NEW YORK — Polo Ralph Lauren Corp. is moving forward smoothly on its somewhat rushed plans to take over the Lauren by Ralph Lauren line from Jones Apparel Group at the end of the year, and at least one analyst expects more generous markdown concessions once the label is officially housed at Polo.
According to an updated research note by Credit Suisse First Boston analyst Dennis Rosenberg, “Polo plans to provide greater marketing and markdown support than was given by Jones.”
Rosenberg’s report followed a meeting with Roger Farah, Polo’s president and chief operating officer. Polo declined comment on Rosenberg’s note. As reported, he’d earlier enunciated a “no return” policy for Polo but noted in February that Polo was supporting its department store accounts with “as much markdown money as we can” in order to support stores battling a difficult retail climate.
As reported, Jones and Polo had been feuding about the timing of the expiration of the Lauren license, but the status of the line was rendered moot last month when Jones gave it up and sued Polo, seeking compensation for profits lost due to the surrender of the license. Polo is set to file its answer shortly, as well as it own set of counterclaims against its former and current licensing partner. Before doing so, it’s awaiting Jones’ response to its request that the suit be dismissed and the judge’s ruling after submission of the required paperwork.
Jones still holds the licensing rights to Polo Jeans, which were unaffected by the dispute.
While Jones busied itself with a replacement line under the Jones label, its move forced Polo to quickly ramp up the design and production of the Lauren line. Rosenberg noted that Polo appears to be meeting its first spring delivery target date to retailers, a move that, along with other planned improvements to the line for fall, would help ensure sales of between $400 million and $500 million for the year ending March 2005.
Rosenberg estimated a first-year operating profit margin in the midteens, which would result in the Lauren line adding 20 cents to Polo’s fiscal 2005 earnings per share. He wrote that “management’s margin goal is at least 20 percent in the second full year.” At that rate, the analyst estimated, Lauren’s EPS contribution would double to 40 cents, assuming $500 million in sales.Although considered “mature” at Jones, the Lauren label generated $548 million in sales during Jones’ last fiscal year. Jones is itself busy developing a Jones New York lifestyle brand to compensate for the loss of the Lauren label.
Rosenberg also wrote, “We came away with greater confidence that Polo will be successful in delivering a full spring line and in retaining most of Lauren’s current department store real estate.”
He added that Polo’s plans to grow the Lauren line included the adding a career collection, expanding activewear and other new classifications and entering international markets. Launching Lauren on a wholesale basis in large department stores in Europe and the Far East could begin as early as “calendar 2005.” Lauren is not scheduled for international distribution at the specialty store level to minimize the cannibalization of last year’s Blue Label launch.
“The designs taken back from Jones were modified and improved by designers from other Polo women’s brands, who were ‘on a mission’ to make sure that the Lauren product was right,” Rosenberg wrote of the spring assortment. “Samples for the September market are now being produced. Fabric procurement has been completed and production will be made the week of July 14.”
No major changes in the line were planned for spring, but the apparel firm is planning more fashion content and higher-quality fabrics in upcoming seasons, with neither benefit to the line resulting in an increase in retail prices.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews