How many jobs are likely to be lost at Vie Vitale? What is Vie Vitale’s strategy concerning its shops?

(A = Alex    S = Sophie)
A: Job losses are expected at the Manchester plant of the beauty products manufacturer, Vie Vitale, Sophie Jones has been following the story and is in our Manchester studio. Good morning, Sophie.
S: Good morning, Alex.
A: So, job losses, Sophie? How are things going? We’ve been hearing reports of up to 300 jobs going.
S: Well, if Vie Vitale does go ahead with restructuring and that includes the disposal of its manufacturing base, then as many as 200 of the 500 jobs here are far from guaranteed.
A: And where exactly will these cuts be made, Sophie?
S: Well, most would almost certainly be in the manufacturing division. This is an area Vie Vitale wants to get out of completely. And if this happens, then it would have serious consequences for jobs in distribution. However, the company wants to focus on its product development, so there’s unlikely to be any losses there. At least, that’s what the company’s saying this morning.
A: So very little good news there. But why should the company suddenly find itself in such a difficult position?
S: Well, the health and beauty retail sector is still as fashionable as ever and has attracted a lot of new companies to the market. The sad truth is, though, that these new companies now have equally good if not better ideas at the same kind of price. And I think this is the fundamental problem. And last year, La Face, the French manufacturer, brought out a new range again, very similar types of products, very similar sorts of ideas.
A: So how well are La Face doing?
S: Well, actually, they haven’t been doing that well either. In fact, only last week they announced they’re no longer going to focus on their own retail outlets, but rather on the mail order side of the business instead. They’re also considering selling through department stores, but nothing’s been confirmed yet. So Vie Vitale isn’t alone in feeling incredible pressure.
A: Well, it sounds like the problem they’re all having is that it’s getting quite crowded. So what does all this mean for Vie Vitale’s share price?
S: Well, if we look at the share price over the last year, you can see that although it started high at the beginning of the year and looked steady in the first six months, there’s been a huge drop since then, reaching its lowest point last week where the City really lost confidence in what they were doing.
A: Right. Now, Vie Vitale’s corporate image used to be unique, didn’t it? So how are they planning to establish themselves as the market leader once more?
S: Well, Alex, they’re not giving away too many details just yet, but it seems they’re intending to refresh up their shops and update their corporate look. You know, all their packaging. There’s certainly no news of any new product lines or any change in their basic values.
A: But what about the number of shops? Any change there, Sophie?
S: Well, in fact, what they’re doing is buying franchises back. They feel that if they’re in control of their shops, they’re in control of their corporate image. We’ve heard nothing about shop closures.
A: So how many of their shops do they now own?
S: Well, they started the process a few months ago and they’ve now regained control of all their French outlets, and they should have ownership of all their German shops by early next year. As there are more outlets in the UK, it’ll take a bit longer here. I think the name of the game is definitely going to be control.