Ralph Lauren stock dropped more than 10% in the first hour of trading.
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The changes are the first big moves from CEO Stefan Larsson, who replaced company founder Ralph Lauren in the role late past year.
A model presents a creation from the Ralph Lauren Spring/Summer 2016 collection during New York Fashion Week in New York, September 17, 2015.
It also relies on struggling department stores to drive sales.
The fashion icon will be shedding jobs and closing stores as part of its new turnaround plan, the details of which will be unveiled on Tuesday when the company’s chief executive, Stefan Larsson, speaks with analysts.
Ralph Lauren is down sharply on weak guidance, but traders are looking for a bounce in the next several weeks.
The retailer’s sales had fallen in every quarter in fiscal 2016, leading to a full-year sales decline of almost 3 percent.
Ralph Lauren’s stock lost almost 40% past year, and it’s down another 20% so far in 2016. This will including cutting jobs to reduce members of its management team. The new CEO is the former global president of Old Navy who has also held various positions at H&M during his 15-year tenure there.
Ralph Lauren is the latest retailer to announce cuts in stores and layoffs.
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.
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Larsson said on the webcast that the company’s “vicious cycle” of “unsustainable sales and profit growth” is going to “hurt the brand” unless it’s reversed. He said the company needed better discipline and a clearer path forward. As of April, it employed about 26,000 people around the world, 11,000 of whom are part-time workers.
