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 - born Ralph Lifschitz - who started out in the mid-1960s designing ties. The secret of his success has been careful control of the Ralph Lauren trademark, and 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 preppy lifestyle has made him an eternal hero for his main market, Americans themselves, especially upwardly mobile Caucasian ones aspiring to WASP status. In fact, for many years Lauren's biggest challenge was to broaden his audience, especially in Europe and Asia, where there is still a preference for homegrown designers. Indeed, life has generally been more challenging for Ralph Lauren over the past few years. New challenges emerged in 2014, when after years of steady and confident growth, the company unexpectedly stumbled. An attempt to recover by recruiting former H&M and Gap executive Stefan Larsson as CEO failed to deliver results. After years of restructuring, Ralph Lauren has yet to regain its former poise, and the Covid pandemic has inflicted further damage during 2020. Revenues for ye 2020 were $6.2bn, down 2% year-on-year but still well below 2014's best-ever $7.6bn. North America accounts for just over half of revenues. Net income was $384m. In 2020, the company said it would cut as much as 15% of its workforce to reflect reduced trading. Lauren himself - aged 80 in 2020 - remains executive chairman and chief creative officer as well as controlling shareholder. P&G veteran Patrice Louvet was appointed as the company's new CEO in 2017. The company maintains full manufacturing and marketing control over almost all its own apparel under the main Ralph Lauren brand and its several variants, as well as entry-level Chaps and Club Monaco. It has also taken back inhouse control of its branded home decoration and furnishings products. Most other accessories are managed by licensees, of which the most significant are L'Oreal for fragrances, Luxottica for eyewear and Richemont for watches and jewellery. The group maintains its own branded network of more than 740 mostly owned stores and 680 concessions worldwide as well as upscale third-party retailers, and has official outfitter partnerships with several sporting associations including the US Olympic Association, the PGA Golf Association and US Ryder Cup team and also Wimbledon Tennis and the US Open. It even operates a small number of restaurants in New York, Chicago and Paris.
Capsule checked 13th October 2020
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Historical profile information for Ralph Lauren
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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