Another Retail Brand downsizing

Ralph Lauren, like some other luxury brands, has been struggling amid sluggish spending on luxury apparel and accessories. The company's margins have taken a knock as department stores discount heavily to get rid of excess inventory.

Ralph Lauren is closing stores, cutting jobs and focusing more on its most popular as part of a sweeping plan to lower costs and revive sales growth at the luxury fashion brand.

The changes are the first big moves from CEO Stefan Larsson, who replaced company founder Ralph Lauren as CEO last November 2015. Lauren is still executive chairman and chief creative officer of the fashion and home decor business he created.  The new CEO Stefan Larsson's plan includes restructuring in a move aimed at saving $220 million over the next year.

Larsson has also worked with H&M for about 15 years, where he helped grow the company's sales to $17 billion from $3 billion and introduced partnerships with luxury brands such as Versace and Karl Lagerfeld.

In order to create a leaner business that operates with fewer layers of management. Larsson also wants to bring the brand more in line with today's trends and better cater to what shoppers want, taking a page out of his time at fast-fashion brands Old Navy and H&M. He will reduce inventory and focus more on the company's core brands.

Moreover, the company's lower-end Polo and Lauren brands are facing competition from retailers such as H&M (HMb.ST) and Inditex's (ITX.MC) Zara, which are known for their shorter production times.

Ralph Lauren said on Tuesday it The company will focus on its luxury Ralph Lauren line and the lower-end Polo and Lauren brands.

The New York-based company, known for its polo shirts and pony logo, plans to close more than 50 stores, or about 10 percent of its total retail stores. It will cut about 8 percent, or 1,200, of its 15,000 full-time employee.

It will focus more on its three best-selling brands — Ralph Lauren, Polo and Lauren — and devote fewer resources to its smaller ones, such as Chaps and RLX. The company would try to reduce the time taken to get new products to shelves to nine months from 15.

Ralph Lauren expects the restructuring to save it between $180 million and $220 million a year. That’s on top of $125 million in cost cuts from last year. It expects to incur restructuring charges of up to $400 million for the year and inventory-related charges of up to $150 million.

For the current quarter, it expects revenue to fall in the mid-single digits and fall in the low double digits for the year.

The changes mark a significant shift for the all-American fashion house built on denim staples and branded polo shirts. But the company, where Lauren himself was at the helm until last year, has struggled under falling sales and profits, failing to keep up with rapidly changing retail trends and new style preferences. In the year ended April 2, Ralph Lauren's profit dropped by more than 22%, excluding restructuring charges.

The company 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.

The restructuring measures are expected to result in annualized savings of about $180-$220 million.

The company had about 493 directly operated retail stores and employed about 26,000 people, roughly 15,000 of who work full time as of April 2.