With two-thirds of its stores in China temporarily closed due to the coronavirus epidemic, classic American fashion company Ralph Lauren Corporation announced on Thursday that it expects the health crisis to have a negative impact of between $55 million and $70 million on its sales in 2020.
The company, which has shut most of its Chinese stores in line with the guidance given by both local authorities and global health organizations, also announced that it expects its operating income in China, Japan and Korea to be negatively impacted to the tune of between $35 million and $45 due to the coronavirus outbreak.
On top of this, disruptions in the company’s supply chain in China could have a minor impact on its global orders in the fourth quarter.
Ralph Lauren Corporation said that these estimations could change in the future if there is a significant evolution in the trends being seen by the company.
“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,” commented Patrice Louvet, Ralph Lauren president and CEO, in a release. “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.”
Earlier this month the company reported that it had closed half of its stores in China and highlighted that the country accounts for less than 4% of its total business.
The company intends to provide an update on the estimated financial and operational impact of the coronavirus outbreak when it reports its fourth-quarter and full-year fiscal 2020 results.
Ralph Lauren is one of a growing list of U.S.-based brands that have temporarily closed a significant number of their stores in China in response to the health crisis, including the likes of VF Corp, PVH Corp and Nike.
To date, the epidemic has caused more than 1,300 deaths in China, with a spike in new cases on Thursday dashing hopes that the infection rate was leveling off.