Luxury fashion retailer Ralph Lauren Corp announced it would cut jobs, shut shops and reduce its real estate as part of a sweeping plan to lower costs and revive sales growth.
Ralph Lauren’s shares were down 10 percent at $86.50 in premarket trading on Tuesday.
The decision is a part of the fashion icon’s new turnaround plan, the details of which will be unveiled on by the company’s chief executive, Stefan Larsson.
The company said it would try to significantly reduce the time taken to manufacture its products and chop about three organizational layers to average about six layers to simplify its organizational structure.
According to Wall Street Journal, the retailer would close 50 mainly high-end shops and cut 8 percent of the company’s 15,000 full-time employees.
The company had about 493 directly operated retail stores and employed about 26,000 people, roughly 15,000 of who work full time as of April 2.
The retailer’s sales had fallen in every quarter in fiscal 2016, leading to a full-year sales decline of nearly 3 percent.
Ralph Lauren said it expects net revenue for the current fiscal year to fall in the low-double digit percentage range, hurt in part by store closures, a pullback in inventory receipts and weak traffic.
The company brought in Stefan Larsson late last year in the hope that he could replicate his success of reviving sales at Gap Inc’s Old Navy.
Ralph Lauren said it expects to record restructuring charges of up to $400 million and an inventory reduction-related charge of up to $150 million, mostly in the current fiscal year.
The company expects the restructuring measures to result in about $180-$220 million of annualized expense savings.