The fashion-design major Ralph Lauren plans to slash its North America office space by as much as 30% and close as many as 10 stores.
“Today we announced the second round of actions related to our fiscal 2021 strategic realignment plan,” Chief Financial Officer Jane Nielsen said on the New York company’s earnings call.
“This stage focuses on realigning our real estate footprint to our future strategic priorities. This includes first reducing our North America corporate office footprint up to 30% along with selected reductions in Europe and Asia.”
In addition, “the company is closing up to 10 retail locations globally, pending ongoing landlord negotiations,” she said.
Combined with the “successful” lease renegotiations completed year-to-date, “we expect these savings to drive improved profitability in our existing fleet, while we continue to expand our brand elevating ecosystems,” Nielsen said.
Ralph Lauren also plans to complete “the consolidation of our North American distribution center operations to drive greater efficiencies, improve sustainability, and deliver a better consumer experience with faster average delivery times and an increased focus on connected retail,” she said.
“Combined, these actions are expected to result in gross annualized highest pretax expense earnings of approximately $200 million to $240 million inclusive of our previously announced organization savings.”
Ralph Lauren shares recently traded little changed at $105.20.
Earlier, the company reported net income of $119.8 million, or $1.61 a share, for the fiscal 2021 third quarter ended Dec..26. That's down from $334.1 million, or $4.41 a share, in the year-earlier quarter.
The latest adjusted earnings per share hit $1.67, topping the FactSet analyst consensus of $1.63.
Revenue totaled $1.43 billion, down from $1.75 billion and missing the $1.47 billion consensus estimate.