Ralph Lauren ($RL) came out with a disappointing fourth-quarter earnings report this morning, with comparable sales down 13% in North America, decreasing 23% in Asia, and falling 16% in Europe. The New York-based apparel brand also reported a loss of $3.38 per share.
The report comes as Ralph Lauren rushes to combat the economic impact of Coronavirus, reopening all stores in China and Korea, followed by Japan and Australia this week. Two-thirds of Ralph Lauren’s European locations have been revived, as Bloomberg reports, while half of the US stores have reopened.
CEO Patrice Louvet told Bloomberg that Ralph Lauren plans on ramping up its digital growth. Apparently, the “vast majority” of business is expected to come from the company’s 530 stores, the e-commerce website, and its wholesale partners’ online shops.
The company has been introducing more online services like curbside pickup, digital appointments, Instagram checkout, and virtual store tours to adapt to customers’ new lifestyles. “We have been expanding out direct-to-consumer and e-commerce operations,” Louvet said in an interview today. “We believe that we have an opportunity to grow market share as we work through this crisis to reestablish momentum.”
While Ralph Lauren is beginning to make structural changes with a focus on digital sales, they're utilizing a much smaller workforce to do so. The company's LinkedIn employee headcount has shrunk by 22% since December. Ralph Lauren furloughed a majority of its in-store and corporate employees back in April, while execs took significant pay cuts. Its stock is falling in step.
Social media buzz around Ralph Lauren has always been fairly quiet, but it’s getting a little louder on Facebook as the company rolls out its new digital services. Mentions of the designer brand spiked in March at 148,000, the most mentions it’s seen in five years.
That said, Ralph Lauren's Twitter following has been falling all year. People are actively unfollowing the brand they once looked to for elevated preppy staples. And on Instagram, follower growth has been lagging for several months
Coronavirus has made safety and convenience major concerns for shoppers. Focusing on digital sales and no-contact pick-up is a step in the right direction, but are these measures enough to keep Ralph Lauren afloat? If China's 76% surge in online sales is any indication of the company's future success, maybe.
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