FARAH JOINS POLO RALPH LAUREN
Byline: Miles Socha / David Moin
NEW YORK — Ralph Lauren has roped in the retail heavyweight he’s had his eye on for years: Roger Farah has joined Polo Ralph Lauren Corp. as president and chief operating officer.
The announcement Wednesday confirmed an exclusive WWD report on March 21 that Farah would resign the post of chairman of Venator Group to join Polo.
Lauren also announced that Lance Isham, who had been president and chief operating officer, would become vice chairman. Farah, 47, and Isham, 55, were also appointed to Polo’s board.
“This is about a team,” Lauren told WWD in an interview with his two key deputies.
In addition to outlining the new executive lineup, Lauren responded to speculation dogging the company lately that Polo was a mature brand. He emphasized the growth potential through several channels, including store growth at home and abroad, and the Internet.
Last year, the company purchased the Club Monaco chain, which is being aggressively rolled out. Asked if another specialty acquisition was a possibility, he replied, “If there are other opportunities that look right, we will look at them,” adding, “There is not a master plan for that.”
Hiring Farah, he said, reflected the need to strengthen the management team to execute global growth strategies.
It’s not the first time Lauren has wooed Farah. “A few years ago, Roger and I spoke. We just had some conversations,” Lauren said. “This time, I actively recruited Roger. I always had great respect for Roger. Roger is probably one of the most respected young bright talents in the industry.
“I feel the company is right for Roger and Roger is right for us.”
Explaining the new management structure, Lauren said Isham would focus on developing the apparel, accessories and home businesses, working with him to develop marketing and advertising strategies for each.
Farah will concentrate on the growth of Polo’s retail network and Club Monaco, the Toronto chain Polo acquired for $81.5 million in March 1999, as well as corporate finance and administration.
Lauren noted that Doug Williams, group president of global business development, would now oversee licensing, the European business and Ralph Lauren Media, Polo’s new joint venture with NBC and two of its affiliates that are launching Polo.com in the fourth quarter and pursuing other media projects.
Under the new structure, Farah and Williams report to Isham and Lauren, and Isham reports to Lauren.
“We will be working together on everything,” Lauren stressed. “It is this group that will be sitting down weekly, working together.”
Lauren played down suggestions that the addition of Farah could trigger a horse race over who might succeed Lauren as chief executive officer one day. Asked if Farah’s appointment was part of a succession plan, Lauren replied, “I don’t see myself leaving the company unless they carry me out.”
Nor does he see himself winding down his involvement as chairman and ceo to focus on design. “I have a lot of fun being ceo,” he said. “I like being part of the business world. I feel that I make a contribution. I’m not about to go out and play golf. I love working this company and making a contribution beyond designing clothes.”
In the past year, Polo has taken several growth initiatives, requiring additional management, Isham said. Besides the Club Monaco acquisition and the NBC joint venture, Polo acquired Poloco SAS, based in Paris, and certain affiliates that hold European licenses to sell a variety of Polo apparel and accessories lines.
“This is strengthening the management of the company for the tremendous amount of growth we can achieve through the development of Polo retail concepts and Club Monaco,” Isham said. “It takes a tremendous amount of deployment of resources.”
Asked if he planned to step up the rollout plan for Club Monaco, Farah described the existing plan as “very aggressive” already. It calls for 15 to 20 locations to open in North America in the next year, including another Manhattan unit on Fifth Avenue and stores in San Francisco, Boston, Miami, Montreal and Toronto.
He also disclosed plans to open Club Monaco’s first European location, a women’s-only unit on London’s Sloane Street this fall.
Lauren’s management team has changed dramatically in the past six months. Last November, Isham succeeded Michael Newman as chief operating officer. Isham had taken over responsibility for retail, wholesale and licensing about a year earlier, as Newman devoted his time to restructuring the corporation from a private fashion house into a public company.
In a wide-ranging conversation, Lauren went out of his way to address some of the assumptions floating around about his business, including the perception that Polo bought Club Monaco to sate Wall Street’s appetite for growth. Instead, he characterized the growth of Polo as built on the concept of longevity, not rash decisions.
“I believe in strengthening and building,” he said. “It takes people, it takes talent, it takes time, it takes passion. I don’t think Roger would have come here or Lance would have stayed if the company wasn’t growing anymore.”
When he took the company public in 1997, “my goal was to build this company,” he said. “This was my baby. I wanted to know how far could I take it. What could I achieve. That’s the real reason I took it public. I didn’t own my women’s business at the time or [Poloco]. I had a lot to do.”
Lauren said he makes moves very deliberately and said the NBC deal took years to cement. “This is thought, research, planning. When we do it, I think it’s right. I think we’ve planted all the right seeds.”
Returning to Club Monaco, he said the purchase, which surprised many, was “not a panicked move.” Rather, he said it reflected that “being in this business, I recognize talent, in a person or a store. This helps us in our ability to see growth.”
“Sure, I’d love [the stock] to keep going up and up. I can’t control that. But I can control the quality of this company.”
Shares of Polo Ralph Lauren closed at 16 11/16, down 3/16, Wednesday on the New York Stock Exchange.
Lauren said he couldn’t explain why Wall Street had beaten down his stock. But, referring to the market’s recent affection for tech stocks, he did say, “I think Wall Street is more trendy than the fashion business. We’re focused. We stand for who we are. We don’t follow the trends. We lead.
“I don’t know where we’re going to end up, but I’ll tell you one thing, it’ll be a solid company.”
Farah, whose roots are in luxury retailing, spent the early part of his career with Saks Fifth Avenue. He said he was attracted to Polo because he appreciates the upscale nature of the business. “It’s not about price and promotion,” he said. “It’s about a lifestyle to aspire to, whether in clothing, accessories or home furnishings. Ralph has the premier lifestyle business in the world.
“I’ve been a retail customer and a personal customer and a fan. To be a part of the team that he’s putting together to take this business to the next level is nirvana.”
He said his challenge at Venator was reviving a company “on life support,” whereas Polo was “a very different challenge.”
“What attracted me was Ralph’s passion for the business and his almost endless stream of ideas,” Farah said. “What Lance and I have to do is find ideas we can turn into reality and into big businesses.”
Also on Wednesday, Venator announced that Dale Hilpert, chief executive officer, was given the added title of chairman, succeeding Farah. Matthew Serra was named president and chief operating officer, succeeding Hilpert as president.
Although Lauren has every confidence in Farah, his last performance, as chief executive officer of Venator, got mixed reviews. For 4 1/2 years, Farah presided over a complex and painful restructuring of Venator Group Inc., including shutting the historic Woolworth chain, closing or selling 35 divisions and axing thousands of workers.
During a stock price decline, he stepped down as ceo last August, but continued as chairman and was credited with rebuilding Venator’s core footwear and sportswear businesses and creating a new management team to head the remaining divisions, including Foot Locker and Champs.
Farah’s reputation was established at Federated Department Stores, where he ran the Rich’s division and later Federated Merchandising, and was being groomed as a candidate to succeed then chairman and chief executive Allen Questrom. But Farah got impatient, and angered Federated management when he left the company to become president of Macy’s. Three months later, Farah made headlines again when he was forced out of his job when Federated took over Macy’s in 1994.