Ralph Lauren Restructuring And Restructuring To Get Rid Of Slump

Faced with the sluggish global department store industry, Ralph Lauren, which is overly dependent on wholesale channels, is eager to get rid of this dilemma through restructuring and restructuring. After ushering in the new CEO,

The situation has begun to improve slowly.

In the three months ended July 1st, sales of Ralph Lauren were affected by the downturn in the US retail industry, down 13.2% to 1 billion 350 million US dollars compared with the same period last year. However, under the effective cost control measures, the loss of profit was 59 million 500 thousand yuan, and the net loss was 1 billion 350 million US dollars in the same period last year.

The picture shows Ralph Lauren's regional performance data in the first quarter.

By Region:

Sales in North America decreased by 17% to $710 million compared with the same period last year, while same store sales fell by 8%, while the electricity supplier channel dropped 22%.

European regional sales also recorded double-digit declines, down 14% to 323 million US dollars compared with the same period last year.

Sales in Asia also fell by 1% to $209 million, while same store sales decreased by 2%.

Sales in other parts of the world decreased by 2.7% to $104 million 800 thousand compared to the same period last year.

Although Ralph Lauren has slashed its wholesale channel business, the Group expects to reduce 20% to 25% of us department stores' poor sales outlets in the second half of this year.

As of the end of the reporting period, Ralph Lauren has 1354 sales outlets worldwide, including 467 direct outlets, 164 licensed stores and 723 department stores.

It is noteworthy that, at the beginning of this year, the original CEO Stefan Larsson of Ralph Lauren was dismissed for 14 months because of differences in management philosophy with the chairman and chief creative officer Ralph Lauren.

Subsequently, Ralph Lauren appointed Procter & Gamble in the reporting period.

Patrice Louvet, the chief executive of the makeup department, is the new CEO of the group.

The improvement of brand performance has something to do with the appointment of new CEO.

According to the world clothing and shoe net, Patrice Louvet will receive a $3 million 400 thousand contract signing fee with a basic salary of not less than 1 million 250 thousand US dollars, and is eligible to participate in the Ralph Lauren bonus scheme. It will receive an annual equity award of $7 million 500 thousand.

He will also receive a total of 9 million 193 thousand dollars in equity awards. If he is less than a year in service, Patrice Louvet should return the award to Ralph Lauren.

If Ralph Lauren takes office two years after Patrice Louvet, she will be compensated 4 times of her basic salary without any reason to dismiss Patrice Louvet.

According to LADYMAX data, the salary of Ralph Lauren, chairman and chief creative officer, has plummeted. In the fiscal year ended April 1st, its salary dropped by 24% to 13 million US dollars over the previous fiscal year of 17 million 200 thousand, and the salary in the 2016 fiscal year was more than 28.4% in the 2015 fiscal year.

Only the CEO and CEO of Stefan Larsson rose 46% to $16 million 200 thousand in the 2017 fiscal year.

The new CEO has accumulated rich management experience in Procter & Gamble. During its 28 year term of entry into Procter & Gamble, its new portfolio includes 23 brands including Gucci and Hugo Boss perfume, both in the portfolio.

The promotion of popularity or business development has achieved good results.

Data show that in 2016, Patrice Louvet was responsible for sales of up to US $11 billion 500 million, accounting for 18% of P & G's total revenue last year.

The picture is Ralph Lauren's new CEO Patrice Louvet.

However, there is an analysis that Patrice Louvet joins Ralph Lauren, the once brilliant and desolate brand in the United States, facing not only the running in with the brand, but also the greater challenge from the brand culture of Ralph Lauren in the past ten years.

It is reported that the instability of sales growth of Ralph Lauren is not only caused by the global luxury market downturn in recent years, but also has many problems in the management strategy and growth layout. The lengthy management mechanism has made the brand product production cycle for a year.

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For the decision to hire Patrice Louvet as CEO, Ralph Lauren explained in an exclusive interview with the women's Wear Daily that he was looking at the strength of Patrice Louvet, especially the rich experience of Patrice Louvet in managing the brand's international business.

"When a brand or an enterprise is looking for CEO, it is actually looking for a like-minded partner. What I need is someone who can really help me to manage the business of $7 billion this year," Ralph Lauren added. "Patrice Louvet will take charge of brand management, and I will continue to be my creative director."

Patrice Louvet said in a conference call after the earnings announcement that the global fashion retailing industry is now at a critical turning point. The group will continue to simplify its global business in the future so as to improve its operational efficiency and enable the group's investment to grow for a long time.

In the first quarter, Ralph Lauren group's flagship store in Fifth Avenue, New York, the flagship store in Greenwich, Connecticut, and 3 other independent stores have been closed down, and hundreds of employees have been laid off. The stock level is also reduced by 31% over the same period last year.

In addition to continuing to reduce wholesale channel business and close poor performance stores, Patrice Louvet is also actively preparing for Ralph Lauren's new e-commerce website, which is expected to be reintroduced by the end of the year.

Patrice Louvet emphasizes that as the development of technology will deeply affect consumer buying habits and ways, digital and globalization will be the most important part of the future development of Ralph Lauren group. Ralph Lauren will provide consumers with a full range of shopping experience and redefine the future shopping model.

Julie Nielsen, chief financial officer of Ralph Lauren group, also pointed out that Ralph Lauren will launch global family activities combined with digital and outdoor experience. In order to attract more young consumers, Ralph Lauren will increase its exposure on social media platforms such as Instagram, and plans to launch the new Ralph Lauren shirt in November.

Ike Boruchow, a financial analyst at Wells Fargo, said in a research report after the earnings report that the performance of Ralph Lauren in the first quarter is a good start for the new fiscal year.

He believes that Ralph Lauren's progress plan has achieved initial success last year, and slowing down the pace of expansion is critical to the healthy development of the brand in the future.

According to its estimate, the group's second quarter sales will also decline by 9% to 10%.

Morgan chase analyst Matthew Boss also held a positive attitude towards the future development of Ralph Lauren in a report. She believed that Ralph Lauren would be more sensitive to changes in the market and consumers after innovating the products and improving the flexibility of operation management mode.

However, Christian Buss, an analyst at Credit Suisse, has a neutral attitude towards Ralph Lauren's performance. Although the pformation plan of Ralph Lauren is progressing smoothly, the long-term earnings return growth outlook is still uncertain.

It is reported that Ralph Lauren plans to hold the first Ralph men's clothing series of Ralph Lauren Purple Label in its private garage at 7 o'clock in the evening, while displaying his collection of famous cars and holding a private formal dinner.

In 2011, 17 cars collected by Ralph Lauren were exhibited at the Paris Art Fair.

The fashion show will continue to adopt the "watch to buy" mode, which consumers can immediately purchase in the global designated Ralph Lauren stores.

For the 2018 fiscal year, Ralph Lauren expects full year sales to continue to fall by 9%, with total capital expenditure of about $300 million.

Thanks to the recovery of profitability, Ralph Lauren rose 13.28% to $88.53 per share after its earnings announcement, and its market capitalization is about $6 billion 280 million.

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