Ralph Lauren shares fell 4% Tuesday after the company announced plans to close its flagship Polo store on Fifth Avenue, and reduce its workforce by an unspecified number.
After the 711 Fifth Ave. location closes on April 15, Ralph Lauren executives said they plan to integrate their products in its Ralph Lauren men's and women's flagship stores on Madison Avenue, and other locations throughout Manhattan.
The closure is part of the NY fashion company's plan to save $140m annually. It opened the first of those locations in its Polo flagship in 2014. They are in addition to efforts past year to cut costs by $180 million to $220 million. Other Polo Stores around the country will remain open. However, the restructuring moves will cost the company about $370 million, mainly from employee severance charges, lease termination fees and inventory related costs.
"We continue to review our store footprint in each market to ensure we have the right distribution and customer experience in place", Nielsen said. The company recently announced that CEO Stefan Larsson will leave the company as of May 1 due to creative differences with founder and chairman Ralph Lauren. According to Ralph Lauren, the new solution is expected to deliver a more consistent customer experience across the global digital ecosystem, with an advantaged total operating cost.
The moves are the latest as the retail industry responds to the consumer shift to e-commerce that has led many to conclude that the USA brick-and-mortar retail footprint is too big. Items from the store will be moved to its other NY stores.
Despite cutting costs, Ralph Lauren reportedly has plans to explore "new retail formats", including the expansion of Ralph's Coffee.