Ralph Lauren is the latest in a long line of retailers to shut brick and mortar stores as the online shopping revolution shows no signs of abating. Ralph Lauren Corp. announced a cost-cutting plan on April 4 that would cut jobs and shutter the flagship Polo store on Fifth Avenue in New York City, along with other office and store locations.
Ralph Lauren also said it would integrate the products and clothes from the famous Fifth Avenue store into the Ralph Lauren men’s and women’s stores on Madison Avenue, and its downtown New York locations.
The company says it anticipates incurring about $370 million in charges and a savings of around $140 million from the new cost-cutting measures. These are part of a plan announced in June 2016 that said the fashion retailer would cut 1,000 jobs and close 50 stores in order to lower costs and help sales growth.
“The Fifth Avenue store probably wasn’t planned to be profitable to begin with and was used to raise awareness of the brand,” Chen Grazutis, an analyst at Bloomberg Intelligence told Crain’s New York. “The rent is probably one of the highest for them, and at some point it’s hard to justify it.”
Ralph Lauren has been having trouble for awhile, and this high-profile store closure comes just two months after the sudden announcement that Stefan Larsson, the CEO, would leave the fashion house. Larsson had been hired to lead Ralph Lauren’s turnaround but found that he and Ralph Lauren himself had clashing ideas on how to do that. CFO Jane Nielsen, who was previously an executive at Coach Inc. will be taking over as acting CEO until Lauren finds a new leader.
“We continue to review our store footprint in each market to ensure we have the right distribution and customer experience in place,” Nielsen said in a statement Tuesday.