In 2007, Ralph Lauren's approach to sustaining the luxury apparel brand's enduring growth involved a greater emphasis on the discount He revealed his strategy to Fortune previously, which involved launching a dedicated brand for the budget retail chain J.C. Penney. This led Fortune to question, "Is he truly capable of selling anything to everyone?"
Eighteen years later, my dear reader, I can definitively state that no, he absolutely cannot.
Following my report on the company, the subsequent decade witnessed a significant downturn in both sales and profits, reversing a period of near-constant expansion. Since its establishment in 1967, Ralph Lauren's reputation for luxury has been steadily eroded by years of markdowns in struggling department stores.
When Patrice Louvet took over as CEO in 2017, he was tasked with revitalizing the prestigious image of America's premier fashion house. Louvet commenced the process of distributing the brand across 1,000 department stores, representing two-thirds of the locations where it was currently available. The company discontinued some of its less expensive brands to concentrate on its premium lines, such as Purple Label and Double RL. He also boosted advertising, targeting younger consumers with a marketing strategy that evoked fond memories of past fashion trends and superior clothing quality.
In an interview for this piece, Louvet explained that the company needed to return to the founding principles established by Ralph, noting that this was essential. The strategy appears successful: In a decade, the average cost of a Ralph Lauren product has doubled, with significantly fewer items being relegated to clearance. Additionally, a throng of people queues for a coffee at the 30 Ralph's Coffee establishments.
The articles published by Fortuneover the years concerning Ralph Lauren provide significant insights into business strategies. The key lesson is not to discourage brands from innovating, but to emphasize the importance of self-awareness and the discipline to discern the appropriate moments for such endeavors. Adjust your approach (omitting the Penney mention) and when to stick with a concept (the jeans enterprise, now flourishing, required years to gain traction).
In 1996, Lauren explained to Fortune that his aim was to offer people an authentic, uplifting essence, free from pretense. Nearly three decades onward, that remains his core principle for managing his own company, which now sees its stock trading close to its peak values, and Whose style authority remains undiminished.