Clothing manufacturer and retailer Baltika Group, which operates five clothing brands in the Baltics, is merging its Mosaic and Bastion brands with Monton as well as shutting down its two production units in Estonia, laying off 340.

"Instead of international growth, we will continue focussing on sales in [our] Baltic markets, simplifying business processes, and reducing operating costs," AS Baltika CEO Meelis Milder said in a press release on Monday. "Cost savings [will] come from dissolving production in the Estonian production units, reducing the number of brands, and ending several loss-making activities, which also means ending cooperation with our Russian franchise partner."

"Baltika's current business model is expensive and the share of fixed costs high, which makes it difficult to respond to external factors and demand," Mr Milder explained. "At the end of last year, we started planning for strategic change. The strong and courageous operating and financing plan for the coming years will hopefully give our employees, customers, partners and shareholders the necessary signal that Baltika is changing. I think it's the best plan for turning a profit."

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