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NEW YORK — Ralph Lauren clearly is equipped for all kinds of questions.
At Polo Ralph Lauren’s 2006 annual meeting on Thursday, the company’s chairman and chief executive officer patiently answered queries by shareholders Philip Berman and Harry Korba, and often retorted with humor, which resulted in a few chuckles from the crowd.
“Where do you think low-rise pants are going?” New York portfolio manager Berman said.
“They’re going down,” Lauren quipped, triggering much laughter. “They’re going up. Don’t ask me. I can talk about directors, not low-rise jeans.”
As in previous years, the annual meeting was held in the gilded rooms on the 20th floor of the St. Regis Hotel here. There were about 100 people in attendance, 60 to 75 of whom were not connected with the firm. The audience included senior Polo executives such as David Lauren, Charles Fagan, Scott Bowman, Alfredo Paredes and Buffy Birrittella. Many of the shareholders wore immaculately tailored pinstripe navy suits, most likely from Lauren’s Black Label collection.
“Forty years ago I started this company and I started it by delivering some ties to stores wearing a bomber jacket,” Lauren said in his brief remarks. “Today we are a global company.”
Lauren underscored the point by alluding to the company’s recently opened flagships in Milan and Tokyo, and the two Russian stores expected to open in spring. The secrets of Polo’s success, he added, are the multiple brands that the company will nurture and grow with the “great team led by Roger Farah,” Polo’s president and chief operating officer.
“It’s a business based on a whim, or on fickleness,” he said, adding, “Forty years is a beginning, not an end, of our business.”
Lauren has every reason to brim with confidence. Polo continues to be one of the healthiest and fastest-growing fashion and luxury businesses, with a focus on growing through freestanding retail stores, including the further rollout of Rugby stores and Polo flagship openings around the world. In the company’s first quarter, which ended July 1, income increased by 58 percent, while revenues leaped 26.8 percent. That’s on top of last year’s 298.5 percent jump in net profits in the same quarter. First-quarter income was $80.2 million, while revenues rose to $953.6 million. For the fiscal year, income jumped 61.8 percent to $308 million from $190.4 million a year ago. Total revenues rose 13.3 percent to $3.75 billion from $3.31 billion.
Lauren discussed the new store opening in Russia and noted the company has evolved globally because “we did it with a focus.” He listed brands such as Lauren, Rugby and Double RL, and said: “These are brands all with a future.”
When the floor was opened for questions, annual meeting veteran Korba, a shareholder from Yonkers, N.Y., jumped to the microphone.
“I saw you in my dreams last night,” Lauren quipped.
Korba made a point of voicing his discontent with elements of the annual report. Describing the “very fine picture” of Lauren to the left of his letter to shareholders, Korba suggested running it in color rather than black-and-white, and putting a big smile on Lauren’s face. Korba then went on to lament that a spread showcases the facade of the Tokyo flagship rather than the Rhinelander mansion on Madison Avenue and 72nd Street. “Not all stockholders live in New York,” said the chairman.
Berman asked Lauren why there was only the Club Monaco store, and not any Ralph Lauren stores, at the Garden State Plaza, which he said is a benchmark that many Wall Street analysts use to gauge retail traffic and sales.
Lauren replied that the company does well because its goal has always been to “find the audience, then decide where to do it and then find the right store.”
Asked by Berman how Lord & Taylor’s new ownership could impact Polo’s business, Lauren said he was meeting with the new owners. “Lord & Taylor is a good store whose direction has to be defined,” he said, emphasizing, “We keep doing our business and we don’t rely on one store to make or break our business.”