Ralph Lauren´s New Face

Is this a new time for Ralph Lauren? This question was frequently asked last week in Wall Street after Credit Suisse’s note, which ensured the new strategy to increase the product segmentation units, and proposed a more clear and distinct business to begin the positive change starting in 2017. But, what does this really mean?

Ralph Lauren has suffered in the Stock like every business due to the weakness of the Asian markets and the strength of the dollar. However, and although the company has continued to outperform the market in close quarters, there were huge doubts about its implementation and sales in Asia – in addition to its line of HC, which tends to repeat model over the decades changing the clothing. A person who owns a Ralph Lauren from Prêt a porter is considered to have everything.

In this situation, the multinational with headquarters in New York announced a global restructuring of its personnel by 5%, which will include firing about 750 employees. 60% of employees of Ralph Lauren are in the US, and according to the statement of the multinational itself, many jobs have redundancy, so it is common sense to lighten the personnel. Also as part of the new operational model announced in February, by which they seek to save about 100 million dollars in two years.

Within this new strategy is also clearly – to not consolidate luxury brands «of RL, ie POLO, including the iconic and strengthen Prêt à porter, possibly displacing some of the shows that are made annually to Europe.”The European mark remains central to the luxury industry, global buyers understand that the HC or Prêt a Porter has a plus if Europe goes through,» said analyst Ana Simons Wall Street the luxury sector.

In fact, the men’s collection was presented at the Fashion Men’s Week in Milan for the first time. «The outfit of man made in America was sold worldwide, Ralph Lauren is an American multinational that has a recognizable, own style, with clothes and quality accessories, but it lacks the stamp of «luxury» because customers interpret it as «affordable luxury,» even in its high-end luggage weekend for example, costing more than $2,000,» claims Simons, «so if in Europe RL is interpreted, it will be more than a «luxury weekend,» and the RL global sales will probably increase.»

Credit Suisse analyst Christian Buss, understands that determination in the «realization of the business units is beginning to show good results.» The fact that there is a clear separation between Premium and Luxury brands within the same holding, and to make it clear to the customer that it is essential to regain the brand’s image and sales.

In New York, RL maintains its different separate FlasgShips, while Polo RL is located on Fifth Avenue, and has coffee and trendy restaurant in the city, the Flagship of the luxury brand for men and women is located in Madison street and 72th, in the Upper East Side. The average price difference between both stores is very high, for example, the difference in a women’s blouse would be about $ 800.