Last winter came the surprising news that Stefan Larsson was stepping down as chief executive officer of Ralph Lauren Corp. in the midst of implementing his “Way Forward” plan. Larsson admitted he was leaving because of disagreements, ostensibly with Lauren, over the creative and consumer-facing parts of the business, including product, marketing and store experience. The company and Larsson said it was a mutual decision following extensive discussions to find common ground.
Lauren tapped another outsider, Patrice Louvet, group president, global beauty at Procter & Gamble Co., as president and ceo in May. He also joined the board. Louvet, who assumed his role in July, vowed to partner with Lauren to turn around the struggling brand. He stepped into the role at a time where the industry is seeing a decline in store traffic, excessive discounting and declining brand value for some key legacy brands.
“As I engage with the team, we’ll be looking at what’s the next phase, where are operational efficiencies and what are the vectors of growth,” said Louvet, when it was revealed he had taken the role. Digital is also a huge focus for Louvet. “The vision is ultimately that our web site is going to be our flagship. That’s the way to think of it.…It’s critical that the Ralph Lauren business be well-positioned. I think we would both say it’s a big opportunity today and we’re underleveraged in that space,” he said.
In a blog post he wrote when he took the job, Louvet said the company is looking at ways to “elevate the product offerings,” as well as increase quality to sales, distribution and discounting approaches. He also said he hopes to tailor the company’s strategy to better serve its global customers in a local way.
Market observers said Louvet’s main priorities are global expansion, particularly the Asia-Pacific region, digital growth, less discounting of the brand, upgrading the product, lowering inventory, speeding up turnaround times, restoring the company’s cachet in the market and renewing long-term growth.
During an earnings call this month when first-quarter earnings were revealed, the company said it plans to continue shrinking its wholesale presence and is set to exit between 20 and 25 percent of “underperforming” U.S. department stores by the end of the fiscal year.
Further, Lauren said it had cut back the number of stockkeeping units by 20 percent for fall, manufactured a more focused, higher-margin assortment and had shortened lead times to get 35 percent of its business on a six-month cycle and 90 percent on a nine-month cycle by the end of fiscal 2018 to reduce markdowns and drive improved buying.
“While we are addressing challenges in our business, we have significant opportunity ahead and we’re moving forward with urgency,” said Louvet. “Ralph and I are focused on actively evolving the brand expression and consumer experience so we can ultimately renew growth and get back to leading. We are continuing to build a strong foundation for future growth, as evidenced by our progress this quarter on the key elements.”