Meichner and Fagan Tapped to Lead Polo’s Global Retail Charge
NEW YORK — Polo Ralph Lauren is spurring its global retail growth with two key appointments. The company Friday tapped Wayne Meichner as president of Polo Retail and Charles Fagan as executive vice president of global retail brand development....
NEW YORK — Polo Ralph Lauren is spurring its global retail growth with two key appointments. The company Friday tapped Wayne Meichner as president of Polo Retail and Charles Fagan as executive vice president of global retail brand development.
One of the duo’s first initiatives will be the opening of a new store format to sell Polo’s Blue Label bridge line. Polo launched Blue Label at retail last month and has projected the line could do $100 million wholesale worldwide in its first year. Until now, Polo has not confirmed its plans to open freestanding Blue Label stores.Meichner’s appointment confirms a report in these columns Tuesday. Meichner, 45, takes over the duties formerly handled by Fagan, 39, who moves into a newly created role at Polo.A 23-year veteran of Saks Fifth Avenue, Meichner will manage Polo’s 35 domestic stores. He reports to Bridget Ryan Berman, president and chief operating officer of Polo Retail Group, which has responsibility for Polo’s entire 150-store domestic group consisting of both Polo Ralph Lauren and outlet stores.Fagan, a 16-year Polo veteran, will direct the integration of merchandising, advertising and marketing strategies within the store environments in the company’s 173 domestic and international stores, as well as the 100 stores the company currently licenses in 27 countries. He reports to chairman Ralph Lauren on creative issues and Berman on administrative issues.“Our commitment over the last seven years has been to focus on the growth of the retail business, both in the U.S. and internationally,” said Roger Farah, president and chief operating officer of Polo, in an exclusive interview. “We’ve made these moves to strengthen our team, our processes and to build stores. This is an important step for us on many different levels.”Farah pointed out that the retail division generates 40 percent of the company’s $1.98 billion of annual sales “and is the fastest-growing part of our business and an important part of our go-forward capital allocation.”In addition, Farah stressed that displaying a consistent image throughout all the Polo stores is critical to the retail division’s growth. “We need to communicate the same message around the globe at the same time. Charles has the background and experience in store design and retail to communicate that message on a global basis,” said Farah.Meichner’s appointment at Polo reunites him with Farah, who served as general merchandise manager of men’s at Saks while Meichner was a buyer. “I’ve had a relationship with Wayne on a personal level,” Farah said. “We started at Saks at a similar time.”In May, Meichner surprised the industry when he resigned as executive vice president of merchandising at Saks. At the time, he called it an “incredible run,” but believed that for his career development, the opportunities laid elsewhere.At Saks, Meichner had responsibility for men’s wear, women’s ready-to-wear, cosmetics, children’s wear and home. He was one of the store’s top two merchants, in charge of nearly $2.5 billion in business last year. His other posts at Saks during his tenure included senior vice president and general merchandise manager of men’s wear, children’s, gifts, cosmetics and fragrances.A well-respected industry figure, Meichner has a reputation for being innovative and responsive. Under his direction, Saks opened eight men’s-only stores, including units in San Francisco, Chicago and Chevy Chase, Md. Last year, Meichner spearheaded the expansion and renovation of the men’s department at the company’s flagship store on Fifth Avenue.Meichner, who begins Monday, said in an interview that he believes his Saks experience prepared him well for the Polo job. “During my tenure at Saks, I was involved in many aspects of the [Polo] business. I was responsible for men’s, so I had Polo; women’s and bridge, so I had the women’s lines; cosmetics, so I had Ralph’s fragrances, and children’s, so I had Ralph’s children’s line. I just didn’t have the Collection piece. I spent time in the planning division and spent time in the stores, so it helped me understand the full scope,” he said.While at Saks, Meichner merchandised 62 different store formats, ranging from the full-line stores, to the urban and resort locations. “I understand the resort markets, which have 7,000- to 15,000-square-foot stores, and the major urban stores, which are 75,000 to 100,000 square feet. The diversity of those stores and the understanding of the locations will be a help to me,” he said.Though Saks had been his home since he graduated college, he said: “In order to continue to grow, I needed a new challenge in my life. Vertical retailing is the future. Certainly, a brand as powerful as Ralph Lauren and its lifestyle approach coupled with my background was a great fit.”Meichner said he welcomes the opportunity to work with one brand, rather than the wide assortment of labels he was responsible for at Saks. “The ability to focus on a complete lifestyle is a dream. One of the challenges in multibrand stores is to have a unique point of view,” he said.Meichner will be responsible for building assortments at the Polo stores, driving store operations and their financial performance, and new growth strategies, said Farah.A top priority will be the development of a bridge-price retail chain.“One of the most important growth strategies is the Blue Label stores,” explained Farah. The game plan is to build 4,000- to 5,000-square-foot stores around the country, housing the Blue label. Blue Label made its debut at retail this fall at Polo stores in the U.S., as well as at 800 international accounts.“It’s had three weeks of very strong selling,” said Farah. He said that in the U.S.: “We made the decision to limit its distribution to only Polo stores so we could develop exclusivity and have full-price selling.” He said within the next 12 months, the company will introduce a prototype of a Blue Label store, which hasn’t been named yet. He expects to open Blue Label stores internationally.In addition to an eventual international rollout of Blue label stores in street locations in large towns and cities and in “appropriate malls,” Farah said there are still opportunities to open more full-blown Polo luxury stores both in the U.S. and abroad.Displaying a consistent image throughout all the Polo stores — in marketing, product presentations and window displays — is an equally important goal for the company, and one of the keys to reaching the next level of growth. “I’ve been in Russia, Asia and Europe, and the opportunity to consistently deliver that message is very important to us,” said Farah. “Whether it’s New York or Beverly Hills, Paris or London, our message needs to get across.” Farah said to create a “three-dimensional conclusion” on the selling floor, the design, lifestyle merchandising and presentations have to be in sync. He pointed out that not many fashion companies are able to translate their entire image around the globe, although some accessories firms do it. “It’s a very complicated task,” he said.In his most recent role as president of Polo Retail Corp., Fagan was responsible for merchandising, planning and store-line operations of the company’s domestic Polo stores. He has previously held posts in corporate merchandising and store operations, and was managing director of both the London New Bond Street store and the New York flagships. Fagan also worked as a designer of the men’s Polo Ralph Lauren collection for three years.“Charles made a tremendous contribution that not many people realize,” said Farah. “Up to six or seven years ago, most of the Polo stores were licensed or franchised. Charles has been a major player as we bought or reacquired all the stores in the U.S and developed the focus on owned retail stores with the company’s sensibility.” Presently, Polo owns all the domestic Polo stores, except for Kansas City and Sacramento, Calif. “Primarily, from day one when I came into the company, when Ralph Lauren opened the flagship on 72nd Street, [and he was a salesman] I’ve been focused on retail,” Fagan said. “It’s great to be here at a time when we’re so focused on a global approach. I have been with Ralph Lauren and I understand his sensibility.”Alfredo Paredes, executive vice president of Global Creative Services, Polo Store Development and Home Collection Design Studio, will partner with Fagan to develop a consistent creative strategy for the company’s stores that can be executed on a global basis.Jeffrey Edelman, equity analyst at UBS Warburg, wrote in a research update Friday regarding Meichner’s appointment: “We view this as a positive move, in that it’s a step towards strengthening Polo’s management team and, in particular, providing greater depth for its retail division, which represents about 40 percent of revenues. The latter is of great importance, as we have long maintained that the key to Polo’s ability to achieve higher profitability is through an improved retail performance.”Polo has said its goal is to improve the retail division’s operating margin to between 8 and 9 percent over the next several years, compared with just 2 percent last year. According to Edelman, retailing has been a marginal business for Polo, despite strong sales productivity at full-price Ralph Lauren stores and its outlets, which is reflective of a merchandise mix that is approximately 40 percent licensed product. The analyst estimated productivity of an average of $1,000 per square foot at full-price stores and “upwards of an estimated $650 per square foot” for outlet stores.The company has been restructuring its retail division for the last two years, buying back select franchised stores and improving inventory management systems. Polo’s retail strategy, announced in previous conference calls to Wall Street when the company reported its quarterly results, is a three-pronged approach. The top tier, the Ralph Lauren stores, will carry the firm’s Collection lines, as well as Black Label for women and Purple Label for men. With a controlled growth strategy, Edelman wrote, the top tier has an estimated 25-store potential in the U.S. Polo stores, the second prong, is a higher-growth concept with a potential of 200 stores globally. It carries, amongother products, the Blue Label line for men and the recently introduced Blue Label for women. The final prong of the retail concept is its outlet stores.“With retail representing 40 percent of total sales, we anticipate the potential profit improvement in Polo’s retail division to be a significant driver of our estimated 12 percent to 13 percent [earnings per share] growth for the company over the next several years,” according to Edelman. The analyst reiterated his firm’s “buy” rating on Polo.
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