King of cool again? How Ralph Lauren plans to regain crown
Back in the last century, Ralph Lauren built a business empire by sketching out a national fashion identity with each design.
In recent years though, the influence of his preppy styles has waned. Sales have fallen steadily as shoppers moved on to casual wear, fast-fashion or even upstart preppy brands.
Now, the 78-year-old designer is trying to make a comeback.
His latest CEO, Patrice Louvet, is helping to lead the charge to reclaim the prestige the brand once enjoyed.
The strategy is to go back in time. Products that aren’t key to that effort are getting culled, while core items are getting refreshed.
Old styles, labels and symbols are going to be resuscitated in a bid to restore the cachet that Ralph Lauren once enjoyed.
Bridget Weishaar, an analyst at Morningstar, praised the strategy – especially the decision to jettison some items.
In recent years, Ralph Lauren has pushed all sorts of different labels.
There’s Ralph Lauren, Polo Ralph Lauren, Ralph by Ralph Lauren, Lauren Ralph Lauren, and Double RL.
There was even something called Denim & Supply Ralph Lauren, but that was discontinued.
“They just had so many sub-brands under the title of Ralph Lauren that it got confusing,” Weishaar said. “The focus on the core really goes back to their brand identity.
“We’ve yet to see that uptick in sales. Ultimately, that is what’s going to be necessary.”
Lauren stepped down as CEO in 2015 and brought in Stefan Larsson, a veteran retail executive from Gap’s Old Navy.
In a two-hour presentation to analysts and investors the next summer, Lauren admitted the company had gone astray. The new arrangement didn’t work.
Larsson left last year and Louvet, a long-time executive at Proctor & Gamble, took over.
However, Lauren retains major influence as the creative force behind the brand.
Management has pinned its hopes on classic styles – think Oxford shirts, nautical sweater and peacoats – infused with technical functionality to help revitalise Ralph Lauren.
Washable merino sweaters and stretchy chinos have been rolled out to update old items and have performed well so far.
Don’t forget the polo shirt, still one of the company’s most important items.
The three most popular full-priced men’s polos, based on online sell-outs over the past three months, are from Antigua, Nike and Polo Ralph Lauren, according to data from fashion analytics company, Edited.
Ralph Lauren ranked 21st in that category over a six-month period last year, so that is certainly a step in the right direction.
Jeans would be key, too, the company said. Ralph Lauren’s denim business is up 8 per cent year-to-date, yet denim was only about 2 or 3 per cent of Ralph Lauren’s total revenue, a spokesperson said.
“We’re making encouraging progress across multiple fronts on product,” Louvet said.
“But there’s still more work to do.”
Rehabilitating the preppy power that defined the brand in the 1980s and 1990s will require more than just culling poor performers.
There are plans to generate hype with limited edition runs and capsule collections, as well as leveraging symbols and logos from previous decades.
The brand’s old downhill ski racer graphic, its throwback crest logo – these are symbols some Generation Xers may recognise that will be introduced to younger shoppers.
With its marketing spend spiking by 27 per cent in the last quarter, the strategy is beginning to, um, bear fruit.
Two recent releases were ’90s throwbacks – the Polo Stadium collection from 1992 and the Snow Beach capsule from 1993. And one of the brand’s bestsellers of late has been its old Polo Bear sweaters.
As Ralph Lauren rejigs its products, it’s also pulling merchandise from some department store locations and ending discounts – all efforts to improve margins and prop up the brand so it can regain exclusivity.
The retreat is showing in its sales numbers, as its North America revenue fell 11 per cent quarter.
“We’ve yet to see that uptick in sales,” Simeon Siegel, an analyst at Instinet, said. “Ultimately, that is what’s going to be necessary.”
After a year of falling sales and internal turmoil, the grandfather of preppiness is ‘going back in time’ to rescue his luxury brand and regain its former glories