Ralph Lauren to close more than 50 stores, cut 1,200 jobs
08 Jun 2016
US fashion brand Ralph Lauren plans to close over 50 stores and cut 1,200 jobs, as part of a cost-cutting drive that could bring in savings between $180 million and $220 million a year.
The New York-based company expects to incur $400 million in restructuring charges this year as well as $150 million in costs relating to stock reduction.
Ralph Lauren, known for its popular brands - Ralph Lauren, Polo and Lauren - will also have fewer layers of management in order to create a leaner business.
Stefan Larsson, president and CEO, who took over from founder Ralph Lauren in November last, presented the details of the plan at an investor and analyst meeting.
''We have assessed every value-creating component of the Company and, with our Way Forward Plan, we will build on our strengths, refocusing on our core brands and instilling a financial discipline that is highly focused on return on investment,'' said Larsson.
''We have a powerful, authentic brand with unique elasticity, and we will bring our Company to a stronger place than ever before by connecting our brand voice more closely to consumers and evolving our operating model. Our multi-year growth plan will lead Ralph Lauren – one of the few truly iconic brands in the industry – to profitable sales growth and long-term shareholder value creation,'' he added.
Like its luxury brands competitors, Ralph Lauren has been struggling amid low spending on luxury apparel and accessories.
In the year ended 2 April, Ralph Lauren's profit dropped by more than 22 per cent and its stock has fallen by nearly 48 per cent from its December 2014 high of $182.74.
Net revenues for the full year Fiscal 2016 declined by 3 per cent to $7.4 billion, while gross profit declined by 4 per cent to $4.2 billion, excluding restructuring charges of $20 million.
Ralph Lauren designs and markets premium lifestyle products, including apparel, home, accessories and fragrances.
The company's brand includes Polo Ralph Lauren, Ralph Lauren Purple Label, Ralph Lauren Collection, Black Label, Lauren by Ralph Lauren, RRL, RLX, Ralph Lauren Childrenswear, Denim & Supply Ralph Lauren, American Living, Chaps and Club Monaco.