Posts Tagged 'Ralph Lauren'

Can near-luxury brands save themselves?

The question posed is especially relevant in today’s environment of sinking department store sales. Aspirational brands like Ralph Lauren and key handbag vendors are really struggling, and they are taking the approach of “less is more” when it comes to distribution. Here’s my recent comment from RetailWire:

Brands like Coach and Kors couldn’t grow fast enough, partly by overdistribution to department stores and partly by overexpansion of their own stores. Investors were happy while the category was hot, but the brands have been compromised at the same time that the demand for designer handbags is cooling off.

A strategy of deliberate scarcity makes sense in the short run (despite the volume hit), in order to rein in discounting and drive better sell-throughs. But the underlying issue remains: How to reignite consumers’ interest in near-luxury hanbags when they aren’t all that interested in visiting department stores at all.

Finally, I’m not sure that near-luxury brands like Coach and Michael Kors are ready and able to abandon the traditional department store as a key volume driver. Some of their recent problems fall on their own shoulders — the overexpansion of their own stores (hundreds in the case of Kors), the willingness to distribute their goods to off-pricers and their own outlet stores, and the failure to cherry-pick the best anchor locations. It’s not an exact parallel, but Apple has always been selective about being in “the right mall,” not every mall — and it’s a lesson that aspirational brands should learn as they continue to do business with department stores.


Ralph Lauren and the luxury malaise

I commented recently (on RetailWire) on the problems faced by the new CEO at Ralph Lauren. How to be more nimble and efficient while also protecting an iconic brand? Here are a few thoughts:

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 RL brand.

Ralph Lauren hires outside the luxury box

The management transition has begun at the company Ralph Lauren founded years ago. He’s hired the head of the Old Navy division, whose previous background was at H&M. Here’s my comment, from RetailWire:

Time will tell whether Mr. Larsson’s evident business acumen extends to the importance of brand image at Ralph Lauren. More than almost any company crossing multiple retail channels, Lauren has maintained a focus on near-luxury (and higher) lifestyle merchandising. Most people know what the Lauren brand stands for, which is a credit to Mr. Lauren’s vision and consistency over the years.

You have to assume that Ralph Lauren was sold on Mr. Larsson’s own vision for the company, not simply his ability to manage fast fashion or global sourcing. But clearly some kind of management succession at a big public company like RL was bound to happen, and probably overdue.

Ralph Lauren: Why does the brand still work?

A brief comment (below) from RetailWire about Ralph Lauren and why its brand management has been among the best in the business:

Ralph Lauren is a great example of a brand that has stayed true to its aspirational position. It has successfully addressed different retailers’ price point requirements (as well as the higher prices in its own stores) while keeping a very consistent “lifestyle” point of view. It’s an object lesson to other consumer brands: You don’t have to reinvent yourself every year to stay fresh and relevant.

Designer goods, mass appeal

A recent New York Times column about “Fashion Week” focuses on Tory Burch, who is succeeding not only on the strength of her design but also based on well-positioned price points…moderate by the standards of the runway industry. There is no doubt that the economic slowdown over the last year has had a devastating effect on the sales of high-end goods, and luxury retail is the toughest segment of the industry. The question is whether we are looking at a sea-change or merely a dip in the demand for high-end goods. My guess is the latter, and several luxury retailers are reacting accordingly.At the same time, “design for the masses” continues to push aspirational goods down the distribution channel. Norma Kamali for Walmart is one example…Vera Wang at Kohl’s is another. Some of these (like the Ralph Lauren “American Living” initiative at JCPenney) preceded the recession but the timing was right: The volume base for most designers is shrinking too rapidly for them to depend only on the growth of high-end retail.