This Iconic Fashion Brand Is Starting to Shut Down Stores
For decades, this brand was among the most popular. Now some stores have become COVID casualties.
Ralph Lauren was once considered a premier American fashion brand mentioned in the same breath as '90s icons Calvin Klein and Tommy Hilfiger. As recently as 2015, business was booming and poised for growth, according to Fortune. But somewhere along the way, the shop—recognizable for its country club aesthetic—lost its sheen. Now, Ralph Lauren has announced plans to reduce its corporate footprint and shutter some retail stores globally, according to Retail Dive. Read on for more on Ralph Lauren's store and office closures, and for more on businesses that have been crushed by COVID, check out This Iconic Department Store Is Filing for Bankruptcy.
In recent years, Ralph Lauren expanded to cater to a wider range of consumers by distributing in factory stores and outlets, and over time, it eroded its core customer base and their willingness to pay top dollar. Then, the pandemic hit. The new retail landscape, marred by economic instability and widespread lockdown measures, prompted a quick decline for Ralph Lauren in both wholesale and retail sales. In North American brick-and-mortar locations, comparable sales were down 30 percent, according to Retail Dive.
According to a recent earnings call with investors, Ralph Lauren will reduce its corporate footprint by 30 percent and will close up to 10 stores globally as a part of a larger plan to focus on digital sales, which was in place before the pandemic began. The closures are intended to help the company save on exorbitant rent costs, executives revealed on the call. Jane Nielsen, CFO and COO of Ralph Lauren, reportedly expressed that this would help the company "embrace new ways of working" and to "pivot resources to our key strategic priorities." These cost-saving changes are projected to save the company $200 million to $240 million, according to a press release.
The good news? There's reason to be hopeful if you're a Ralph Lauren fan. Analysts say that if the company can continue to cut costs and devise a strategy to stay relevant among younger shoppers—not just their parents—the brand could rebound as the economy stabilizes. "Having already worked to optimize its brand portfolio and create a leaner cost structure, we believe [Ralph Lauren] is taking the necessary steps to better position itself for the post-pandemic environment," analysts with Telsey Advisory Group told Retail Dive.
Read on for more retailers that have struggled under pandemic pressure, and for more on COVID closures, check out This Popular Pizza Chain Just Filed for Bankruptcy.
Toys R Us, once a childhood staple, had just two stores left remaining: one in Texas, the other in New Jersey. After recently being sold to Tru Kids, Inc., those brick-and-mortar locations pivoted from functioning as more traditional toy stores to focusing on more "experiential" features. However, those plans were thwarted as COVID-19 caused widespread closures of malls and other retail outlets.
"As a result of COVID-19, we made the strategic decision to pivot our store strategy to new locations and platforms that have better traffic," a spokesperson told CNN Business, while confirming the closures. The company will continue to sell online in the U.S., and more than 700 stores will remain open internationally. And for another business in trouble, check out This Popular Chain Restaurant Just Filed for Bankruptcy.
Sears and Kmart, both owned by the parent company Transformco, have seen better days. As reported by USA Today, they've recently announced plans to shutter at least 20 branches of Sears and seven Kmarts by mid-April of this year.
Heading into 2010, Sears had a large footprint with more than 3,900 stores. According to Forbes, that had shrunk to 489 at the start of 2019, and at the end of Jan. 2021, there were just 36 department stores left. Similarly, Kmart reduced its store count to a total of 30, down from 360 in 2019. And for more on the demise of these beloved department stores, check out Sears and Kmart Are "Slowly, Quietly Dying."
The famous chocolatier Godiva has announced that after 95 years, it will close all 128 of its U.S. stores by March of this year, CNN reports. Until the pandemic, the company had planned to expand, and even announced that it would open 2,000 new Godiva cafes globally.
"Of course, this decision was difficult because of the care we have for our dedicated and hardworking chocolatiers who will be impacted. We are grateful for all they have done to make wonderful moments for our consumers and spread happiness through incredible customer service and living our values and behaviors," Godiva CEO Nurtac Afridi said in a statement. The company has stated that it will continue to sell products online and through a number of specialty stores and groceries across the country. And for more retail news sent right to your inbox, sign up for our daily newsletter.
American Eagle Outfitters was well-loved in the aughts, once rivaling Abercrombie & Fitch for prepster popularity. But according to CNBC, the company's Financial Officer Mike Mathias told investors in January that there are plans to close 200 to 250 American Eagle locations.
"We currently have 880 stores between the U.S. and Canada. We see that getting down to somewhere between 600 and 700 over the next three years," Michael Rempell, executive vice president and chief operations officer of American Eagle Outfitters, added while speaking to Women's Wear Daily. "But we're confident that we can transfer sales from closed stores into other stores or online, continue to acquire new customers and make the American Eagle brand more profitable over time." And for another brand that's shutting stores down, check out This Beloved Furniture Chain Is Closing All But 1 of Its Stores.