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Sep 22, 2020

Ralph Lauren to cut 15% of jobs as retailer speeds shift to e-commerce

A selection of Ralph Lauren Corp. bath towels sit stacked on display stands inside a Galeria Kaufhof department store, operated by Hudson's Bay Co., in Berlin, Germany, on Wednesday, Dec. 6, 2017. Austrian property developer Rene Benko is taking a second run at consolidating Germany's dusty department stores, making an unsolicited bid for the Kaufhof chain now owned by Toronto-based Hudson's Bay. Photographer: Krisztian Bocsi/Bloomberg

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Ralph Lauren Corp. is trimming its workforce as the apparel maker accelerates plans to shift to more online sales.

The cuts will total 15 per cent of its workforce, or about 3,700 workers, according to a person familiar with the plans. The jobs are expected to be eliminated by the end of its fiscal year, which concludes in March.

The moves will result in pretax charges of US$120 million to US$160 million, the company said in a statement. Annual savings, starting in the company’s next fiscal year, are seen reaching as much as US$200 million.

The restructuring comes as Ralph Lauren struggles to cope with economic fallout from the coronavirus pandemic like most clothing retailers, with sales dwindling over the past two quarters. The company has declined to give guidance for its performance amid upheaval in consumer spending.

“The changes happening in the world around us have accelerated the shifts we saw pre-COVID, and we are fast-tracking some of our plans to match them -- including advancing our digital transformation and simplifying our team structures,” said Patrice Louvet, President and Chief Executive Officer.

In August, Louvet said management was undertaking a review of the organization, including team structure and its corporate office real estate footprint.

Ralph Lauren shares rose as much as 4.9 per cent in New York trading on Tuesday. The stock fell almost 40 per cent this year through Monday’s close.