Ralph Lauren announces a $140 million restructuring plan
Ralph Lauren (RL) stock slid 4.5% on April 4, 2017, as the fashion giant said it was considering newer approaches for its business like shutting old stores and focusing on expanding its e-commerce platform. The company said it plans to save $140 million annually by trimming its workforce and restructuring its digital operations.
RL announced the closure of its high-profile Polo store on Fifth Avenue. The store opened in 2014. It also announced entering a new agreement with Salesforce’s Commerce Cloud to efficiently move towards a more “cost-effective” and “flexible” e-commerce platform. These actions are a part of Ralph Lauren’s ongoing Way Forward Plan that aims to return the company to profitable growth.
Ralph Lauren’s CEO, Stefan Larsson, will be departing next month, and chief financial officer Jane Nielsen will lead the company until it appoints a new CEO.
Ralph Lauren’s financial performance
Ralph Lauren’s business has been under pressure, and the company has reported seven consecutive quarters of sales declines. Total revenue fell 12% YoY to $1.7 billion in the last reported quarter as the retailer recorded a 26% YoY decline in wholesale revenue and a 5% YoY drop in sales comps.
Looking at RL’s stock market performance and valuations
About Ralph Lauren
Founded in 1967, Ralph Lauren (RL) is one of the largest branded apparel companies in the US. The company is involved in designing, marketing, and distributing premium lifestyle products in four categories: apparel, home, accessories, and fragrances. Polo Ralph Lauren, Ralph Lauren Purple Label, Ralph Lauren Collection, Black Label, Lauren by Ralph Lauren, American Living, Chaps, and Club Monaco are some of the company’s well-known brands. The iShares Morningstar Mid-Cap Value ETF (JKI) invests 0.29% of its holdings in Ralph Lauren.
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