Photos: Ralph Lauren
Ralph Lauren making a turn to fewer and faster fashions
Some were shocked, as a RetailWire article pointed out last October, when Ralph Lauren hired Stefan Larsson, a former H&M executive and president of Old Navy, to replace its founder as CEO.
After all, Mr. Lauren had built the company on high fashion, not the fast variety. But there was no doubt that Mr. Larsson was brought into a company that was struggling and in need of change. What shape those changes will take has become clearer as Ralph Lauren has revealed plans to turn its business around.
Earlier this week, the company announced it would close 50 stores and cut about 1,000 jobs, roughly eight percent of its total workforce.
Management also said it would focus on the iconic fashions that made the company famous in the first place, including polo shirts and navy blazers. According to an article on the Sydney Morning Herald site, 30 percent of the company’s “styles” make up 70 percent of its business. The company will stick to three brands — Polo, Lauren and Ralph Lauren — going forward.
Finally, Mr. Larsson is bringing his knowledge of fast fashion sourcing and logistics to bear. The goal is to cut the time it takes goods to make it through Lauren’s supply chain from 15 months down to nine. To help create the turns it needs to pull this off, the company is reducing its overall merchandise and has plans in place to discount clothing that is past-date.
- Can a fast fashion vet steer Ralph Lauren’s ship? – RetailWire
- Ralph Lauren revamp plan is to go old school – and mimic H&M – Sydney Morning Herald
- Struggling Ralph Lauren Tries to Fashion a Comeback – The Wall Street Journal (sub. required)
- Ralph Lauren to Slash 1,000 Jobs, Shutter Stores – Fortune
Discussion Questions
DISCUSSION QUESTIONS: Does Ralph Lauren have a plan in place that will turn the company around? Will making the business operate more like a fast fashion brand help or hurt the business overall?
Poll
BrainTrust
Cathy Hotka
Principal, Cathy Hotka & Associates
Carol Spieckerman
President, Spieckerman Retail
This is a complex challenge, because the Lauren brand equity has been weakened over the past several years. I believe customers are confused by the price/quality relationship between Ralph Lauren, Lauren, Polo Ralph Lauren and subsidiary brands like Chaps. It doesn’t help matters that the growth of outlet store business has further commoditized the brand.
Smarter sourcing (cheaper and faster) is something that the new CEO can bring to the table … but are quicker lead times really meaningful for iconic items like polos and navy blazers? And will “taking out costs” also mean compromising quality? These are big questions that will complicate the job of restoring some clarity and “polish” to the Ralph Lauren brand.
Fashion is faster than it has ever been. Those of us who have been around longer remember the days when designers decreed hemline lengths and color preferences, but these days the customer is firmly in charge, and fickle. Faster turns and fresher styles are the recipe for apparel success, even in luxury. I’m sure we’re all rooting for Mr. Larsson’s success.
It will be important for the new CEO to manage both goals at the same time: increased speed to market and emphasis on fashion. The company has to keep its core competency while increasing speed. How well the dual goals are managed remains to be seen.
Stefan Larsson is spearheading a long-overdue rework of the Ralph Lauren empire. Ralph Lauren had a great run, longer than most, during the reign of the department store and even beyond as mass retail and e-commerce took hold. Retail is changing fast but scorched earth (a la Ron Johnson), isn’t the only way to go about it. Larsson’s quote, “We have all the cards, but we need to play the cards in a different way” perfectly sums up where many retailers and multi-model companies like Ralph Lauren find themselves, yet it speaks to taking a more prudent approach that leverages existing assets. I’m bullish.