Ralph Lauren CEO: 'Job cuts were tough decision'
Stefan Larsson admits fashion house Ralph Lauren had to make “tough decisions” in the wake of cutting 1,000 employees.
It was announced on Tuesday (07Jun16) that all-American brand Ralph Lauren would be making the severe cuts, which amount to eight per cent of its workforce, and will be closing 50 full-price stores. Industry forecasters predict the measures should save Ralph Lauren between $180 - $220 million a year (£123 - £151 million), and that the company should stabilise by 2018, but Chief Executive Officer (CEO) Larsson says the decision wasn’t taken lightly.
“We had to make near-term tough decisions,” he told the New York Post.
A new plan has been developed over the last six months by Larsson, which involves reducing the time it takes to develop new fashion from 15 months to nine. The strategy also involves partnering with wholesale distributors, selling more full-price products and focusing on the brand’s main labels Ralph Lauren, Polo and Lauren.
Diffusion brands Chaps, Black Label and RLX aren’t being culled, though focus is being shifted back to the main labels.
“We are keeping all the brands, but moving more resources to the core brands,” assured Larsson.
Tuesday’s announcement was made at the fashion house’s first investor day, where it was noted the company had become “undisciplined” in its expansion of both stores and brands.
Label founder Ralph Lauren said Larsson has his full support, adding he is “entrusting (his) baby with him” and that he is proud of his work.
“Yes, did we drop the ball? Make some things wrong? Absolutely,” Lauren continued. “I’m not happy about it but I believe in this company and that we have a handle on what style is.”