Those anticipated savings are in addition to the annual $180 million to $220 million it announced in June.
"The Fifth Avenue store probably wasn't planned to be profitable to begin with and was used to raise awareness of the brand", said Chen Grazutis, an analyst at Bloomberg Intelligence. That includes the Polo label. However, the restructuring moves will cost the company about $370 million, mainly from employee severance charges, lease termination fees and inventory related costs.
"The Polo brand remains strong, and we expect it to further strengthen as we continue to evolve the Polo product and marketing".
Ralph Lauren opened the flagship in mid-2014 after signing a lease the year before for a 15-year term that set the yearly rent at $25 million, real estate sources said. It's located a block away from Trump Tower, in the heart of a Fifth Avenue shopping district that has seen a downturn in foot traffic thanks to the added security, especially when President Donald Trump was in the city before his inauguration.
Ralph Lauren has struggled with declining sales and sharply reduced earnings in recent quarters.
Strong Storms Possible Friday
A warm front will move northward through the area during the day, a trailing cold front will move through Monday night. Another round of thunderstorms looks likely for Wednesday, and some of those could be on the strong to severe side.
"We continue to review our store footprint in each market to ensure we have the right distribution and customer experience in place", Nielsen said.
"The decision will optimize our store portfolio in the NY area and allow us to focus on opportunities to pilot new and innovative customer experiences", she added.
Ralph Lauren is shuttering its high-profile Polo store on Fifth Avenue, less than three years after the retail space was opened.
Looking at new concepts, Ralph Lauren plans to dabble with its Ralph's Coffee model and other store formats.
The decisions come as part of the U.S. apparel giant's Way Forward Plan, created to restructure the business and build the brand to its full potential. Nielsen will drive the company's strategy until a new CEO is named.
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