The fashion group’s plans for expansion of its own retail operations, particularly in southeast Asia, was one of the main topics of discussion at the company’s annual meeting at the St. Regis Hotel in Manhattan on Thursday. Roger Farah, president and chief operating officer, told shareholders, “By the end of 2010 or 2011, we will be disproportionately invested in new store growth.”
Citing the acquisition in February of its southeast Asia wholesale and retail distribution operations from Dickson Concepts International Ltd. and its 85 doors, effective Jan. 1, 2010, Farah said the company will be “adding to that in the years to come.”
The southeast Asia region for Polo covers China, Hong Kong, Malaysia, Indonesia, Singapore, Taiwan, the Philippines and Thailand.
While the company’s roots are in wholesale apparel, specialty retailing generated more than half of Polo’s revenues for the first time six years ago, in the first quarter ended June 28, 2003. Over the years, as Polo bought some of its licensees or took licenses in-house, the focus shifted back toward wholesale even as retailing grew. The moves allowed the firm to better control the quality, distribution, image and growth of the company as a whole.
However, the focus seems to be shifting back to retail once again. In the first quarter ended June 27, retail sales represented 45.2 percent of total revenues of $1.02 billion. This compares with the first quarter of 2008, when retail accounted for 44.2 percent of total revenues of $1.11 billion.
Following the meeting, Farah hinted the company’s retail expansion will likely be focused primarily on international markets. He said Polo is reviewing licenses that are coming due in 18 months in South Korea, Australia and New Zealand.
Ralph Lauren, chairman and chief executive officer, told shareholders the company’s vintage-inspired Double RL label is one of the firm’s newer categories that perhaps could be expanded at some point. There are two Double RL stores currently, in New York and Los Angeles.
Breaking from the traditional format of past annual meetings, the company for the first time provided a video compilation that showcased the breadth of Polo’s businesses. Highlights were the different fashion collections and the launch of its watch business and Notorious fragrance.
Included were store openings in Paris, Istanbul, Dubai and Seoul. The company boasted of being the first to roll out mobile shopping, as well as of having large touch screens at different Rugby stores last year that allowed shoppers to find out item prices without having to step inside the store. Clips included the unveiling of the restored Old Glory, the flag that flew over Fort McHenry and inspired Francis Scott Key to write “The Star Spangled Banner,” at the Smithsonian National Museum of American History. The company in 1998 donated $13 million for the 10-year restoration project.
“I hope it gives you a sense of what goes on day-to-day in our company,” Lauren said.
The designer told the audience of approximately 250 shareholders, company executives, board members and guests that Polo is confident about its future because the company has both conviction and focus. “We are not waiting for others to tell us what to do. We lead because we have conviction about our style and taste,” the chairman said.
Despite his confidence, he conceded events since the firm’s last annual meeting had been trying. “We have gone through a very tough time this year. In all the years, I haven’t seen anything like that…but we’re managing to stay the course.”
His key takeaway to shareholders: “Companies that don’t know who they are will disappear. I want you to know we are confident.…We keep going forward.”
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