Ralph Lauren to cut workforce, invest more on online sales

FILE PHOTO: A security guard stands outside the Ralph Lauren store during the outbreak of the coronavirus disease (COVID-19), in Beverly Hills, California, U.S., July 30, 2020. REUTERS/Mario Anzuoni

(Reuters) – Ralph Lauren Corp RL.N has decided to cut its global workforce by the end of its fiscal year as part of a company-wide restructuring to focus more on online sales, it said on Tuesday.

The company did not respond to a request for comment on how many employees were likely to be affected by the plan.

The COVID-19 health crisis has hammered demand for high-end handbags, apparel and accessories in retail stores, forcing luxury goods companies to slash costs and slow brick-and-mortar expansion plans.

However, their e-commerce sales have surged. Ralph Lauren said it would invest in digital platforms to support e-commerce operations, expand product personalization and add new features like augmented reality. It will also move some human resource and planning systems to online cloud platforms.

The luxury apparel maker said the layoffs are expected to result in gross annual pre-tax savings of about $180 million to $200 million. It expects to incur one-time pre-tax charges of about $120 million to $160 million in fiscal 2021.

The company’s shares were up 1% in early trading.

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