Analysis of and Recommendations for Ralph Lauren

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In an effort to recover, On July 29, 2016 Ralph Lauren Corp collaborated with the United States Olympic Committee to provide Team USA’s new apparel for the Olympic Games in Rio ("Press Releases", 2016). All of the uniforms were made in the United States and Ralph Lauren made sure of this by signing contracts with over 40 domestic partners. The wristbands were made in New York, the shirts in Massachusetts, and the boat shoes in Maine (Levine, 2016). Ralph Lauren’s manufacturing strategy for the uniforms helped evoke a strong feeling of Patriotism amongst Americans; thus markedly improving their brand’s image in the retail market.

Use of Twitter to Increase Public Image

In order continue to bolster their public image, The Polo Ralph Lauren Foundation started a charitable campaign on the social media platforms Twitter, Facebook and Instagram. For example, in 2016 using the hashtag #LikeToLight from July 29 to August 6 would prompt The Polo Ralph Lauren Foundation to donate $1 to the United States Olympic Committee’s Team ("Press Releases", 2016). This public relations campaign showed innovation on the part of company management and should reveal its success as quarterly sales results roll in over the next few months.

Ralph Lauren’s Twitter account gained some more positive publicity around the same time as the #LikeToLight hashtag. However, in this case Ralph Lauren was tagged in a tweet by the U.S. Olympic Team. Below is a picture of what the tweet said:

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This can be viewed as a public endorsement which furthers Ralph Lauren’s reach to consumers globally (Daye, 2016). However, Twitter was also used to stir up some controversy about Team USA’s t-shirts. Some pundits were saying that the red, white and blue stripes behind the Polo logo make the shirts look very similar to the Russian flag (Daye, 2016).

Change in Leadership Brings Hope to Brand

In 2015, Mr. Ralph Lauren stepped down from his chief executive position and announced that Stefan Larsson would replace him. Larsson was thought to be both highly and uniquely qualified for the job (Adams, 2016). After becoming president in 2012 of Old Navy, Larsson dramatically increased their sales. By hiring a number of designers from well-known brands such as Nike and Coach he was able to improve Old Navy’s styles (Woolf, 2015). Larsson’s experience with international expansion at Old Navy can be adapted to Ralph Lauren which further proves his worth as chief executive (Adams, 2016). These qualities along with the continued partnership with Mr. Lauren will hopefully revive the brand (Halzack, 2016).

Ralph Lauren’s Challenges

Despite the previously mentioned brand investments, Ralph Lauren still faces with a number of challenges. The first challenge talks about Ralph Lauren’s core brands, and how they need to be refocused on for sales to increase in the future. The second challenge deals with the effect both inventory and having brick-and-mortar buildings has on the profit. The final challenge has to do with Ralph Lauren’s current competitors within the industry. These challenges are explained in the following categories:

Declining Sales of Ralph Lauren’s Brands

Currently, Ralph Lauren has not been performing well in recent quarters. The company needs to initiate more strategies to transform its operating model. The three core brands are: Ralph Lauren, Lauren, and Polo Ralph Lauren make up 70% of sales while only being 30% of the styles. Since Ralph Lauren has so many brands and subsidiaries their core brands are being diluted which reduces consumer focus on them ("Forbes Welcome", 2016). On June 7, 2016, Stefan Larsson announced the “Way Forward Plan,” which would put more of a central focus on the core brands (Halzack, 2016).

Costs from Inventory and Brick-and-Mortar Stores

By having too much inventory, supply exceeds demand, thus causing discounting and moving of materials to outlets. Inventory costs severely eat away at profit margins. Improving the supply chain is key to Ralph Lauren’s turnaround. The new CEO Stefan Larsson plans on reducing the amount of time it takes products to reach the market from 15 months to 9 months ("Forbes Welcome", 2016). Larsson also suggests the adoption of an 8-week test pipeline that introduces a small amount of inventory in a physical store to gage global sales (Halzack, 2016). The pipeline would lower inventory costs and more importantly reduce the amount of discounting ("Forbes Welcome", 2016).

Another initiative Larsson plans on doing is closing approximately 50 stores that are not performing well financially. These changes are expected to save Ralph Lauren around $70 million in 2016 ("Forbes Welcome", 2016). He also plans on restructuring managerial positions costing about 1,000 people their job. The cutting of jobs is projected to save the company $90 million in 2016 ("Forbes Welcome", 2016). The money saved can be used to fund future projects such as endorsement and marketing ventures.

Intense Competition Within the Industry

There are many competitors to Ralph Lauren Corporation. Some top competitors are the Phillips-Van Heusen Corporation (PVH) and the Burberry Group. PVH is the world’s largest neckwear and dress Shirt Company, owning brands such as Izod, Michael Kors, Tommy Hilfiger, and Calvin Klein (“PVH Corp.”, 2016). The Burberry Group is similar to Ralph Lauren in that it is a luxury fashion retailer; however, it has British roots ("Burberry Group", 2016). Polo has some competitive advantage over these companies because factors such as their partnership with the Olympics, e-commerce marketplace and customers’ in-store experiences.

Recommendations for Future Growth

The Ralph Lauren brand continues to have strong staying power even in this competitive environment. There is always room for the brand to expand and capture more of the market in the opinion of many. Two recommendations to help reduce the impact of the brand’s current struggles are discussed below:

- Due to Ralph Lauren’s partnership with the U.S. Olympic team. the brand has been making Team USA’s uniform since 2008. The uniforms for the 2016 summer Olympics were all made in the United States. Previous years, Ralph Lauren had the uniforms manufactured abroad. A small recommendation Ralph Lauren