which is
expected to result in the elimination of an estimated maximum of 65 jobs in
Finland and the United States. If implemented to its full extent, the
reorganisation will yield annual savings in costs estimated at roughly 2.5
million euros and an improvement in operating result. Marimekko has also
decided to initiate an international recruitment process to seek a new Creative
Director for the company. 

In accordance with its strategy, Marimekko has undergone a dynamic phase of
internationalisation and change in the past five years. The product
distribution network has been greatly expanded in all of the company's main
market areas: in the past three years, the number of Marimekko stores has grown
by around 60 percent and the number of company-owned stores has almost doubled.
New markets have been opened up in South Korea, China, Hong Kong, Taiwan and
Mexico. 

“In recent years, we have taken several very significant steps in our
internationalisation for a company of our size. In spite of the difficult state
of the global economy, we have built Marimekko into a global design company
with already more than 130 stores in Asia, Europe and North America. It is now
time to move into the next stage of our strategy, in which we seek a
significant improvement in profitability at the same time as our growth
continues,” says Mika Ihamuotila, President and CEO. 

“We are reorganising our operations to strengthen the competitiveness of our
business in the long term, and our goal is a more efficient organisational
structure. Unfortunately, this will mean initiating consultative negotiations
in Finland and reorganisations in the United States as well. We also want to
create even more attractive products for our international customer base. For
this reason, we are reinforcing our design unit by seeking a new Creative
Director with international experience,” says Mika Ihamuotila, President and
CEO. 

Consultative negotiations and reorganisation

Marimekko will initiate consultative negotiations on all operations in Finland
with the exception of the personnel at the textile printing factory in
Helsinki. Reorganisations will also be carried out in the United States. The
planned actions are expected to result in an estimated reduction of a maximum
of 65 personnel in Finland and the United States. The other offices outside
Finland are not within the scope of the reorganisations. 

In Finland, the need to downsize personnel is estimated at a maximum of 55
employees. In addition, part of the jobs in company-owned stores may be
converted to part-time positions or the agreed number of working hours may be
reduced as a result of the planned reorganisations. During the consultative
negotiations, it will be determined whether part of any personnel reductions
could take the form of pension arrangements or similar. At the end of 2013,
Marimekko had 502 employees, 378 of whom worked in Finland. The stores had 248
employees, 151 of whom were in Finland. 

The expansion of business in North America and the opening of company-owned
stores in the United States made it necessary to establish a new country
organisation in 2011. In the initial stage of the expansion, the country
organisation was led by the brand management specialist C2Group, whose contract
expired at the end of 2013. At the same time, a new country manager started
with the company. In the next few years, the main thrust will be on expanding
wholesale, and the country organisation will be adapted to this goal. 

Marimekko has six company-owned stores in the United States which are still
partly in the launching phase. The purpose of the stores is also to reinforce
the brand and to attract the interest in the company's products of high-quality
department stores and other retailers. Effort was put into developing the
stores' business last year, but in some of the stores improving profitability
has proven more challenging than forecast and sales have been weaker than
expected. Marimekko is negotiating for the termination of the lease on the
store in Beverly Hills and examining the possibility of moving the store to a
new location with better accessibility for the target public. 

In the United States, the planned arrangements are estimated to result in
eliminating a maximum of 10 jobs in the Beverly Hills store and the country
organisation. At the end of 2013, Marimekko had 55 employees in the United
States. 

“I am satisfied that our own stores in the United States have fulfilled their
important role as brand builders, have helped open doors to high-class
department stores and forge new partnerships both in North America and in other
international markets. Developing the business of the stores requires us to
take the long perspective and this year we are continuing this work. In the
next few years, the focus of our expansion in North America will be on
developing shop-in-shop partnerships,” says Mika Ihamuotila. 

International search for Creative Director

Design is the core of Marimekko's business. As part of a broader review of
operations, Marimekko has made the decision to initiate an international
recruitment process for a new Creative Director for the company. The aim is to
reinforce the international competitiveness of Marimekko's design management.
The current Creative Director Minna Kemell-Kutvonen resigns her membership of
the company's Management Group as of 5 February 2014 and continues with the
company in other design-related executive duties which will be specified later.
For the duration of the recruitment process, Chief Marketing Officer Tiina
Alahuhta-Kasko will handle the duties of the Creative Director with the
assistance of Kemell-Kutvonen. 

Press conference
A press conference on this stock exchange release and on the financial
statements bulletin will be held for the media and analysts today, starting
9.00 a.m., at Marimekko's flagship store in Helsinki at Pohjoisesplanadi 33. 

Further information
Address requests for interviews to Merja Paulamäki, Communications & IR Manager,
tel. +358 9 758 7473.

MARIMEKKO CORPORATION
Corporate Communications

Piia Kumpulainen
Tel. +358 9 758 7293
piia.kumpulainen@marimekko.fi

DISTRIBUTION:
NASDAQ OMX Helsinki Ltd
Key media

Marimekko is a Finnish textile and clothing design company renowned for its
original prints and colours. The company designs and manufactures high-quality
interior decoration items ranging from furnishing fabrics to tableware as well
as clothing, bags and other accessories. When Marimekko was founded in 1951,
its unparalleled printed fabrics gave it a strong and unique identity.
Marimekko products are sold in approximately 40 countries. In 2012, brand sales
of Marimekko products worldwide amounted to approximately EUR 187 million and
the company's net sales were EUR 88 million. The number of Marimekko stores
totalled 108 at the year end. The key markets are North America, Northern
Europe and the Asia-Pacific region. The Group employs around 500 people. The
company's share is quoted on NASDAQ OMX Helsinki Ltd. www.marimekko.com