I’m a Ralph Lauren aficionado. Long a fan of the brand and its overarching idea, “The World of Ralph Lauren,” I continue to think it is the best articulated and most consistently executed brand in the fashion, apparel and retail sector — and beyond. I’ve written several articles about Ralph Lauren for this publication, beginning in 2014, explaining how the brand is defined and controlled in every aspect — from an identifiable product, to romantic and aspirational advertising, to its relationship with customers across media. Ralph Lauren’s unique image is communicated effectively in its own brand-enhancing designed stores and in-store shops in 1100 U.S. department store doors, on its online platform, and in four restaurants and five coffee shops across the globe.
Ralph Lauren said recently of the pandemic, “through it all, we are focused on continuing to build a business that stands the test of time – staying true to who we are while taking action that enables us to deliver our brand vision for decades to come.”
Ralph Lauren has been a mainstay of fashion now for more than 50 years. A combination of quintessential American style with iconography from the American West to the shores of the East Coast WASP establishment, and now an exemplar of diversity and multi-culturalism, “The World of Ralph Lauren” is a sublime fantasy of a life well-lived in perfect timeless style and taste.
Ralph Stars in a Movie
Ralph Lauren who has long taken inspiration for his brand from the old glamour of 1930s and 1940s Hollywood – women in slinky silk satin dresses, men in white tie, sipping martinis in night clubs with a backdrop of art deco interiors — is now the star of his own film. The HBO documentary, “Very Ralph,” which debuted in late 2019 tells the story of Ralph’s humble beginnings in the Bronx – always stylish even then notes his fellow Bronx native, Calvin Klein. Using archival family and company photographs and film, “Very Ralph,” describes Ralph Lauren’s courtship and marriage to his muse, Ricky, herself raised in the Bronx, but with the looks of a Wasp princess. The film chronicles Ralph’s journey from tie salesman to creator of the lifestyle megabrand that is today a $6.2 billion-dollar global public company. Though somewhat shy in front of the camera, you can see how Ralph Lauren is more than the progenitor of his brand: he is living it and refining it daily through his personal style and surroundings, with his gorgeous family and devoted associates, and in his luxurious homes and estates, each an actual World of Ralph Lauren.
The film is worth watching — particularly during the pandemic when the glamour and excitement and interest in fashion may seem a thing of the past. It is a lesson in vision and humility, of some setbacks, and of firsts and achievements, many now taken for granted in the industry.
Restaurants Enhance the Brand
Ralph Lauren added restaurants to “The World” with the opening of RL in the Michigan Avenue, Chicago flagship in 1999, followed by Ralph’s in Paris in 2010, New York’s Polo Bar in 2014 and Ralph’s in London in 2017. The company sees the restaurants as “a natural extension of the World of Ralph Lauren as expressed through the culinary arts.” Each of the restaurants exudes the Ralph Lauren ethos, in design and accoutrements representing little miniature worlds of Ralph Lauren. Beef in the form of hamburgers and steaks are flown in from Ralph Lauren’s private ranch in Colorado (as available). Each of the restaurants has been successful in bringing customers to the door and creating a niche for the stylish and well-heeled. All of the restaurants are currently closed “because we think of you as family and our concern during these uncertain times is your well-being and the well-being of our hospitality team.” But there is a daily line for Ralph’s Coffee (or hot chocolate) outside the women’s ‘Mansion’ on East 72nd and Madison. Mostly young customers, some with strollers and children in tow, wait in the cold for a chance to get the coffee and then to sit at an outdoor table, some with umbrellas, none with heaters, to be in the “World” and to socialize as if it were normal times.
Where’s the Beef?
I’ve long been a burger lover. Starting at backyard barbeques, eventually graduating to designer burgers — those priced $20 or more – always including fries, an important component. Expensive taste in burgers is not the same as expensive taste in other luxuries and, happily for me, one that I can indulge.
I did order a Polo Burger the only time I dined at the Polo Bar in New York. Ralph’s Polo Burger was indeed one of the best, if not the best, I’d ever tasted. About a month ago I enlisted two friends to order burgers from the Polo Bar — “you mean you can just order; you don’t have to know anyone to get it?” asked one friend. The experience was seamless, from placing the $28 (each) burger order, to the timely food delivery, presented in perfectly matched dark green, The Polo Bar Ralph Lauren, thermal bags with instructions on heavy paper stock notecards. The experience was all in keeping with the Ralph Lauren brand. The burgers arrived hot at the appointed time; they are served with chips, not fries, addictive, and delicious. Imagine the complexity of maintaining brand integrity in food service and delivery during a pandemic. It seems that this small corner of the World of Ralph Lauren has done just that.
The Pandemic Creates an Opportunity
Ralph Lauren’s business suffered like all retail and apparel businesses during the pandemic. Revenue declines were greater than some apparel companies who sell leisure wear. From the first to third quarter 2020 – the height of the pandemic, revenues fell nearly 40 percent. But the company used the down time to continue its consolidation – fewer stores and employees — and to keep executing its strategic plan. The company was able to maintain balance sheet strength and liquidity, announcing organizational restructuring: read downsizing. Savings of $180 to $200 million will come from reducing the global workforce by the end of FY 2021. The pandemic also allowed the company to fast track its digital transformation. Global owned digital sales increased in all regions, with North American digital sales growth in the high teens. As part of the streamlining, the Chaps brand will become a completely licensed business. Despite year-over-year declines, analysts liked the results positing that Ralph Lauren’s business will rebound well when life resumes some normality and people can dress up, shop, go to an office wearing office-appropriate clothing, dine out, go to parties and events and travel as they once did.
Cuts and Contributions
Ralph Lauren will not take his salary or bonus for fiscal year 2021. CEO, Patrice Louvet will take a 40 percent salary reduction. All 140 members of the executive leadership team will see a 20 percent 2021 salary reduction. Board members will forgo quarterly cash compensation. During the peak of the pandemic the company made masks and PPE. The Ralph Lauren Corporate Foundation donated $10 million dollars to colleagues who were affected by the pandemic, to the World Health Organization and to those affected in the American fashion industry through the CFDA.
In the second quarter earnings announcement on October 29, 2020, Ralph Lauren stated that “the strength of our timeless brand and the values that have always been our touchstone continue to anchor us through this period of change and uncertainty.” CEO Louvet added that the company will continue “the hard but necessary work … to position the company for future growth.” Still the company notes a “high level of uncertainty” related to Covid-19. They expect financials will be “adversely affected” in both the 3rd quarter and for the full fiscal year 2021.
The Brand Counts
Despite the declines, analyst ratings have been positive. It is the continuing strength of the brand that accounts for this positivity. As the most recent Morningstar report said, “While Ralph Lauren is navigating through a difficult period … its intangible brand asset remains solid.” I agree. The brand which has been built and cultivated for over 50 years is what gives the company value. As long as consumers want to be a part of “The World of Ralph Lauren,” whether through a polo shirt or a crewneck sweater, an evening dress, blazer, suit, cup of coffee or hamburger, the aspiration of having a piece of that world will continue to create value going forward. Ralph Lauren said recently of the pandemic, “through it all, we are focused on continuing to build a business that stands the test of time – staying true to who we are while taking action that enables us to deliver our brand vision for decades to come.” To my eye the company is doing just that. Bravo!