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Ralph Lauren Corp. has decided to fold its Denim & Supply business into one of its core power brands, Polo Ralph Lauren.

This story first appeared in the September 23, 2016 issue of WWD. Subscribe Today.

Stefan Larsson, president and chief executive officer, said in an interview, “In our Way Forward Plan, one of the key pillars was to focus on the core, and evolve the brand and the business from that. One part of that is to focus on the three core brands — Ralph Lauren, Polo Ralph Lauren and Lauren by Ralph Lauren.

“When we looked at Denim & Supply — denim has always been a core part of the authentic American style that Ralph has created — we decided to grow the denim business [from] where we have the most growth, and that is within Polo.”

Transitioning Denim & Supply consumers to Polo won’t be an issue – Larsson said buyers of the brand were already purchasing the Ralph Lauren and Polo brands. He elaborated that when the company did its brand analysis, “We got the consumers’ view on how much love they have for the Ralph Lauren and Polo brands. They saw Polo as Polo Ralph Lauren. That’s the strength that we will build on.”

The company won’t need to update fiscal year guidance or incur additional restructuring charges, nor will there be additional layoffs.

“We stand firm on guidance,” Larsson said, adding that folding the Denim & Supply brand had been contemplated at the time the company provided its assessment of restructuring costs.

The company said in August when it posted first quarter results that restructuring activities are expected to result in annualized cost savings of between $180 million and $220 million, which is on top of the $125 million cost savings from fiscal 2016’s restructuring activities. Second-quarter net revenues were guided down mid-to-high single digits, with fiscal 2017 consolidated net revenues forecast to decrease at the low-double-digit rate. Initiatives under the Way Forward Plan are expected to have a greater impact in the second half of fiscal 2017 than the second quarter.

According to Larsson, the Double RL brand, or RRL, will not be affected by the change at Denim & Supply. “Double RL is the most authentic expression of Ralph Lauren. We will continue to strengthen Double RL and we will keep it small, exclusive and special. Double RL is important for us from [the standpoint of] delivering the ultimate denim experience,” the ceo said.

Currently the Double RL brand is available just in men’s, but Larsson said there is an opportunity to expand that to women’s. For now, the main driver of the denim business will be from the strength of the Polo brand.

There are no changes to the RLX Golf brand or to the Club Monaco business.

Larsson emphasized that the changes are all aligned to set the company up to build from its core strengths. Larsson said that, by putting denim back into the core Polo brand, that part of the business is now “closer to the consumer.”

 

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