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Ralph Lauren presents strategic growth plan
Jun '18
Courtesy: Ralph Lauren
Courtesy: Ralph Lauren
Aiming for sustainable, long-term growth and value creation, Ralph Lauren, a global leader in the design, marketing, and distribution of lifestyle products, has presented its strategic growth plan. Its financial outlook includes low to mid-single digit revenue CAGR and mid-teen operating margin by 2023 in constant currency, excluding restructuring charges.

As part of its strategic plan, the companies intends to win over a new generation of consumers, energise core products and accelerate under-developed categories, drive targeted expansion in its regions and channels, lead with digital across all activities and operate with discipline to fuel growth.

"As we reflect on 50 years, I am so energised by the work we are doing to build the future for our company and iconic brand," said Ralph Lauren, executive chairman and chief creative officer. "With a clear plan, Patrice’s leadership and our dedicated, passionate teams all over the world, we are reigniting the entrepreneurial spirit that is at the heart of our heritage and culture."

"We are confident that with our clear strategic plan in place, we can return Ralph Lauren to sustainable long-term growth and value creation," said Patrice Louvet, president and chief executive officer. "We are building on a solid foundation, starting with our iconic Ralph Lauren brand, our engaged global organization and a strong balance sheet. By putting the consumer back at the center of our business, elevating and energising our brands and balancing productivity with growth, we’ll be well-positioned to deliver our next great chapter."

Over the next five years, from fiscal 2018 to fiscal 2023, the company expects revenue to grow at a compounded annual growth rate of low to mid-single digits in constant currency. In addition, the company is targeting a return to revenue growth in fiscal 2020 in constant currency.

Operating margin is expected to expand to mid-teens by fiscal 2023, in constant currency. In addition, marketing spend is expected to grow to approximately 5 per cent of revenue by fiscal 2023. In addition, capital expenditures are expected to represent 4-5 per cent of revenue by 2023.

The company’s board of directors approved a restructuring plan associated with the company’s strategic objective of operating with discipline to drive sustainable long-term growth. It expects to incur restructuring charges of $100-$150 million in connection with its fiscal 2019 Restructuring Plan, associated with activities primarily related to the rightsizing and consolidation of its global distribution network and corporate offices, and through severance actions. (RR)

Fibre2Fashion News Desk – India

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