Ralph Lauren: The Way Forward

Like most of us, I feel as if I’ve been buying Ralph Lauren apparel and home goods forever so it came as a shock to read that in a two-year period sales and profits for the company have fallen by 50%.

Ralph Lauren, 72^nd Street in New York City

In view of this alarming news the $8 billion company is planning a major restructuring with a 41-year-old Swede, Stefan Larsson at the helm as CEO and Lauren himself staying on as chief creative officer and chairman. Larsson has 18 years experience in retailing: first at H&M and then at the Gap’s Old Navy. As reported in the Financial Times, 7/11/16 by Jo Ellison, the facts are brutal and startling. Here are the salient points of an agenda termed The Way Forward.

THE OVERALL

This plan will involve 50 store closures, 1,000 job losses and a restructuring that will remove three of the nine layers of management that stand between Larsson and “the actual doer doing the work” as he puts it.

THE REFOCUS

It also means a refocus on the best-selling “core” products of the RL brand – classics such as the “blazer, the double-breasted jacket, the chinos and biker jacket.” [My comment: This is not a new approach by any means. Four years ago, I wrote about Steve Jobs and how, in 1996, he returned to Apple for the first time since his firing 11 years earlier. His first move was to cut 70% of Apple’s product offerings and focus on four areas: two for professionals and two for consumers. He also fired more than 3,000 employees.]

Ralph Lauren //  Photo: Courtesy of Hampton’s, Fourth of July issue

THE TIMING

Clothing production lead times will be cut from 15 to nine months, to maximize the time that full-price stock stays in the stores. And, a “continuous test pipeline” will be introduced, where certain lines will be ushered through development on to the shop floor within eight weeks.

THE CHANGES

Larsson is one of a new breed of chief executives who have crossed over from everyday retailers into the exclusive world of luxury. He is making changes that reflect broader trends in luxury retailing simply because the traditional luxury brand business model has confused millennial consumers shopping online.

Ralph Lauren  //  Photo: Courtesy of Hampton’s, Fourth of July issue

THE APPROACH

Larsson joined Stockholm-based H&M because the 25-year-old was told he would join a team that would transform the then “scrappy” company into one of the biggest fashion retailers in the world. During his time, H&M became known for its very successful collaborations with leading designers. [See our blog, A Countess and a Creator that reports on Olivier Rousteing of Balmain]

THE FUTURE

Larsson works with a small, loyal team and he works fast. “He has a nose for finding the right people,” says a colleague. “He’s not someone who wants to get along with everybody. He has an agenda and he knows the only way to do it is to go fast. He has no scruples about getting rid of people and putting his own team in. It’s important for him to make changes.”

MAY WE SUGGEST…

We’re heading for September so it’s time to take stock of your wardrobe. Check out our ultra-soft leggings and our terrific selection of layering tops. You’ll find scoop, boat, crew and V-necks for you to choose from with either long or three-quarter sleeves in a wide range of exciting colors. 

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