In a move to try to revitalize the struggling retailer, Ralph Lauren’s CEO Stefan Larsson announced plans to shutter at least 50 stores, cutting about 1,000 employees in the process.
The restructuring, part of the company’s “Way Forward Plan”, is believed to help Ralph Lauren save $220 million over the coming year, while creating a more streamlined business with fewer moving parts.
Other internal corporate goals include trying to cut inventory, while enhancing the trendiness of the items that Ralph Lauren does carry in stock. Fast fashion brands, like H&M and Zara, have stolen much of the market that Ralph Lauren had once owned.
The current wave of dismissals will affect about eight percent of Ralph Lauren’s total workforce. This figure does not include an additional five percent of employees who were let go in the previous fiscal year.
Larsson’s announcement comes amid turmoil within the corporation. Its profit has dropped more than 22 percent from a year ago, and its stock has fallen 48 percent from its zenith in December 2014.
Founder and longtime CEO Ralph Lauren stepped down from his post last September.
The Way Forward Plan is a long-term gamble, with Ralph Lauren not believed to reach profitability again until its 2019 fiscal year. The plan’s implementation is expected to incur $400 million in initial expenses— $95 million in severance and benefits, along with $205 million in lease termination and store closure costs.