"The rent is probably one of the highest for them, and at some point it's hard to justify it".
Shares (Berlin: DI6.BE - news) of Ralph Lauren fell 2.8 percent to $79.13 in mid-morning trade. However, the restructuring moves will cost the company about $370 million, mainly from employee severance charges, lease termination fees and inventory related costs. The changes are expected to save $140 million a year by their completion, which is slated for the end of the next fiscal year in March. The closures in NY represent the next step in that turnaround, CFO Jane Nielsen said in a statement Tuesday, indicating that the company can't ignore the pull of e-commerce. At least 1,000 jobs have been eliminated and 50 stores have been closed.
The company refused to disclose the details of the plan. It is also selling less merchandise to department stores, which have hurt the brand through heavy discounting.
How that affects the Polo Ralph Lauren Factory Store at Williamsburg Premium Outlets, if at all, is not clear.
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"We continue to review our store footprint in each market to ensure we have the right distribution and customer experience in place", Ralph Lauren's Nielsen said in a statement. Though the brand's flagship store on Fifth Ave.in Midtown Manhattan will be closing its doors on April 15, there are seven other store locations in the city that will remain.
Soon after, the company opened the nearby restaurant, The Polo Bar, which it will continue to operate.
And the news comes at a very bumpy juncture for Ralph Lauren: the iconic American fashion company's CEO wunderkind Stefan Larsson, the man who had earlier turned H&M and Gap Inc's (gps) Old Navy into retail behemoths, is leaving the company in May after only 18 months in a previously announced departure.
Updates with analyst's comment in the fourth paragraph.