Ralph Lauren Plan Forward Continues Amidst CEO Shake Up

Press enter to search
Close search
Open Menu

Ralph Lauren Plan Forward Continues Amidst CEO Shake Up

By Jamie Grill-Goodman - 02/04/2017
Ralph Lauren Corporation's President and CEO Stefan Larsson will depart from the company May 1, after he and the company's namesake couldn't agree on "how to evolve the creative and consumer-facing parts of the business."
 
"After many conversations with one another, and our Board of Directors, we have agreed to part ways," said Ralph Lauren, Executive Chairman and Chief Creative Officer. Lauren continued, “We have built a strong foundation for future growth, including strengthening our team, refocusing our brands, evolving our products and our marketing, improving our operations and reducing our costs. The Board and I are committed to the execution of the Way Forward Plan and continuing to move our business and iconic brand forward as we have done for the last 50 years.”
 
Stefan Larsson, the former global president of Old Navy, took over in November 2015 as CEO for Ralph Lauren.
 
A search for a new Chief Executive Officer will be conducted and the company will continue to execute the Way Forward Plan announced in June 2016 with Chief Financial Officer Jane Nielsen taking the lead until a new CEO is found.
 
Larsson reports progress on the plan includes the strengthening of the leadership team, refocusing on core brands, starting to evolve iconic products and marketing, matching inventory to demand, drastically reducing lead times, creating a more nimble organizational structure, beginning to right size the store fleet, achieving the initial cost reductions, and the employee engagement and understanding of the strategy.
 
The company has applied a systematic repeatable way of building a stronger assortment.
 
"This means being very clear on what we are testing, what we are growing and what icons we are reinventing," said CFO Jane Nielsen.
 
This improved disciplined in the assortment creation is enabling the company to buy closer to market and reduce early commitments. Nielsen said the company is buying much more informed, which will significantly improve ability to match inventory to demand.
 
The company is also well underway to build a best-in-class sourcing capability and a demand driven supply chain, on track to reach its goal of a nine month lead time.
 
Ralph Lauren also strategically reduced shipments to right size inventory levels and started to rebalance distribution in its off-price wholesale business.
 
"We also executed these important quality of sale initiatives in our direct-to-consumer e-commerce business," said Nielsen.
 
"These actions will continue to impact our results in the fourth quarter on our e-commerce site. E-commerce has been our most over promoted channel and we are moving to harmonize pricing across channel and reduce promotion depth."
 
Global e-commerce revenues declined 9% in constant currency, in the third quarter 2017.

The company is also on track to close approximately 50 stores this year and closed 12 stores in the third quarter and 27 year-to-date and expects to achieve the savings from store closures of approximately $70 million.