Ralph Lauren Slashing Corporate Office Space, Digitizing Work & Customer Experiences

Jamie Grill-Goodman
Editor in Chief
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Ralph Lauren said it plans to slash its North America corporate office footprint up to 30%, along with selected reductions in Europe and Asia, as teams embrace “new ways of working” and it pivots resources to other priorities.

The retailer also said it is closing up to 10 retail locations globally and is looking at completing the consolidation of North American distribution center operations to drive greater efficiencies. Combined, the apparel retailer expects this to result in gross annualized pre-tax expense savings of $200-$240 million. The moves are part of an ongoing effort and inclusive of previously announced savings.

“While we still expect the majority of the original $180 million to $200 million in organizational savings to flow through to the bottom line, we expect to reinvest the majority of our savings related to today's actions in our future growth,” said COO and CFO Jane Hamilton Nielsen.

As Ralph Lauren continues to digitize how it works as a company, it also launched an integrated vendor management system in the third quarter with the majority of its suppliers.

“This new digitally centralized portal enables us to communicate seamlessly with our suppliers, on everything from digital product creation to real-time tracking on our production status and factory capacity,” said president and CEO Patrice Louvet.

The technology also enables the retailer to track and support things like gender diversity at the supplier level.

“This is all part of our broader goal of elevating our product, streamlining how we bring them to market and making it easier for our teams to stay connected and agile,” explained Louvet. “All while driving our sustainability and citizenship initiatives across everything we do.”

New Digital Experiences

The retailer also launched new digital brand experiences in its Q3 2021, including a Polo Pony logo scan – its first augmented reality launch on Snapchat, a Holiday Bear Run livestream gaming event on Twitch, expanded Virtual Store Experiences and customized gift guides.


“We are investing in these new forms of selling, including social commerce, which we expect to become a greater part of the digital shopping experience long term."
Patrice Louvet, president and CEO, Ralph Lauren

Louvet claimed Ralph Lauren was the first apparel brand to launch Snapchat's logos scan this holiday. Snap Inc. saidit has partnered with Ralph Lauren, as well as NYX Professional Makeup, Sweat, and The New York Times to launch augmented reality-powered advertising experiences.The tech allows consumers to scan the retailer’s iconic Polo Pony logo from any surface, such as clothing items or shopping bags to trigger an augmented reality experience that brings the consumer into the world of Ralph Lauren and, hopefully to purchase on its own website.

Ralph Lauren also launched a live stream selling event in Asia for Singles' Day, which delivered more than 120 million impressions. 

“We are investing in these new forms of selling, including social commerce, which we expect to become a greater part of the digital shopping experience long term,” said Louvet.

Ralph Lauren’s revenue was $1.4 billion for the quarter, down from $1.7 billion last year. In North America, revenue decreased 21% to last year. Retail comps declined 21%, driven by a 30% decline in bricks-and-mortar comps, which continued to be impacted by COVID related traffic declines with third quarter traffic down 45% and foreign tourists sales down about 85%.

However, global digital commerce sales spiked 20% and the retailer said accelerated investment in digital marketing generated a 27% increase in new customers during the holiday quarter, exceeding expectations. 

"For more than 50 years we have stayed true to a set of values that define us – among them timelessness, quality, perseverance and optimism," said Ralph Lauren, executive chairman and chief creative officer, in a statement. "And in this period of great challenge and change, it is these values that are enabling us to authentically and deeply connect with our consumers around the world.”

"Despite the disruptions and uncertainty we faced throughout our third quarter, our teams continued to elevate our brands and effectively engage with consumers around the world – delivering better than expected gross and operating margins through the holiday period, and continuing to meaningfully improve our digital profitability," said Louvet. “We remain focused on emerging from this period in a position of strength as we invest in key areas like our digital transformation, while taking a disciplined approach with expenses and ensuring we have the right resources, footprint and brand portfolio to support future growth and value creation."