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Ralph's Retail Focus
NEW YORK
-- Ralph Lauren Corp. may be planning to shutter the Rugby chain, but retail remains its future growth engine.
The company said Friday that after the second quarter ended, the firm approved a plan to discontinue its Rugby brand operations "in order to focus resources on higher growth, more scalable global opportunities with the core Ralph Lauren brand." The company will close 14 stores and the e-commerce site over the balance of fiscal 2013. It expects to record pretax charges of $20 million to $30 million during the second half of the year, with 75 percent expected to be booked in the third quarter.
Ralph Lauren, chairman and chief executive officer, said, "We continue to make excellent progress on our long-term growth objectives as we invest along many dimensions, including new stores and e-commerce platforms and emerging merchandise categories and regions."
While the corporation hasn't set any targets for how much of its business it wants to come from retail, the group's ongoing global expansion -- especially in Asia -- is likely to tilt the balance more toward its own retail operations rather than wholesale. That will be the case even though, for now, margins are better in wholesale.
According to the firm's president and chief operating officer, Roger Farah, the company's wholesale margins, primarily apparel-driven, are in the 25.5 percent range. Retail margins...