Ralph Lauren to close flagship Polo store as part of restructuring
Ralph Lauren Corporation announced on Tuesday several new steps the apparel company is taking as part of its “Way Forward” plan, including closing its dedicated flagship Polo store and moving its e-commerce platform.
Introduced last June by former CEO Stefan Larsson, the “Way Forward” plan was launched in order to strengthen Ralph Lauren’s business growth and profitability.
The newly announced initiatives are expected to result in approximately $140 million in annualized expense savings, in addition to the $180-$220 million of savings announced in June. Still, as a result of these new activities, the company expects to incur restructuring charges of approximately $370 million.
Among the new key actions, the company has announced plans to close its dedicated Polo store at 711 Fifth Avenue. Its products will instead be integrated into the Ralph Lauren Men's and Women's flagship stores on Madison Avenue and its downtown locations. The company will still continue to operate its seven additional store locations and its flagship Polo Bar Restaurant in New York City.
“The Polo brand remains strong, and we expect it to further strengthen as we continue to evolve the Polo product and marketing,” Jane Nielsen, Chief Financial Officer, assured. Adding that the decision to close “will optimize our store portfolio in the New York area and allow us to focus on opportunities to pilot new and innovative customer experiences.”
The company is expected to explore plans for new retail concepts and store formats, including leveraging its coffeehouse brand, Ralph's Coffee.
Furthermore, Ralph Lauren plans to move its e-commerce to a more cost-effective platform (Salesforce's Commerce Cloud), which will advantage total operating costs, but also provide a more “consistent customer experience” the company explains.
“We are looking carefully at the way consumers are shopping online and believe that shifting to the Salesforce Commerce Cloud platform will allow us to create a best-in-class solution more efficiently in all of our markets around the world,” says Nielsen.
In its last reported quarter, Ralph Lauren experienced decreases throughout the company. Net revenues in the third quarter fell 12 percent to $1.7 billion, while net income fell to $82 million. Fourth quarter and fiscal 2017 results will be announced in May.
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