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Ralph Lauren: Reinvention

Fashion is an industry of continual change, and it's never come faster or been more intense.

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Special Issue
WWD/DNR CEO Summit issue 11/14/2007

NEW YORK — Fashion is an industry of continual change, and it’s never come faster or been more intense. How to maintain, grow and relaunch a brand — from Polo to J. Crew, Halston to Tory Burch — as well as how to deal with new markets such as Dubai and India and the ever-important Internet, were the main topics discussed at the 11th annual WWD/DNR CEO Summit, themed “Reinvention” and held Oct. 29 to 30 at the St. Regis Hotel here.

Ralph Lauren talks about staying true to himself over the past 40 years, and what he sees ahead for his company.

“I don’t know if I’m a great designer or not a great designer or a great businessman or a great innovator, but I’m still here,” joked Ralph Lauren to a packed room at the St. Regis Hotel.

As a keynote speaker at the WWD/DNR CEO Summit, Lauren, who is celebrating his 40th year in business, spoke passionately — and mostly off the cuff — for nearly 75 minutes about his love of the business, how he has kept true to himself and his beliefs, and how he’s been able to maintain his vision in an ever-changing world as he created a $4.3 billion company.

Although the summit’s theme was “Reinvention,” Lauren took exception to that concept. “[My business] wasn’t reinvented. I didn’t reinvent it every week or every year. I built it one by one, step by step,” the designer said.

Dressed in a black pinstripe Purple Label suit, Lauren described many of the concepts the company created to expand the enterprise, such as Blue Label, Black Label, Purple Label, Home, Rugby, RRL, Chaps and a fleet of company-owned stores from Madison Avenue to Moscow.

As the head of a public company, Lauren stressed the necessity to find new ways to grow. He also emphasized the importance of being a student of one’s business, and understanding where young people go, where they are shopping today and who’s buying your merchandise.

“I love to come to work every day. I love it because I have a team of people in my company who are creative and exciting. There’s innovation, there’s excitement in the air. And by having fun and enjoying your business, you can also be very successful, and I think we have proved that,” said Lauren.

This was his third time speaking at the ceo summit. At a previous meeting, Lauren had criticized department stores, saying he was unhappy with the way the stores looked.

“I must tell you, just to start this thing off right, I think department stores since I last spoke have done an amazing job,” said the designer. And he turned specifically to Michael Gould, chief executive officer of Bloomingdale’s, and said, “Mike, you’ve done an amazing job.”

Holding onto one’s identity and keeping one’s vision in an ever-changing fashion world was a recurrent theme in his speech.

“Is it nerve-wracking to look at the cover of Women’s Wear Daily and see something that’s totally different than what you were thinking, that is a new look, a new message, a new classic, a new contemporary, and how do you not panic?” he asked. “How do you not panic when you’ve built a business with all kinds of people and you have a vision? What happens when you’re not selling? What happens when your stuff is selling, and all of a sudden, someone else is hot and you’re not hot? What happens to your business?”

He said he wrestles with these kinds of questions all the time. “How do you hold onto your vision? How do you keep your vision consistent? And how do you know when to move? How do you know when to change? Do you hold on and say, ‘This is me, I’m never going to change?’ Or, ‘This is me but there’s so much more, there’s a world out there we have to know about?’

“And there are young people out there, and what you think was young when you started is now old. And that happens very fast,” said the 68-year-old designer.

Lauren believes his company has been successful for several reasons. “We pay attention to numbers, we pay attention to design, but we believe in something. And it’s not always popular to believe in something. We reinvest in our company. We make plans for the future. It’s not only today, it’s tomorrow. And it’s one thing about this industry, and it’s one thing about Wall Street on some levels, it’s now, it’s today.”

He said Polo was built with a concept, a vision and a point of view. He said it’s filled with “quality people, taste but not too much taste, fashion but not too much fashion, style but not too much style.

“And that’s classy as far as I’m concerned. I don’t want to look like a fashion victim. I don’t want to be yesterday’s news. That’s my vision about myself, my life, my family and my company and that’s been our philosophy throughout this company,” said the designer.

Lauren attributed the company’s growth to his team of people. “I didn’t have a textbook. I didn’t go to fashion school. I didn’t have focus groups. I had a team of people that I developed, some of whom are in this room,” he said, pointing out his brother Jerry Lauren, as well as Roger Farah, Buffy Birrittella, Jackie Nemerov, Charles Fagan and Alfred Paredes.

He said Polo constantly strives to improve its products, innovate and create concepts. “We’re going from Polo into Blue Label, which is preppy; going into Black Label, which is more sophisticated; going into Purple Label, which is the ultimate in luxury handmade suits. The same thing in women’s. And we go from home to developing stores.”

In addition, he believes the company has to keep moving to keep up with its customers. People questioned why, after opening the Rhinelander Mansion flagship at 72nd Street, he needed a store on Bleecker Street. His reply? “Because the world is changing and the young people that were wearing your clothes are not the youngest people wearing your clothes. All the kids live downtown. They don’t live uptown. They don’t come into the mansion,” he said.

Consequently, the company developed a more diversified approach to its retail operation. “We build different stores, they’re not cookie-cutter stores, they’re not the same stores and they’re not all monsters, some are small, some are large. Some are catering to young, rugged-looking kids; some are catering to all different people.”

Citing several of the company’s innovations including Rugby, RRL and Chaps, he noted Chaps was created because he was tired of his designs being copied by other companies. The firm established a new division this year, Global Brand Concepts, via which Polo is developing exclusive non-Ralph product lines for select retailers, and handles the manufacturing, marketing and advertising. The first agreement is with J.C. Penney Co. Inc. for a lifestyle collection called American Living, that will comprise women’s, men’s and children’s wear, as well as accessories, intimate apparel and home goods.

“Good companies can be all over, but you can’t be everywhere. Global Brand does not have Ralph Lauren’s name on it, but it will have the design talent to make that store look good,” said Lauren.

He said that as a public company, people have invested in them, and they need to grow. “We’re growing by our innovation, our ways of attacking a situation, our ways of looking at the community.” He said it’s critical for his firm to understand shopping patterns of young people, especially since these days they’re shopping at small specialty stores. He said one has to listen to young people, and not just the chief financial officer or chief operating officer.

“So this is all about balance and this is about watching your business, being clear about the business and loving your business, and not being afraid of it. It’s about enjoying the business because when you enjoy it, I think you get better and better at it,” said Lauren.

To some observers, it might look like Lauren’s business went straight up over the 40-year period, but that’s far from the case.

“I had lots of pain, lots of anxieties, lots of issues. I was almost out of business one time after being in the business for five years…you rely on a certain team and you’re doing well in terms of your designs, but all of a sudden someone calls you up and says, ‘You know, Ralph, you didn’t pay your bill for your shirts.’ You know, it’s sort of a nightmare, but I lived through that nightmare.

“I started out, I was 6 feet, 6 inches,” he joked. “That nightmare really took me down. And while I was winning Coty Awards, I was worried about the finances. So I know very well what it means to have a company. I know what it means to be passionate about design, to be a leader, and I also know what it is not to pay bills and how badly that feels. So I never want that to happen,” said Lauren.

The designer said he ran into big trouble twice. “I thought it was over the first time but then you get into it again because you forget about the other side. You keep going, you keep going and then it happens again.”

Sometimes, he said, you get pigeon-holed into certain categories, which aren’t necessarily true.

“This company started with a concept. And it’s a very, very classic concept. You say, ‘Well what does Ralph Lauren do? Well it’s very classic. He’s preppy.’ Well how long do you stay preppy and what does preppy mean? What does fashion mean? Is Giorgio Armani fashion? Is Ralph Lauren preppy? What does that mean? Is that the WASP look? The words that I’ve heard my whole life…which are not at all true. When I started in this business, the industry was divided between a very classical Ivy League preppy look and the other part of the industry was a little more of what they call a European look. At that time there was no Giorgio Armani, there was no fashion international business,” Lauren said.

He said manufacturers like Hart Shaffner Marx hired Bill Blass and another designer to produce a men’s line, and they put their names on the company’s business. And Hardy Amies was coming from England, and there were many designers, but basically they were not in the men’s business, he said.

“I was designing ties, delivered them by myself, walked into the stores, and these guys, one by one, some of them faded because they did not live the business. They did not work at the business. They signed their name to the business and all of a sudden the business didn’t last as long as they thought it would,” he said.

Throughout his career, Lauren has never lost his competitive streak.

“So what I’m always looking for is what aren’t we doing, what haven’t we done yet. And as good as you think you are, there’s always something happening. So we want to be there first. We want to be there, if we’re not first, we want to be there better,” he said.

He praised one of his competitors, Brooks Brothers, “for doing a great job.”

“I think you’ve been fantastic,” said Lauren, acknowledging Claudio Del Vecchio, Brooks Bros.’ chairman and ceo, who was in the audience. “The company was going nowhere, but I think you did all the right things, and I’m very proud. And I’m also your competitor, and I’m not going to let you take any more room,” he joked.

Sounding like a Catskills comedian, Lauren cracked the audience up when he poked fun at the challenging life of a retailer, and the thoughts that go through their minds on a daily basis.

“The one thing about this business, the retail business is, and I remember this from all my days….You walk in one day and talk to the owner of the store and he’s having a hard day, the end of the day is over and he’s worried about tomorrow. There’s really no real happiness,” he said. “‘Last year, oh this year, yesterday was great but boy, tomorrow it’s terrible. We’re in big trouble. This is going to be bad. Oh, I don’t know, no one’s coming into the store. The temperature went down. It was 80 degrees yesterday and now it’s 40. I don’t know what I’m going to do with my outerwear because it’s May. It’s May and let’s get them in earlier next year because if we get them in earlier then we’ll be ready for the spring but it’s only fall but let’s get them in early anyway.”

Taking questions from the audience, Lauren said he’s surprised that not more U.S. companies are opening stores overseas. “We were one of the first to open up a store in Paris and to open in different places….I think the Americans are a little slow in terms of recognizing that there is a whole world out there, and that there’s a lot of space to do business.”

He said Polo plans to expand its business overseas and open more stores. He said he expects it will be complicated, but it’s worth it. “We’re out there. We’re on the move out there. But I don’t see many other Americans out there and I don’t know why,” said Lauren. “Retail is a very important part of the business. It helps the department stores, it helps the large stores, it gives them an image and it makes your brand important if it’s in those stores. So I believe they can all coexist, and I believe the globalization of our business is very, very important,” the designer said.

Lauren was asked how he has been able to consistently maintain his vision through his brand people and his product people.

“Basically, I’m there. I’m the conscience of the company,” he said. “I am working every day. I pick swatches. I don’t always look like I work because I’m wearing this beautiful suit today made by Purple Label, but I have built a company and teams of people in terms of design that are passionate about what they’re doing, and we have developed leaders, we have trained them over 40 years, and there are lots of people who have trained other people and grown.”

Lauren said he and president and chief operating officer Roger Farah discuss everything. “We are a very closely knit company. I work with Roger very, very well. We sit down, we talk about our business, we talk about what’s new, what’s doing well….I think the company has developed a philosophy and a taste level and a point of view of who we are. We’re very clear of who we are and who we’re not. And if there’s something to develop, we discuss it,” he said.

Lauren was also quick to point out that not everything is his idea.

“There are a lot of young people who have come to this company and brought lots of talent and lots of innovation and lots of questions. So we meet, whether it’s on advertising, whether it’s on designing Rugby, designing men’s wear, women’s wear, we are constantly communicating as to the brand, what it stands for and how it is,” he said.

He added: “There are no prima donnas. We are working every day on that philosophy. We coordinate our advertising, we coordinate our design. We know what we’re doing on every level….We know what we’re doing on Collection. We know what Black Label has to be, and we have a philosophy and that’s very, very important. And just because another designer comes out or another look comes out, we don’t panic and say, ‘Uh oh, we have to do that, we’re missing that.’ But yet, we’re aware of what’s out there.”

Being aware of what’s going on in the world is critical, he said. “Knowing what the market is saying, keeping your eyes open to what it’s saying and staying tuned into what’s going on, and if there’s a great innovation, you want to know how you can make that innovation work for you, but it’s got to be under your own voice,” said Lauren.

He feels strongly that a designer company needs to be “very loud and clear” in what it stands for. “You have to walk in the room and without the label on it, you could almost say, ‘That’s Ralph Lauren, or that’s this designer or that’s another designer.’ And I think if you create that, then you’ve really done a job. That’s been created over 40 years of vision and point of view and launching new brands and advertising those brands properly,” he said.

But sometimes Polo chooses not to advertise a brand at all.

“Sometimes we find it’s better not to advertise because you develop a cult. We never ran an ad on Rugby. We never ran an ad on RRL. And I love advertising and I believe in it. But sometimes it has to happen by itself. And that’s understanding your business. That’s understanding who you’re catering to and what the young market sees,” he said.

Turning to the Internet, Lauren said the firm’s Web site was experimental when it was launched 10 years ago, and has become a major success. “We learn, we develop, we’re building a whole vision of what we stand for and it’s been fantastically successful,” Lauren said. Other companies dropped out when it didn’t work out so well for them initially, but “we stayed in there because we believed in the concept.”

“We believed it could grow…we’re building it every day,” Lauren said. In fact, the Web site is the largest single place to buy Ralph Lauren in the world.

In response to a question on why he decided to develop a collection for Penney’s and how it will affect his core brand, Lauren defended the move. He said Polo has one of the largest luxury businesses in the world, but he’s aware there’s another world out there that he’s not tapping into. Having a creative design team, he’s been able to create concepts such as Rugby and RRL, which aim at different customer segments. He noted that Mike Ullman, ceo of Penney’s, was a member of Polo’s board, and he got to know him “as a very smart guy.” Lauren said he had a plan several years ago to do a brand called American Living. “And I wanted to do that because it was something I thought we should do as a company. But it was very difficult to get that out at a price,” Lauren said.

He noted Penney’s knew about it from conversations, and they decided it was something they wanted to do together. He said he wanted to develop it because he feels large stores need a voice and need a brand of their own. “It doesn’t mean that everything should be private label, but I think it’s very important to have an identity and have your identity,” Lauren said.

The company already does Chaps for Kohl’s Corp. and that doesn’t affect its core business, said Lauren. “Does that mean that we’re going out of the fashion business? Does that mean we’re in the mass business? No. It means that we’re very creative, it means that we’re smart. It means that we know how to build a luxury business, that we know how to do a quality business, and our quality business is stronger than ever and we’re opening better stores every minute,” Lauren said.

He emphasized that he sees room for Polo to expand. “And this is a public company that needs growth, but proper growth, not panic growth, growth on every level, innovation is the word,” Lauren said.

Further, he said, “Ralph Lauren is not a rip-off at high prices. It’s quality. It’s solid. It’s beautiful product, it’s great fabric…made beautifully, made in Paris, made in Italy, made all over the world. American Living is a different brand. It says certain things, and it feeds the needs of different stores.”

Another audience member asked Lauren whether he ever gets burned out, and how he turns off the business so he can get some perspective on what he’s doing.

“I love working. I have a nice family, I am not a workaholic. I have a life and I think that’s important for everybody,” Lauren said. “But I think it’s also very important to love what you’re doing. And to do it well, you’ve got to work. I mean there’s no substitute…I think it’s very important to have a great team. I could never exist if I didn’t have a great team. They are all in this room and 10,000 more. And that’s what makes the company exciting, that’s what gives me a rest, but also injects me with energy.”

Lauren was very complimentary about those he’s met in the fashion business. “This is a business about passion,” he said. “All the people I have met in my career, whether on the wholesale level, department store level, design level, they love what they’re doing. It’s a great industry. And as I go on in this industry, I’m so thrilled with it, and I’m so thrilled to be a part of it. It’s been very good to me.”

And even though he’s a huge fan of Hollywood, he finds the fashion industry more exciting.

“I always liked Hollywood. I always thought ‘Hollywood, wow, that’s the place, that’s exciting, that’s real.’ This industry has got more excitement, more talent, more people on every level and more legitimate people that you can do business with that have integrity. And that’s what I feel proud of. This is not the rag business. This is a class business, and it’s getting stronger and better every year,” said Lauren, to which the audience broke into applause.

However, it was Hollywood that first inspired him to create his lifestyle image.

“When I was growing up I used to go to a lot of movies,” Lauren said. “And when I came out of the movie, I wanted to be Robin Hood. I wanted to be Mickey Mantle. I wanted to be Joe DiMaggio. I wanted to be Zorro. You know, I’m giving you some real secrets. I loved the idea of being able to go and see a character and see the people living, that’s what inspires me.”

He said John Kennedy also influenced him. “I wanted to look like him because I liked him,” confessed Lauren. “There’s an image. Franklin Roosevelt….It’s not movie stars only. It’s all walks of public life, and when you’re a young kid and you’re growing up, you’re inspired. You’re inspired to look like them. You say, ‘I want to wear that.'”

Lauren told the group that he was also motivated by great teachers.

“I liked the teacher in my class that used to wear a tweed jacket with suede elbow patches and crepe sole shoes and a button-down shirt, and I wanted to be just like him because he was really cool. He smoked a pipe, and I wanted to be that guy. That was inspirational.”

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