Ralph Lauren to cut more jobs, close flagship Polo Fifth Ave store
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Ralph Lauren, the American clothing line known for its preppy Americana, has on Tuesday announced more job cuts and store closures as the struggling retailer steps up its restructuring efforts.
The move – which will it reduce its workforce further and close certain corporate offices and stores including its flagship Polo store at 711 Fifth Avenue – is part of the Way Forward Plan that was the brainchild of outgoing chief executive Stefan Larsson.
The company expects the decisions, together with actions to continue to streamline the organisation, cost structure and real estate portfolio to result in about $140m in annualised savings, which the company expects to reinvest for future growth, and come on top of the $180m to $220m in annualised expense savings announced last year.
The company expects to incur restructuring charges of about $370m.
Ralph Lauren like other retailers has seen its business hurt by a rise in online shopping and competition from fast fashion names like H&M and Zara that mimic runway looks for a fraction of the cost.
Ralph Lauren said it will also improve its e-commerce platform through a collaboration with Salesforce’s Commerce Cloud and explore new retail concepts and leverage its Ralph’s Coffee to develop new store formats. Retailers have been pushing into the food sphere as they seek growth with Urban Outfitters buying the Vetri Restaurant business.
The news comes as Mr Larsson is expected to depart the company in May after clashing with the company’s 77-year old founder. Under the “Way Forward Plan” Ralph Lauren had in June announced an 8 per cent reduction to its workforce and unveiled plans to shutter underperforming stores and its Denim & Supply line to focus on core products. It had also removed three layers of management to better streamline its operations.
Ralph Lauren shares, which are down nearly 10 per cent so far this year, rose initially but were down 1.3 per cent at pixel time.