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About Ralph Lauren Corporation

Ralph Lauren Corporation is galloping at a faster clip than when its namesake founder first entered the arena over 45 years ago. With golden mallet brands such as Polo by Ralph Lauren, Chaps, RRL, Club Monaco, and RLX Ralph Lauren, the company designs and markets apparel, footwear, accessories, home furnishings, and fragrances. Its collections are available at over 11,000 stores, majority of which are specialty stores worldwide, including many upscale and mid-tier department stores. It operates 500-plus retail stores as well as about 655 concession-based shops-within-shops and trades online as well. In addition, their international licensing partners operate about 85 Ralph Lauren stores, more than 30 Ralph Lauren concession shops, and nearly 140 Club Monaco stores and shops.

Operations

Ralph Lauren rings up sales via three principal channels: Retail, Wholesale, and Licensing.

The company's Retail operation, which generates more than 60% of revenue, sells directly to consumers through more than 500 retail stores and more than 650 concession-based shop-within-shops in North America, Europe, Asia, and Latin America; and via its retail e-commerce channel in North America, Europe, and Asia.

Wholesale operation which generates nearly 40% of revenue sells Ralph Lauren products to major department stores and specialty shops, such as golf shops, throughout North America, Europe, the Middle East, the Asia/Pacific region, and Latin America.

Ralph Lauren's Licensing business accounts for less than 5% of sales and sells unrelated third parties the right to operate retail stores and to use its trademarks in connection with making and selling designated products, such as apparel, eyewear, home furnishings and fragrances in specified geographical areas for specified periods. Partners include Hanesbrands, L'Oréal, and Luxottica, among others.

Geographic Reach

New York-based Ralph Lauren structures its business along geographic lines, reporting sales for North America, Europe, and Asia/Pacific. North America represents more than half of Ralph Lauren's annual sales, Europe more than 25%, and Asia/Pacific more than 15%.

Of its 500 or so retail locations, more than 300 are factory (outlet) stores, 60% being in the US and 20% in Europe and Asia, respectively.

Ralph Lauren does not own any factories and depends on more than 500 manufacturers to produce its products, primarily in Asia, Europe, and Latin America. Nearly 30% of their products are sourced from China.

Sales and Marketing

Ralph Lauren primarily wholesales menswear, womenswear, childrenswear, accessories, and home furnishings. Through a limited number of premier fashion retailers, the company peddles its collection brands worldwide. In North America, department stores are a major wholesale customer. In Latin America, wholesale products are sold in department stores and specialty stores. In Europe, Ralph Lauren wholesales to both department stores and specialty stores, depending on the country. Also part of its sales efforts, Ralph Lauren distributes products to licensed stores operated by franchisees in Europe, Latin America, the Middle East, and Asia.

Ralph Lauren records annual advertising spend of around $250-300 million.

Financial Performance

Ralph Lauren has reported a concerning downward revenue trend over the last five years but profits remain respectable.

In fiscal 2020 (ended March 30) the company's sales decreased by 2% to $6.1 due to the decreased in sales in all the reportable segments. The decline in the segment's revenue was driven by the decrease in wholesale business due to a weaker demand, net unfavorable foreign currency effects and the COVID-19 business disruptions.

Net income decreased by $46.6 million to $384.3 million in Fiscal 2020 as compared to Fiscal 2019, primarily due to a decrease in operating income reflecting adverse impacts related to COVID-19 and Hong Kong protest business disruptions, partially offset by a $209.5 million decrease in income tax provision largely driven by the combined impact of international and domestic tax reform.

Ralph Lauren's cash on hand increased $1 billion during fiscal 2020, ending the year at $1.6 billion. The company's operations generated $754.6 million, offset by the $702.1 million used in its investing activities and $438.2 million used in its financing. Ralph Lauren's main cash uses in fiscal 2020 were purchases of short-term investments, share repurchases, dividends, and capital expenditures.

Strategy

To continue to deliver sustainable, profitable growth for shareholders, Ralph Lauren developed a long-term growth strategy which will focus on identifying new or underpenetrated markets, attracting new customers particularly in new markets, identifying freestanding and department store locations, hiring and training competent store personnel and integrating new store shop-within-shops. Implementation of this strategy will involve expansion of the company's multi-channel distribution network, including international markets such as China.

Ralph Lauren continues to develop digital editorial initiatives and a wide array of video and social media content. The company deploys these advertisements through online, mobile, video, email and social media. This allows it to convey key brand messages and lifestyle positioning. Ralph Lauren also provides point-of-sale fixture to its wholesale customers to enhance the presentation of products at retail locations.

Company Background

In late 2015 CEO Ralph Lauren announced he was leaving the executive suite and named Stefan Larsson, the former head of Gap's Old Navy, as his replacement. Lauren will continue his involvement with his namesake firm as the chairman and chief creative officer.

Ralph Lauren began buying out its licensees several years ago. In 2011, the company acquired its South Korean wholesale and retail distribution operation from licensee Doosan Corp. for about $47 million. It bought out its licensing partner Dickson Concepts in a deal valued at about $37 million in 2009. Dickson was a licensee for the Polo brand in China, Hong Kong, Indonesia, Malaysia, the Philippines, Singapore, Taiwan, and Thailand. Ralph Lauren also acquired the children's wear and golf apparel inventory of former licensee, Naigai Co. Ltd., based in Japan.

To support other high-growth business opportunities and initiatives, Ralph Lauren in 2012 began to wind down its Rugby brand retail operations. As part of the closure plan, 13 of the company's 14 global freestanding Rugby stores and its related domestic e-commerce site, Rugby.com, were closed during fiscal 2013, and the one remaining Rugby store was shuttered during fiscal 2014.

Ralph Lauren Corporation

650 Madison Ave
New York, NY 10022-1029
Phone: 1 (212) 318-7000

Firm Stats

Employer Type: Publicly Owned
Stock Symbol: RL
Stock Exchange: , NYSE
Chairman and Chief Creative Officer: Ralph Lauren
Vice Chairman and Chief Innovation Officer: David Lauren
President, CEO, and Director: Patrice J. L. Louvet
Employees (This Location): 500
Employees (All Locations): 24,900

Major Office Locations

New York, NY

Other Locations

Foley, AL
Leeds, AL
Anthem, AZ
Chandler, AZ
Glendale, AZ
Phoenix, AZ
Alpine, CA
Barstow, CA
Beverly Hills, CA
Cabazon, CA
Camarillo, CA
Carlsbad, CA
Costa Mesa, CA
Gilroy, CA
La Jolla, CA
Livermore, CA
Los Angeles, CA
Malibu, CA
Napa, CA
Ontario, CA
Palm Desert, CA
Pismo Beach, CA
San Diego, CA
San Francisco, CA
Santa Clara, CA
Santa Monica, CA
Vacaville, CA
Aspen, CO
Castle Rock, CO
Loveland, CO
Clinton, CT
Greenwich, CT
New Canaan, CT
Destin, FL
Ellenton, FL
Estero, FL
Fort Myers, FL
Miami, FL
Miami Beach, FL
Naples, FL
Orlando, FL
Palm Beach, FL
Saint Augustine, FL
Sunrise, FL
Vero Beach, FL
Atlanta, GA
Calhoun, GA
Commerce, GA
Dawsonville, GA
Locust Grove, GA
Mcdonough, GA
Savannah, GA
Valdosta, GA
Waipahu, HI
Williamsburg, IA
Aurora, IL
Chicago, IL
Edinburgh, IN
Michigan City, IN
Kansas City, KS
Simpsonville, KY
Boston, MA
Lee, MA
Nantucket, MA
Natick, MA
Wrentham, MA
Chevy Chase, MD
Queenstown, MD
Freeport, ME
Kittery, ME
Auburn Hills, MI
Birch Run, MI
Byron Center, MI
Howell, MI
Novi, MI
Troy, MI
Albertville, MN
Minneapolis, MN
Branson, MO
Osage Beach, MO
Gulfport, MS
Blowing Rock, NC
Concord, NC
Greensboro, NC
High Point, NC
Kernersville, NC
Mebane, NC
Nags Head, NC
Smithfield, NC
Merrimack, NH
Tilton, NH
Flemington, NJ
Jackson, NJ
Lyndhurst, NJ
Paramus, NJ
Princeton, NJ
Short Hills, NJ
Santa Fe, NM
Las Vegas, NV
Central Valley, NY
Deer Park, NY
East Hampton, NY
Elizabeth, NY
Lake George, NY
Manhasset, NY
New York, NY
Niagara Falls, NY
Riverhead, NY
Southampton, NY
Virginia Beach, NY
Waterloo, NY
White Plains, NY
Aurora, OH
Burbank, OH
Jeffersonville, OH
Monroe, OH
Oklahoma City, OK
Woodburn, OR
Hershey, PA
King Of Prussia, PA
Philadelphia, PA
Pottstown, PA
Tannersville, PA
Washington, PA
Bluffton, SC
Charleston, SC
Gaffney, SC
Myrtle Beach, SC
Lebanon, TN
Sevierville, TN
Allen, TX
Austin, TX
Dallas, TX
Fort Worth, TX
Houston, TX
Katy, TX
Mercedes, TX
Round Rock, TX
San Marcos, TX
Texas City, TX
Park City, UT
St George, UT
Leesburg, VA
Mc Lean, VA
Williamsburg, VA
Woodbridge, VA
Manchester Center, VT
Quil Ceda Village, WA
Seattle, WA
Baraboo, WI
Johnson Creek, WI
Kenosha, WI
Oshkosh, WI
Scandicci, Italy
Burnaby, Canada
Calgary, Canada
Cookstown, Canada
Edmonton, Canada
Etobicoke, Canada
Georgetown, Canada
Halifax, Canada
Kanata, Canada
Markham, Canada
Mirabel, Canada
Mississauga, Canada
Montréal, Canada
Nepean, Canada
Niagara Falls, Canada
Niagara On The Lake, Canada
North York, Canada
Ottawa, Canada
Richmond, Canada
Scarborough, Canada
Thornhill, Canada
Toronto, Canada
Vancouver, Canada
Victoria, Canada
Windsor, Canada
Winnipeg, Canada
Cannes, France
Miramas, France
Paris, France
Serris, France
Ashford, England
Bicester, England
Ellesmere Port, England
London, England
Swindon, England
Metzingen, Germany
Glasgow, Scotland
Singapore, Singapore
Seoul, South Korea