BREAKFAST WITH THE BOSS: POLO RALPH LAUREN CORP

Olin Lancaster – President, Polo Brands, Polo Ralph Lauren Corp

Wed July 11, 2012

Key Messages:

• Sometimes opportunity knocks when you least expect it. Olin got his first job in retail while Christmas shopping at the Georgetown Polo store.

• A few years ago, 18 out of 20 Ralph Lauren stores were franchised – the franchisees didn’t truly care about the business. All stores are now controlled by Ralph Lauren. The company went through a huge metamorphosis from a small company that just went public in the 90s to a world-wide retail legend.

• Getting the Ralph Lauren labels right:

o Purple label – handmade, flagships, men’s specialty stores

o Black label – Polo stores in Saks, Neimans, Bergdorf’s
 Euro fit, modern
 Below purple but aspirational – largest growth label in Asia
 Heavily branded, and heavy on accessories

o Polo – biggest brand, vast majority of menswear business in department stores

o Lauren, Big & Tall, Denim & Supply – brands catering to millennials

• From a history of licensing, Ralph Lauren now produces almost everything in-house. “Now that we have the bandwidth to bring it back, it’s good to have the 20-30% profit, instead of the 12-18% from the licensee.” But for some product categories, like sunglasses, in which it would be inefficient for us to develop an expertise, we choose to license.

• With all your different customers and labels, how does the branding change? “Hopefully it doesn’t.” Ralph Lauren creates an image, a brand, at the corporate level. “And consistency, breeds longevity.” The common thread is presentation – Ralph Lauren invests a lot in its boutiques and its shop-in-shops.

• Commitment to attracting talent: Ralph Lauren hires three times as many YMA scholars as any other company!

• E-commerce as the future of retailing: the e-commerce customer who shops online and in-store is the most valuable customer. He or she spends 3.5 times as much as the customer who only shops in-store. The best online businesses are home, children’s, women’s, fragrance, and finally men’s.

• During the recession, Ralph Lauren actually did better than many of its competitors. Customers decided to buy less, but buy brand and quality.

• Evolution of the company: Ralph Lauren never once took an opportunity that would have threatened the brand and its long-term vision. But it is always evolving – in its merchandising, marketing. Even though its clothes all have the same classic, preppy feel, the styles are continually youn

Notes Compliments of Maggie Jiang

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