The company said several layers of its management team will be trimmed and stores closed within the restructuring activities.
The restructuring moves are expected to save the brand up to $220 million annually and the New York-based company expects revenue to decline at a mid-single digit rate in the first quarter then to decrease sales at a low-double digit rate. To have this result it is to reduce inventory levels, close stores.
According to new Chief Executive Stefan Larsson, to fix problems that have weighed on the company’s financial results, the restructuring is the first significant step, as reported. The company includes too many brands and retail stores, and a reliance on department stores, where shoppers are hooked on discounts. The company also has bloated costs and inefficient sourcing.
The company said Tuesday that it expects to incur a charge of up to $400 million for its restructuring efforts, including a $150 million charge to liquidate excess inventory. Shares of Ralph Lauren fell roughly 7 percent in early trading.
Ralph Lauren will also get rid of three organizational layers to create a more “nimble” company and cut down on the time it takes to get items into stores. Shoppers can also expect changes to its product offerings, marketing and retail experience.
“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,” said Larsson.