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Ralph Lauren's shares were down 10 percent at $86.50 in
premarket trading on Tuesday.
The company said it would try to significantly reduce the time
taken to manufacture its products and chop about three
organizational layers to average about six layers to simplify
its organizational structure.
Ralph Lauren did not say how many employees would lose their
jobs or how many stores it would close, but the Wall Street
Journal said the retailer would cut 1,000 full-time jobs and
close 50 mainly high-end shops. (http://on.wsj.com/1PDCi9H)
The company had about 493 directly operated retail stores and
employed about 26,000 people, roughly 15,000 of who work full
time as of April 2.
The retailer's sales had fallen in every quarter in fiscal 2016,
leading to a full-year sales decline of nearly 3 percent.
Ralph Lauren said it expects net revenue for the current fiscal
year to fall in the low-double digit percentage range, hurt in
part by store closures, a pullback in inventory receipts and
weak traffic.
The company brought in Stefan Larsson late last year in the hope
that he could replicate his success of reviving sales at Gap
Inc's <GPS.N> Old Navy.
Ralph Lauren said it expects to record restructuring charges of
up to $400 million and an inventory reduction-related charge of
up to $150 million, mostly in the current fiscal year.
The company expects the restructuring measures to result in
about $180-$220 million of annualized expense savings.
(Reporting by Subrat Patnaik in Bengaluru; Editing by Savio
D'Souza)
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