Ralph Lauren will eliminate jobs and shut its flagship Polo store on Fifth Avenue in New York City as part of a cost-cutting plan. Fred Katayama reports.
Ralph Lauren is cutting jobs and shutting down its flagship Polo store on Fifth Avenue in Manhattan. The luxury apparel retailer is also moving its e-commerce operations to Salesforce's Commerce Cloud. It said the changes will save the company about $140 million. But the stock plunged on the news. The closing of the Polo store and the job cuts are part of a bigger restructuring plan announced last June. At that time, Ralph Lauren said it would eliminate about 1,000 positions and close fifty stores to lower costs and revive sales growth. Jharonne Martis, director of consumer research at Thomson Reuters: (SOUNDBITE) JHARONNE MARTIS, DIRECTOR OF CONSUMER RESEARCH, THOMSON REUTERS, (ENGLISH) SAYING: "For nine straight quarters right now, Ralph Lauren has been posting negative earnings growth. We're looking at the next four quarters, the projections, it looks that there will be an improvement, but it still be negative. However, the way forward plan has been reducing its biggest cost, which is inventory levels, and we've already seen a significant improvement, and today's announcement that it's closing the stores, it's showing that at least the company is very serious about taking measurements about what it needs to in order to improve the financials." Like other luxury brands, Ralph Lauren has been struggling. Americans don't spend that much on apparel and accessories any more. Its margins have taken a hit from department stores discounts and competition from fast-fashion retailers such as H&M and Zara.