Ralph Lauren Corporation (NYSE:RL) of New York City revealed on Tuesday they are going to close down many corporate offices and store locations, including the flagship store on the Fifth Avenue. The struggling retailer also said many people will lose their jobs as the business cut costs to turn their financial fortunes around. They haven’t yet disclosed how many people are likely to lose their jobs, though.
In June last year, the company came out with an outline of what they call the Way Forward Plan”. The latest move is a part of this plan, where Ralph Lauren is trying to save $140 million in a year. The plan is going to be finalized by March 2018, so it will be only then that the full list of offices and stores to be closed will be revealed. However, they have already said at least 50 of their stores are likely to be closed down. The one-time restructuring is likely to cost the company $370 million.
Once the Polo store on Fifth Avenue is closed down, the unsold inventory is going to be moved to other locations across the city. Currently, Ralph Lauren runs seven stores and a bar restaurant in New York.
Exploring Other Retail Options
Ralph Lauren says they are exploring other retail options as well and trying to develop new formats for stores. The new strategy may include the Coffee brand. Their Way Forward Plan also includes restructuring the digital operations and shifting to a more flexible and cost-effective e-commerce platform. They already have an agreement with software provider Salesforce to achieve this. The new website will provide a more consistent experience to shoppers and visitors.
The company issued a statement saying, “Together, these actions are an important part of the Company’s efforts to achieve its stated objective to return to sustainable, profitable growth and invest in the future”.
Financial Troubles for Ralph Lauren
The upscale fashion retailer has had nine consecutive quarters of declines in sales. The overall revenue and profit have both come down. Stefan Larsson, the CEO, stepped down after having differences with the chief creative officer, and chairman. Larsson exits officially on May 1st.
Net revenue of Ralph Lauren (NYSE:RL) for the last quarter of 2016, including the critical holiday shopping season, has come down by 11.9% to $1.7 billion. The net income has declined by 37.4% to $82 million.