Brookfield, Ralph Lauren shedding jobs
NEW YORK — Brookfield Properties, one of the nation’s largest mall operators, is cutting 20 percent of its workforce in its retail division, as the pandemic has accelerated online shopping and resulted in a string of store closings.
The Chicago-based mall, which operates 170 mall properties, has more than 2,000 employees in its retail division, according to the company.
The news came as luxury fashion company Ralph Lauren Corp. said it was cutting 15 percent of its workforce, or about 3,700 workers, by the end of its fiscal year, which closes in March.
Ralph Lauren’s layoffs come as it accelerates its online operations and tries to become more nimble. The New York-based company estimated that it will incur total pretax charges of about $120 million to $160 million. Annual savings, starting in the company’s next fiscal year, are seen reaching as much as $200 million.
Brookfield and Ralph Lauren join a growing list of retailers and mall operators that have cut staff in recent months as the pandemic forced the temporary closure of nonessential retailers. Last week, department store chain Kohl’s Corp. said it was cutting 15 percent of its workforce.
“2020 has had a profound impact on us all, both personally and professionally,” Jared Chupaila, CEO of Brookfield Properties’ retail group, wrote in a email to its employees. “Our business has been frustrated, interrupted and constrained. All of our constituents — retailers, lenders, communities, partners and our own employees— have been affected by the events of this year and forced to revisit their relationships with our industry and our company.”
Chupaila noted in the email, furnished by the company, that while other companies were quick to furlough and lay off people at the onset of the pandemic, Brookfield made the “conscious decision” to keep all its team employed while it gained a better understanding of the pandemic’s long-term effect on the company.
Chupaila said that starting Tuesday and continuing today, affected employees are being contacted directly by leaders from their department and human resource team member.
Brookfield bet big on retail in the U.S. with its purchase of mall owner GGP Inc. for about $15 billion in 2018. Since then, pressure has been mounting across the industry, with the pandemic pushing even more customers to embrace e-commerce.
The company’s shares have dropped about 40 percent this year. In May, Brookfield Asset Management Inc., the parent company of Brookfield Property Partners, announced a plan to invest $5 billion to take minority stakes in retailers that have been hit hard by the pandemic.
For Ralph Lauren, the restructuring comes as the company struggles to cope with economic fallout from the pandemic like most clothing retailers, with sales dwindling over the past two quarters. The company has declined to give guidance for its performance amid upheaval in consumer spending.
“The changes happening in the world around us have accelerated the shifts we saw pre-COVID, and we are fast-tracking some of our plans to match them — including advancing our digital transformation and simplifying our team structures,” company President and CEO Patrice Louvet said.
Last month, Louvet said management was undertaking a review of the organization, including team structure and its corporate office real estate footprint.
Ralph Lauren shares rose as much as 4.9 percent in New York trading Tuesday. The stock had fallen almost 40 percent this year through Monday’s close.