Q&A: Ralph Lauren Now
Below is an excerpt of an article that ran in Women's Wear Daily:
- WWD: There’s so much going on at Ralph Lauren right now, not the least of which is the Polo Women’s launch. Why now?
R.L.: "All of a sudden Blue Label looked like Ralph Lauren’s less-expensive line. It needed an identity. So I thought that this is a good time to do Polo, and that the growth potential was fantastic. I built some men’s stores but I didn’t build men’s and women’s. I didn’t put them together. And that’s why I did it. I felt like I was ignoring a whole business that was sophisticated."
- WWD: As the head of a public company, you have to think about succession.
R.L.: "People ask me that all the time. I have a lot of good talent working in my company and we have a team of people; it doesn’t depend on one person, so my business won’t go down the drain if I’m not here tomorrow. I like to think that I’m vital to the company and that I’m exciting and important. I also know that I have built into this company people who are talented, who can do a good job and really understand everything I’m talking about…"
- WWD: You recently brought in Valérie Hermann to oversee luxury. What is your luxury strategy?
R.L.: "My luxury strategy is to almost divide the company on some level. We brought in Valérie as president of luxury so she’s going to look at what stores to show to. When you have a lot of different products sometimes it gets mixed and they use the high price to sell the low price and it doesn’t stand on its own. When you go into a private luxury store in Europe the voice is very clear: This is Gucci; this is Prada… They’re not department stores. So there is a difference.
Department stores are very important, their growth is very important. But at the same time, the specialty stores, the quality level, the voice comes out…"
- WWD: How do you spin off luxury internally? Valérie came in with Jacki [Nemerov, president and chief operating officer, Ralph Lauren Corp.] already here.
R.L.: "They work together. Jacki is a strong executive; she runs a big amount. They’ll work together and talk together; they’re not behind closed doors. [Valérie’s] mission is to build that specialty store sensibility, [make sure] that we’re not in the wrong stores and that we sell in the stores that we believe can carry the clothes. A lot of people say, 'Oh that’s Ralph Lauren; it’s not luxury.' They think you belong in one department. It’s clarity for the brand, it’s like cutting the company in half."
- WWD: How do you deal with it when someone major in the company—Roger Farah, for example—says “I’m retiring” or “I’m leaving?
R.L.: "Roger is one of the very good talents. I’d say that Roger really helped me have a successful company, someone I have great respect for. If he decides to go, then hopefully he’s built enough people behind him. Jacki was a licensee first and then I asked her to come here because I thought she was great. She’s now COO. She and Christopher Peterson who is [chief financial officer] work very well together; they’re both very smart. Roger’s not out of the company. He’s vice chairman. He’s here, but not as full-time as he was. But you need talent."
Takeaway From HEDGEYE's ALEC Richards:
It's very rare that you see this much candor from Ralph. He addressed a number of topics in this one-on-one, but we found the comments on growth drivers (Polo & International), succession plans, and the C-Suite particularly notable.
Editor's Note: This is a complimentary research excerpt from Hedgeye Retail Analyst Alec Richards. Follow Retail Sector Head Brian McGough on Twitter @HedgeyeRetail.