Ralph Lauren Corp. is closing its Polo store on Fifth Avenue in New York and reducing its corporate workforce.
The moves are part of the company’s “Way Forward Plan,” which was introduced by former chief executive officer Stefan Larsson last year.
Ralph Lauren will also move its current digital operation to a less expensive and more flexible digital platform.
The company said it expects these moves to be wrapped up by the end of March 2018 and to result in annual cost savings of about $140 million. However, the restructuring moves will cost the company about $370 million, mainly from employee severance charges, lease termination fees and inventory related costs.
Ralph Lauren opened the flagship in mid-2014 after signing a lease the year before for a 15-year term that set the yearly rent at $25 million, real estate sources said.
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The Polo product from the store will be integrated into the Ralph Lauren men’s and women’s flagship stores on Madison Avenue, as well as the brand’s other locations in downtown New York.
Meanwhile, Ralph Lauren will continue to “explore new retail concepts, including Ralph’s Coffee, and develop new store formats that connect the brand to loyal and new customers,” the company said.
“These are important actions we are taking to continue our evolution and deliver on the Way Forward commitments we made in June,” said Jane Nielsen, chief financial officer. “We are looking carefully at the way consumers are shopping online and believe that shifting to the [new digital] platform will allow us to create a best-in-class solution more efficiently in all of our markets around the world.”
While the company said it will continue to operate its seven remaining New York stores, Nielsen noted that Ralph Lauren will “review its store footprint in each market to ensure we have the right distribution and customer experience in place.”
“The decision will optimize our store portfolio in the New York area and allow us to focus on opportunities to pilot new and innovative customer experiences.
The Polo brand remains strong, and we expect it to further strengthen as we continue to evolve the Polo product and marketing,” Nielsen said.
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