Ralph Lauren fears coronavirus will cut sales by $70 million
Luxury group Ralph Lauren Corp fears the coronavirus will reduce its March-quarter sales by between US$55 million and $70 million, due to falling store footfalls in Mainland China, South Korea and Japan.
The company says it expects “broader impact across its businesses in China and parts of Asia due to significantly reduced travel and retail traffic.” It also warned there may be some disruption to its supply chain due to the virus.
In a bleak outlook, the company said the sales decline would reduce its operating income for Asia by between $35 million and $45 million, potentially resulting in a loss given the company reported a $38 million surplus in the same quarter a year ago.
Asia drove $273 million in revenue this time last year
Ralph Lauren has closed about two thirds of its stores in Mainland China since the coronavirus broke out.
“Our dedicated teams are operating with agility in a highly dynamic situation, and we will continue to assess the implications for our business across retail, corporate and our supply base,” said Patrice Louvet, president and CEO, in a statement.
“While the health crisis creates near-term uncertainties, the fundamentals of our business are strong, and we continue to see significant long-term opportunities for growth in China and across Asia.”
The company’s founder Ralph Lauren expressed sympathy for those affected by the outbreak.
“Our hearts are with the many impacted by this virus. Our number one priority is keeping our teams, partners and consumers safe.”