Ralph Lauren Restructuring Plan Opens

In the three months ending March 28th, group net profit fell 19% to 124 million, or earnings per share of $1.41, a net profit of $153 million last year and a 1.68 US dollar earnings per share.

Net revenue rose $1% to $1 billion 890 million from $1 billion 870 million, of which net sales rose 1.1% to $1 billion 850 million, thanks to early Easter sales of wholesale business rose 2.4% to $1 billion; retail net sales were essentially flat at $841 million.

All the results were higher than those expected by Wall Street analysts, who had expected earnings of $1.32 a share and $1 billion 880 million a share.

For the 2015 fiscal year ended March 28th, net profit fell 9.5% to $702 million, or earnings per share of $7.88, and net revenue increased 2.3% to 7 billion 620 million US dollars.

The company said that all categories of prices have been upgraded to offset foreign exchange risk and that the median net income growth in 2016 is expected to be in a constant currency.

Ralph Lauren, chairman and chief executive officer, said that the company has set up several stores in major markets all over the world. "The launch of Drawstring Ricky handbags enhances the momentum of our luxury accessories business."

Nemerov believes that the clothing category is still doing well, whether Collection, Polo or Lauren by Ralph Lauren product line has a good performance.

Ralph Lauren Corp. started a new restructuring plan last month, but this time it is aimed at further pforming its brand sector structure into a new business model.

The first move is to upgrade CFO and executive vice president Christopher H. Peterson to the global brand president. It is clear that when pforming to the new global brand management structure, the company's brand will be the six brand group: the luxury brand Ralph Lauren under the supervision of the Valerie Hermann, excluding home series; Polo; Denim & Supply; Polo;

In addition, the Ralph Lauren Black Label series will be unified to Purple Label and Ralph Lauren Collection respectively. The CEO and chief operating officer Jackwyn Nemerov pointed out that although the Collection will not appear again, the products will be widely added to the price range of layering, and exist in the two tags.

She explained that the change was feasible because

Expressing confusion in feedback, it is hard to distinguish their differences after the two brands are labeled as "luxury" product lines.

And now merge into one.

Purple Label or Collection of women's clothing only allows a single brand information.

For the idea behind structural reform, Peterson said that this is to help reduce inventories worldwide and take into account the "universal commodity classification" around the world.

He pointed out that "in the past, we managed to separate regions and channels separately, and had different goods in different stores.

But changing to similar commodity classification will increase brand consistency and promote brand value.

In a conference call with Wall Street analysts,

The company is a pition from "annual cost savings to more than US $100 million" to a new business model.

It involves a restructuring fee of $70 million to $100 million, including a 5% reduction in the number of full-time employees, but he expects to be profitable in the first half of fiscal 2016.

Although the general investors praised the reduction measures, they were not satisfied with the company's performance report, resulting in the group's share price falling by 3% to 129.18 dollars.

One reason may be a 4% drop in same store sales this quarter, which is mainly slowed by the consumption of some passengers.

As of 52 weeks, Ralph Lauren's share price was as low as $127.29, the worst performance in the past 6 months, and its share price dropped by about 25.4%.