Ralph Lauren (US)

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Ralph Lauren is the world's most successful fashion designer, selling clothing and luxury goods worth around $12bn a year at retail. That's roughly a fifth more than his closest rival, Giorgio Armani. Not bad for a working-class kid from the Bronx who started out designing ties. The secret of his success has been careful control of the Ralph Lauren trademark, but above all an unrivalled understanding of the multiple strands that make up classic American style. His skill at blending these to design an all-embracing lifestyle has made him an eternal hero for his main market, Americans themselves, especially upwardly mobile Caucasian ones aspiring to WASP status. In fact, Lauren's biggest challenge by far is to broaden his audience, especially in Europe and Asia, where there is still a preference for homegrown designers. 

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Ralph Lauren website

Brands

Ralph Lauren Collection Polo Jeans Co.
Club Monaco RLGirl
Ralph Lauren Fragrances Ralph Lauren Home

Recent stories from Adbrands Weekly Update:

Adbrands Weekly Update 18th May 2017: Troubled Ralph Lauren named Patrice Louvet, current head of P&G's newly slimmed-down beauty division, as its new CEO. That position has been vacant since Stefan Larsson departed earlier this year after just a brief tenure as a result of mutual disagreements with founder Lauren over strategy. Lauren himself remains executive chairman and chief creative officer. P&G has yet to name Louvet's successor at its beauty division.

Adbrands Weekly Update 6th Apr 2017: Still struggling to recover from a worrying decline in sales, Ralph Lauren said it will shutter its flagship Polo store on New York's Fifth Avenue by the end of this month. (The Polo Bar restaurant will remain open). Annual rental for the site is thought to be around $25m a year.

Adbrands Weekly Update 23rd Feb 2017: Ralph Lauren appointed Jonathan Bottomley as its first group chief marketing officer. He joins from Vice Media's inhouse marketing division Virtue, but was previously head of strategy at BBH London. Another new appointment was Tom Mendenhall, named as brand president for Men’s Polo, Purple Label and Double RL.

Adbrands Weekly Update 9th February 2017: Stefan Larsson will step down as CEO of Ralph Lauren In April after little more than a year in the job. The former H&M and Gap executive had been recruited by chairman and namesake Lauren to reignite performance. However, said Lauren, they had "different views on how to evolve the creative and consumer-facing parts of the business". According to Larsson the differences involved product, marketing and shopping experience. "I've spent my whole career, 20 years, in family-controlled businesses," he said, "So we worked hard to find common ground. But we didn't and that's what led to this mutual decision." Lauren shares have plunged by more than 50% over the past two years, and are now trading at 2009 levels. A new CEO will be appointed in due course. Until then, the group will be led by executive chairman Ralph Lauren and CFO Jane Nielsen.

Adbrands Weekly Update 9th Jun 2016: Ralph Lauren and his newly appointed CEO Stefan Larsson - ex-Old Navy and H&M - presented their turnaround plan to investors. The response was generally positive, but did little to help the company's stock, currently trading at levels last seen in 2010, having halved since the beginning of last year. "Did we drop the ball?" asked Lauren in his presentation. "Did we make some things wrong? Absolutely. Am I happy about it? No. But I believe in this company." Larsson outlined a plan to speed up the supply chain, close under-performing stores, focus on three main apparel lines, and cut management layers from around nine to six. "We are not rightsizing the organization because of cost reasons," he said. "We are rightsizing the organization to empower our doers... There is no reason why we need more than six layers between me and the actual doer doing the work." Though they approved of the general theme of the turnaround, investors were disappointed by Larsson's statement that this would be a "multiyear journey", with profitable growth not expected before 2019-20. A further 10% decline is expected in sales for the current year, while bottom line will be severely dented by restructuring charges of $400m and $150m to liquidate excess inventory. That could result in a net loss for the year.


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Background

Free for all users | see full profile for current activities: Ralph Lifshitz grew up in the New York's working-class neighbourhood the Bronx, but was always determined to make something of himself. A snappy dresser, he changed his name to Lauren, drifted in and out of business school in his late teens, and held down jobs in department stores, at preppy clothing specialists Brooks Brothers and other companies before setting up on his own in 1967. According to legend he tried to persuade his then employer, a small garment company, to launch a range of wide ties, similar to the "kipper" ties then popular in the UK. When they refused, Lauren quit and set up his own business with older brother Jerry, under the name Polo Fashions, because that sport summed up the elegant and exclusive East Coast style to which Lauren aspired. Although US fashion at the time was for narrow and understated neckwear, Lauren unveiled a range of brightly coloured, wide designs. These sold well and the following year he launched a range of men's shirts, followed by a first menswear collection, combining traditional European tailoring with classic American style. 

A confirmed Anglophile, Lauren borrowed heavily from English country style, and its US equivalent, the elegant refinement of F Scott Fitzgerald's jazz age. It was more than enough to attract the attention of New York department store Bloomingdales, who even gave into Lauren's demand for a separate branded concession area within the store, a first for any designer. Lauren also gave this boutique a distinct style of its own, a Hollywood vision of a colonial gentleman's club, complete with mahogany panelling, potted plants and brass fittings. His first womenswear line was introduced in 1971, adapting men's tailoring for women's suits. This range also featured the company's polo player logo for the first time, originally as a motif on the cuff of tailored shirts. That year, Lauren opened his own shop in Beverly Hills, becoming the first American designer to operate a standalone store, as opposed to department store concessions. In 1972 the company created a new fashion icon when it reinvented the traditional short-sleeved mesh shirt worn by polo players, and launched it in a vibrant rainbow range of 24 different colours. Previously only a niche item at Brooks Brothers, Ralph Lauren's Polo shirt became a men's leisurewear staple, adapted by literally hundreds of other companies.

The collection also received huge exposure in 1974 with the release of the movie The Great Gatsby, dressed entirely by Ralph Lauren. Although set in the 1920s, it did much to establish Lauren's clothing as the look for smart New Yorkers in the 1970s. That influence was reinforced three years later by Woody Allen's enormously successful movie Annie Hall. Diane Keaton's unconventional style in that film, based on Keaton's real life predilection for Lauren's designs, became a major influence on other designers. A year later, however, Lauren changed direction, launching a collection strongly influenced by cowboy "westernwear". The company also introduced its first fragrances, Polo for Men and Lauren for women.

In 1979 the company began taking advertising space in mainstream magazines for the first time, launching 20-page sections in upmarket glossies, which effectively functioned as catalogues for the full range. In the 1980s, the company launched its first retail outlet in Europe (in London), and launched the Ralph Lauren Home collection of designer sheets, towels and other classic American furnishings in 1983. In 1986, the company spent lavishly to convert the Rhinelander mansion, a palatial residence in New York's Madison Avenue, into its new headquarters and flagship store. In the 1990s, Lauren introduced his first sportswear range under the Polo Sport label (from 1993), as well as an even more exclusive tailored menswear range (Purple Label from 1994). Filling in the lower end of the spectrum, Polo Jeans launched in 1996. The group raised funding to expand by selling a 28.5% stake to Goldman Sachs for around $135m in 1994. Three years later, the company went public, making Goldman and Lauren himself a substantial profit. This led to the group's first significant acquisition, of Canadian clothing and home furnishings label Club Monaco. 

Floatation also gave rise to a change in strategy. Although the company had run its London store since 1983, virtually all other activities outside the US, including its clothing lines, had been left in the hands of licensees. Lauren had concentrated on building the US business, and let the rest of the world look after itself. Wall Street welcomed the Polo Ralph Lauren Corporation at first, but quickly soured on the business when it missed an earnings forecast in 1998, pointing to what looked like an overdependence on declining US department stores. At the same time, the Lauren brand name had become too widely spread, with too many low-end products, mostly produced by licensees, undermining the perceived value of the brand as a whole. 

As a result, since then the group's main focus has been to broaden its international profile and eliminate cheaper brand lines. In 2000 it spent $200m to buy back its main European license from Poloco of Paris. Since then a series of similar deals have been made to regain control of the international business, including the buyback of retail outlets or licenses, or acquisitions of stakes in licensees. In 2002 the group reacquired a 50% stake in the master licensee for Japan, establishing a joint venture with Onward Kashiyama. (It acquired a controlling shareholding in 2000). In a determined effort to build his standing in Europe, Lauren launched his 2002 Purple Label menswear collection not in New York but in his new palazzo in Milan. The group reacquired its Lauren by Ralph Lauren womenswear line from Jones Apparel in 2004, and successfully relaunched the brand.

However the latter move led to a bitter court battle with Jones Apparel, which claimed that the license for Lauren had been terminated unlawfully. Polo also poached Jones Apparel's president & COO, Jacki Nemerov, to manage its wholesale portfolio. Jones claimed compensation and damages, and won several preliminary court rulings during 2005. The suit was finally settled at the beginning of 2006. Also that year, Polo lost a five-year court battle to prevent the United States Polo Association and rival fashion company Jordache from using a polo player logo, and another Polo licensee, Westpoint Stevens, which makes home furnishings for the group, filed for Chapter 11 bankruptcy protection.

In 2006, Polo Ralph Lauren secured a precedent-setting deal to supply Wimbledon All England Club with discreetly branded clothing for all court officials at its hugely prestigious annual tennis championships. Under the five-year deal, said to have cost Polo "less than $10m", the clothing company supplied outfits for all umpires, ball girls and ball boys, and in return had rights to market a line of official Wimbledon attire in its stores. The deal was one of the first such commercial sponsorship arrangements ever allowed by Wimbledon's notoriously conservative organisers. See full profile for current activities


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