Significant layoffs could be coming at Ralph Lauren Corp., according to industry sources.
Although the exact number couldn’t be learned, sources indicated the cuts would occur throughout the organization and some stores would be shuttered. The cuts could impact up to 10 percent of the workforce, said sources. Several longtime company executives are said to be affected.
A spokesman for Ralph Lauren declined comment.
It is believed that the job cuts are one part of a bigger restructuring plan that Larsson will divulge to modernize the company and make it leaner and more nimble.
This latest anticipated round of cost-cutting would come after last year’s 5 percent reduction in head count, or about 750 jobs, due to the company’s shift to a different operating model. Those cuts were expected to reduce annual operating expenses by $125 million, and the company took total charges of $142 million during fiscal 2016 and planned to incur additional charges of about $5 million during fiscal 2017.
During an earnings call last month, Larsson, who joined in November, said that the company needed to return to its core business. He said that, following a comprehensive review, “we have gained a very clear understanding of the underlying drivers of the current performance and we now have a detailed view of what’s driving the downward trend. In short, we have not focused enough on the core of what made us great in product, marketing and the shopping experience.” He added that the company has an “inefficient cost structure and organization that’s not nimble enough in the marketplace. What made us great was a crystal-clear focus on owning classic, iconic styles and putting an effortless twist to it to make it current and desirable.”
For the year ended April 2, Lauren’s net income declined 43.6 percent to $396 million on a 2.8 percent decrease in total revenues to $7.41 billion.
At the end of March, 2015, the company said it had 25,000 employees, consisting of 15,000 full-time staffers and 10,000 part-time workers. About 15,000 are located in the U.S., with 10,000 located overseas.
At present, the company has 493 directly operated stores, which includes 144 Ralph Lauren stores, 77 Club Monaco stores and 272 Polo factory stores. It also operates 583 concession shop locations worldwide. International licensing partners operate 93 Ralph Lauren stores and 42 dedicated shops, as well as 133 Club Monaco stores and shops.