Retailer Ralph Lauren to cut costs, reduce real estate assets

According to Zacks Investment Research, “Ralph Lauren Corporation is engaged in designing, marketing, and distributing men’s, women’s and children’s apparel, accessories, fragrances, and home furnishings”. It operates in three business segments: Wholesale, Retail and Licensing. This has led the popular American fashion house to lose more than 50% its market value since 2013.

Up to Monday’s close of US$96.33, the stock had fallen almost 14 per cent this year.

In a historical change-up, the company switched hands in September when Lauren, 76, relinquished his CEO title and handed it off to Larsson.

While speaking at the company’s first-ever meeting with analysts and investors, Larsson stated that fixing problems in the wholesale sales chain, mainly sales to department stores, was his top priority, as reported by The Wall Street Journal. Meanwhile department stores remain in a slow, downward spiral. M, which generally embark on discounts to clear inventory, has lowered its profits. The company also has bloated costs and inefficient sourcing.

The company’s brand includes Polo Ralph Lauren, Ralph Lauren Purple Label, Ralph Lauren Collection, Black Label, Lauren by Ralph Lauren, RRL, RLX, Ralph Lauren Childrenswear, Denim & Supply Ralph Lauren, American Living, Chaps and Club Monaco.

Ralph Lauren said yesterday it would try to reduce the time taken to get new products to shelves to nine months from 15. The insider owns 453,949 shares which have current market value of around $42698443.LARSSON STEFAN is another major inside shareholder in the company.

In morning trading, the stock fell 9% to $87.

As a result of its Way Forward Plan, Ralph Lauren expects to stabilize performance in fiscal 2018 and pivot to growth off of a smaller, more profitable base in fiscal 2019, with improving operating margins in both fiscal years. The company highlighted that these savings are in addition to the $125 million annual savings related to its fiscal 2016 restructuring plans. “These charges are expected to be substantially realized by the end of fiscal 2017”, the firm said, in a statement.

The FQ1 tax rate is estimated to be approximately 29%.

For the current quarter, it expects revenue to fall in the mid-single digits and fall in the low double digits for the year.

Layoffs could affect 10% of the company’s workforce, including several longtime executives, according to sources who spoke with Women’s Wear Daily.