Business

Ralph Lauren to close flagship Polo store in cost-cutting plan

Models pose for Autumn 2016 New York fashion week Image copyright Getty Images
Image caption Ralph Lauren designs for Autumn New York fashion week

Ralph Lauren is cutting jobs and closing offices and shops, including its 711 Fifth Avenue Polo store, as the company strives to reduce costs.

The fashion-to-homeware brand, known for its "preppy" look, expects to make $140m in annual savings as a result.

Faced with increased competition from fast-fashion retailers, the firm launched a cost-saving strategy in June.

It faces further uncertainty when its chief executive steps down in May.

Stefan Larsson had been in the role for less than two years when it was announced in February that he would be leaving, following differences between him and the company's founder and chairman Ralph Lauren. Mr Larsson outlined the broader restructuring programme nine months ago.

The company's share price fell more than 3.5% following the announcement.

'Optimising'

The fashion firm also said its e-commerce business would move to "a more cost-effective" platform in collaboration with online technology company, Salesforce, instead of being built in-house as originally planned.

The company did not say how many jobs would be lost, but last year it indicated around 1,000 jobs and 50 stores would be sacrificed in order to lower costs. The Fifth Avenue Polo store is the most high profile closure so far.

"The decision will optimise our store portfolio in the New York area and allow us to focus on opportunities to pilot new and innovative customer experiences," said chief financial officer, Jane Nielsen.

"The Polo brand remains strong, and we expect it to further strengthen as we continue to evolve the Polo product and marketing."

Americans are spending less on clothing and Ralph Lauren's sales have fallen over the last two years.

Online retailers which mimic catwalk fashion at high speed are challenging lower end luxury brands.

The company will take a $370m charge related to the plan.

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