Ralph Lauren Corp.’s pandemic push has included a drive to bolster its digital presence and boost prices — and now the company is also slimming down its store and corporate office profile.
The real estate realignment is the latest part of chief executive officer Patrice Louvet’s plan to come out of the COVID-19 crisis stronger.
“We’re making good sequential progress,” Louvet told WWD in an interview, noting the company has continued to push on its many objectives, from turning up the brand heat with collaborations and online efforts to operating with efficiency.
Ralph Lauren’s fiscal third-quarter profits declined 64 percent to $119.8 million, or $1.61 a diluted share, from $334.1 million, or $4.41, a year earlier. Adjusted earnings of $1.67 a share came in 4 cents ahead of the $1.63 Wall Street had penciled in.
Revenues for the three months ended Dec. 26 fell 18.2 percent to $1.43 billion from $1.75 billion a year earlier.
The company said it plans to “further right-size and consolidate its global corporate offices,” reflecting a smaller workforce and a continuation of some of the working routines developed during the pandemic.
Stores could also be closed.
The firm renegotiated lease terms across its fleet and had pinpointed 10 stores that could close through fiscal 2022, pending ongoing negotiations.
Ralph Lauren also said it plan to consolidate its North America distribution centers to drive efficiencies.
“Despite the disruptions and uncertainty we faced throughout our third quarter, our teams continued to elevate our brands and effectively engage with consumers around the world — delivering better than expected gross and operating margins through the holiday period, and continuing to meaningfully improve our digital profitability,” Louvet said in a statement. “We remain focused on emerging from this period in a position of strength as we invest in key areas like our digital transformation, while taking a disciplined approach with expenses and ensuring we have the right resources, footprint and brand portfolio to support future growth and value creation.”
The company said sales through its own digital channels increased by 10 percent in North America, but were up by more than 70 percent in Europe and Asia.
Average unit retail prices increased 19 percent compared with a year ago with double-digit gains in North America and Asia.
Executive chairman and chief creative officer Ralph Lauren said: “For more than 50 years we have stayed true to a set of values that define us — among them timelessness, quality, perseverance and optimism. And in this period of great challenge and change, it is these values that are enabling us to authentically and deeply connect with our consumers around the world.”
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