That’s the story of any good feud — especially a fashion one. Remember Calvin Klein and Linda Wachner? Or Bernard Arnault and Domenico De Sole? So the battle between Polo Ralph Lauren and Jones Apparel Group is no different. While the initial thought is that the strains in the marriage of revenues and royalties was mainly about money or wanting the licenses back, industry sources say otherwise.
Instead, Polo’s ire has been raised over the last year by Jones’s continual refrain that the Lauren by Ralph Lauren line is a "mature business." Polo, naturally, feels strongly otherwise and believes the line has plenty of room to grow.
Nor can it help the relationship that the Ralph line is far from hitting its hoped-for sales. The collection has sales of only $37 million a year when its target was $100 million.
When the contract was first signed, the executives on the Jones table were Sidney Kimmel, chairman and chief executive officer, and Jackwyn Nemerov, who was then president and chief operating officer. She was succeeded as president in March 2002 by Peter Boneparth, who succeeded Kimmel as ceo last May.
As reported, Jones is trying to keep the Ralph by Ralph Lauren license past Dec. 31, 2003, its current end date. However, Polo contends that it has the right to end the more lucrative Lauren by Ralph Lauren license held by Jones at the end of December 2003, three years earlier than its official expiration, because of the failure to meet minimums in the Ralph agreement. For 2002, the contracted minimum was $100 million, but Jones’ revenues from the Ralph license was just $37 million.
According to sources, Jones offered a licensing royalty for the two lines at between 10 and 12 percent, substantially higher than the typical apparel royalty rate of 5 to 6 percent. Sources also said Polo is seeking at least 3 to 4 more percentage points, something in the 15 percent range. Those sources also said the range sought by Polo is "nonnegotiable." So, perhaps, there is an element of the battle that’s about "the money."Neither Boneparth, nor Roger Farah, president and chief operating officer of Polo, would elaborate further about the matter, except to state that the parties are in negotiations.
One apparel industry executive said that Polo’s game plan, while Nemerov was still at Jones, was never to take back the business. However, the Polo executives believe that there are greater opportunities for Lauren. With $548 million in sales last year, Jones believes Lauren is past its peak, while Polo begs to differ. Polo executives are ready to take over the production of Lauren if the "opportunity arose," and a preliminary "what if" outline of a plan was circulated sometime in December, sources close to the company said. However, analysts question whether Polo has the infrastructure to deal with the manufacturing and distribution of such a collection.
As for the Ralph line sources noted that Polo’s ability as a vertical operator would give it better control over the destiny of the different Ralph Lauren labels. The younger and trendier missy consumer, the source said, could start with Ralph and then migrate to the more classic Lauren and then work her way up to Blue Label and ultimately the high-end collection and Black Label.
Indeed, the designer himself has kept mum about his view of the company’s future and what brands should be under the corporate umbrella. However, in Thursday’s earnings release, he issued a statement that hints at what may be Polo’s future: "The diversity of our Polo Ralph Lauren products enables us to reach all types of customers. By offering everything from Purple Label suits and the finest custom furniture to fragrances and the iconic Polo shirt, we reach all aspects of a complete lifestyle."
Wall Street analysts worry about how Jones would make up the lost revenues — $585 million for the two licensed labels — during fiscal 2004 and beyond. Jones’ Polo Jeans business, not a part of the dispute, generates between $400 million and $450 million in revenues for Jones.
On the apparel front, manufacturers and their licensees are keeping tab to track whether a "take-back" by Polo, after the money put into building the Lauren line by Jones, could set a new precedent for licensing arrangements, and the impact of the long-term future of licensing.Privately, industry observers note that Jones may feel like it has a bit of a chip on its shoulder. It reportedly lost out on the Izod women’s wear license, which Phillips-Van Heusen Corp. instead granted to Kellwood Co., at the last minute, and also didn’t land a license to do better jeans under the Calvin Klein New York label. Like their counterparts at Jones and Polo, officials at PVH and Calvin Klein declined comment.
Breaking News: @louisvuitton's men's artistic director @mrkimjones is leaving the French fashion house after nearly 7 years. Jones joined Louis Vuitton in 2011, following a three year tenure as creative director of British luxury goods brand Alfred Dunhill. Jones is to exit Louis Vuitton after showing his fall 2018 collection for the brand in Paris on Thursday. Read the full exclusive story on WWD.com. Link in bio. #wwdnews #wwdfashion
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews