RALPH LAUREN IS handing off his title as CEO of the fashion and home decor empire that he founded nearly 50 years ago.
The New York-based company has announced that Stefan Larsson, the global president of Gap’s thriving low-price Old Navy chain, will take on the role.
The change will be effective from November, and Larsson will report to Lauren who will continue to drive the company’s vision and strategy as executive chairman and chief creative officer.
Larsson has remade Old Navy into a bright spot in Gap’s portfolio over the past three years. Prior to this, Larsson was part of an executive team at Swedish high street fashion chain H&M for 15 years. There he increased annual revenue to $17 billion (€15 billion) from $3 billion (€2.6 billion). During that time, H&M’s operations grew to 44 countries from 12.
In an interview with Lauren in his luxurious Manhattan office, the iconic 75-year-old designer emphasised that he’s not slowing down but sees Larsson (41) as a partner.
I am here, and I am not leaving. Stefan is coming to the company because I really believe he’s going to be an interesting addition.
He understands what dreams are. In this business, it’s about dreams because you are dreaming ahead and you’re about progress and change and newness.
Lauren, who started the company 48 years ago selling ties, has built a vast empire that includes women’s, men’s and children’s clothing, home decor, accessories and now restaurants.
But after years of surging growth, Ralph Lauren has seen its revenue slow down. In the latest fiscal year ending in March, Ralph Lauren Corp generated sales of $7.5 billion (€6.6 billion), but that represented just a 2.3% increase from the previous year. Net income slipped nearly 10% in the same period.
Ralph Lauren recently restructured its global brand management that it says will reap savings, but overall shares have fallen 44% so far this year.
Three new companies
To pump up sales, Ralph Lauren has added three new brands over the past two years: Polo for Women, Polo Sport, and Denim and Supply. The company has also been beefing up its online presence.
During the interview, Lauren and Larsson said they are looking for more growth opportunities in China and Europe as well as pushing for more growth in the e-commerce business.
Lauren said that consumers are even more interested in high-quality clothing as people have a lot of clothes.
Luxury is an exciting area. Consumers want specialness. They want quality. There’s a lot of mediocracy out there. And that’s not selling. What’s selling is specialness, quality and uniqueness. One of a kind…. and that’s what I stand for.
As of late June, Ralph Lauren operated 467 company-owned stores, including Club Monaco and Polo Factory stores. The company also operated 558 concession shops worldwide. In addition, international licencing partners operate more than 200 other locations.
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