Ralph Lauren Will Cut Down Heavily And Shut Down Shop.

The US luxury goods retailer, Ralph Lauren, announced on Tuesday that the company will plan to lay off a large number of shops and close a certain number of stores in order to reduce operating costs and boost sales growth. The company said it will strive to shorten the production cycle and streamline the management structure.

The US media commentary means that under the leadership of CEO Stefan Larsson, Ralph Lauren will be pformed into a fashion brand similar to H&M and ZARA, which has been an executive at fast fashion H&M and Old Navy, and joined CEO in October last year.

Ralph Lauren has declined in every quarter since its 2016 fiscal year, resulting in a year-round drop of nearly 3% in sales.

The company official revealed that the negative impact of the closing stores, inventory backlog and the weak flow of physical stores, business is expected to be more difficult this year, and net revenue will double digits.

As of April 2nd, the net profit of Ralph Lauren declined by 43.6% to US $396 million in 2015, and total revenue decreased by 2.8% to US $7 billion 410 million.

Ralph Lauren's share price fell 30% last year, and its share price fell further to 2% US $94.38 as of Tuesday afternoon.

The company has not disclosed

And the number of closures, but according to an analysis, the company will cut 1000 employees and close 50 high-end consumer stores.

At present, the company has 493 direct retail stores. By the end of April 2nd, the total number of employees was 26 thousand.

In recent months, sales of luxury goods have almost declined, and Ralph Lauren has been faced with severe challenges in clothing and accessories inventory.

Stefan Larsson said in an interview that the company will focus on developing its three main classic brands: Ralph Lauren, Polo and Lauren.

In fact,

Organizational change began in February last year. At that time, the company said that the new brand management and operation mode would save us $100 million a year, and Ralph Lauren had laid off 750 people in May last year due to the pformation of the company's operation mode.

Some analysts believe that the layoffs are only part of the Ralph Lauren streamlining plan.

The mechanism makes Ralph Lauren's design and production cycle more than one year, and now the fashion industry with the highest speed is outdated.

Stefan Larsson explained that the company hopes to simplify the operation management mechanism and make Ralph Lauren a more modern clothing brand.

The reform, named "forward plan", was led by CEO Stefan Larsson. He said that the company needed a new business mode to regain the market share, that is, the pformation of the company's business mode to fast fashion. The company expects that the restructuring cost will reach 400 million dollars, and the related cost of cleaning up inventory will reach US $150 million, but the company expects to save 180 million to 220 million dollars a year for the company after the reorganization is completed.

Stefan Larsson said last month in the financial report telephone conference that Ralph Lauren should return to its core business and make a comprehensive review of the company's structure. He pointed out that the company's "forward plan" will further contact with consumers. He also stressed that only a streamlined and efficient corporate structure can make Ralph Lauren's classic style and quality products reborn.

Stefan Larsson, 42 years old, has been the OLD NAVY global president of the GAP group's popular fashion brand in the past 3 years, leading the company's revenue growth in 2014 to 8%, reaching 6 billion 620 million US dollars and leaps to the most profitable brand of GAP group.

Prior to that, he spent 15 years in the Swedish parity clothing brand H&M, helping the company expand its global business territory to 44 countries, and its annual turnover increased by 5 times to 17 billion dollars.