Hadley Malcolm

USA TODAY

Ralph Lauren needs to start making money again, and CEO Stefan Larsson's plan to do it includes restructuring in a move aimed at saving $220 million over the next year.

It will mean closing at least 50 stores and cutting 8% of the full-time workforce, or about 1,000 employees, in order to create a leaner business that operates with fewer layers of management. Larsson also wants to bring the brand more in line with today's trends and better cater to what shoppers want, taking a page out of his time at fast-fashion brands Old Navy and H&M. He will reduce inventory and focus more on the company's core brands.

Larsson, who took over from founder Ralph Lauren in November, presented the details of the plan at an investor and analyst meeting Tuesday.

"The business has struggled over the last three years," he said. "We have to do a better job to give the consumer something really exciting."

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The changes mark a significant shift for the all-American fashion house built on denim staples and branded polo shirts. But the company, where Lauren himself was at the helm until last year, has struggled under falling sales and profits, failing to keep up with rapidly changing retail trends and new style preferences. In the year ended April 2, Ralph Lauren's profit dropped by more than 22%, excluding restructuring charges. The stock has fallen nearly 48% from its December 2014 high of $182.74.

The new plan is expected to save between $180 million and $220 million in fiscal year 2017. The company expects the restructuring to cost $400 million plus a $150 million inventory charge from reducing supply. With the changes, Ralph Lauren says it will be profitable by fiscal year 2019.

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