Word: polos
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Dates: during 2000-2009
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...strategy is shifting. To understand why, it helps to go back to his road show in the spring of 1997 to promote investment in his about-to-go-public company, Polo Ralph Lauren. An analyst asked Lauren a question that haunts him still: "You've been in business for 30 years; what do you have left?" Lauren brushed aside the question, and he got away with it--at first. With his initial public offering of stock, Lauren added $230 million to the company's capital and $440 million to his own fortune. The shares closed that...
...Despite a few quarterly snags, the company has almost doubled earnings per share since going public. Yet the stock price won't budge. Securities analysts are worried that Lauren relies too heavily on sales in U.S. department stores, which are losing market share. The analysts see Ralph Lauren and Polo as mature brands, incapable of the growth Wall Street had got used to in the late 1990s. They complain that Lauren, the CEO, won't communicate directly with them, leaving that to the company's financial officers. Roger Farah, Polo Ralph Lauren's president, responds that Lauren's time...
What Lauren has left is Europe. In fiscal 2002, which ended March 31, only 9.8% of Polo Ralph Lauren's wholesale revenues came from Europe. He also has Japan, which contributed just 10.5%. Come to think of it, his women's business is still smaller than his menswear, even though women spend twice as much on clothes. So he has that left. And Polo gets only 9.4% of its sales from accessories (Gucci earns 60%), so that's left to improve...
...first, Europe. In 1998 the company spent $200 million buying back its key licensee, Poloco SAS of Paris, which had been managing to increase sales in only the single digits, compared with double-digit growth in the U.S. And last summer Polo Ralph Lauren spent another $22 million buying out its Italian partner, PRL Fashions of Europe. A key Polo lieutenant, Lance Isham, moved from the company's New York City headquarters to London to oversee the company's international development, and an Italian, Gian Luigi Longinotti-Buitoni, who had most recently been CEO of Ferrari North America, was hired...
...year. Armani has announced a joint venture with four shoemakers. And Marzotto, the new owner of Valentino, has promised that Val will get his own accessories plant too. All this activity in the name of corporate control, and MADE IN ITALY on the label. Polo doesn't own a factory, doesn't make a single shirt or dress itself. "Owning a factory is a two-edged sword," says CEO Farah. "It works great on the way up. No one yet understands how it works on the way down." In other words, although Farah says Polo Ralph Lauren plans to move...