polo men shoes Polo Now Races to Make Women’s Line
Polo Ralph Lauren is racing to meet a deadline and the retail world is watching.
In the middle of a nasty feud with Jones Apparel Group over the Lauren/Ralph Lauren women’s line, Jones unexpectedly threw the license back to Polo early this month. Now Polo needs to design, sell, manufacture and be ready to ship millions of dollars worth of spring clothes to department stores nationwide by January.
Some skeptics on Wall Street, along with a pack of hungry competitors, say the task is so big that Polo is bound to come up short. They predict the company will either wind up with poor fitting, badly made clothes, or experience delays in delivery a problem that has plagued the tiny, exclusive collection of couturier clothes that made Ralph Lauren one of the country’s best known fashion designers. Even if Polo can produce a high quality line on time, some argue that the stores uncertain about the chances may order only half of what they did a year earlier.
Roger N. Farah, Polo’s president, knows there is little room for error. He has heard the skepticism. ”It’s a big challenge to start and deliver product at this scale,” he said Monday in his first interview on the subject. ”But we’re absolutely on track. We’re ready to roll.”
The designs for the spring line are completed, he said. Factories in the Far East are preparing the samples and some of the ”piece goods” the floral cottons and crisp linens that Lauren is known for are already being woven.
If Mr. Farah slips, others are waiting to grab his floor space in stores like Bloomingdale’s and Nordstrom. Phillips Van Heusen, which purchased the Calvin Klein business in February, is trying to determine whether it can produce Klein’s new women’s line for spring. And Jones, bitter over the Polo fight, is beginning its own line to compete with Lauren at what it says will be prices 15 to 25 percent lower. All three are racing toward September, when they must show their new spring lines.
The department stores are likely to be cautious. Mike Gould, the chief executive at Bloomingdale’s, is one of those undecided and making no commitments about space. All he wants, he said last night, is newness. At Bloomingdale’s, the newest design companies are those that are doing the best: Theory, Juicy Couture, BCBG and Marc by Marc Jacobs. The Lauren/Ralph Lauren line ”hit a pleateau about a year ago,” Mr. Gould said.
The coming competition for the women’s traditional better sportswear between Ralph Lauren, Calvin Klein and Jones Apparel is a good thing, Mr. Gould said. ”The hipness of the product will speak for itself.”
The whole of Polo’s business including men’s and women’s clothes, sheets and all types of licenses brought in $2.4 billion last year. The company has a variety of lines for women’s clothes, including the runway collection (blazers average $1,200) to the Blue and Black labels (blazers average $400 to $900) down to the Lauren/Ralph Lauren department store line ( blazers average $250 to $295).
In preliminary conversations with retailers, Mr. Farah said he had heard no hints that they might cut their orders for Lauren/Ralph Lauren. ”For many of them, Ralph Lauren is the largest brand in their stores, ” he said, ”and they see no point in splitting the business.”
In the current atmosphere, in which Wall Street is clamoring for growth in a dismal clothing market, Polo is clearly not following the trend toward consolidation.
Chief executives at many of fashion’s big names Tommy Hilfiger and Liz Claiborne, for example have vowed to grow by acquiring hot young companies with plenty of room to grow. Yet Mr. Farah believes in figuring out how to achieve growth within his one giant brand name: Ralph Lauren.
”We’re not developing a roster, a portfolio, of labels,” he said on Monday. (Liz Claiborne, for example,
purchased the makers of Juicy Couture this year.)
”Peter Boneparth has said publicly that the Lauren brand is mature, and that it isn’t part of Jones’s growth strategy,” Mr. Farah said, referring to the chief executive of Jones. ”We think there’s plenty of growth. There’s opportunity to improve the quality, and to take the brand internationally.” He said that Jones only had the Lauren license for the United States and Canada.
In the past, executives at Ralph Lauren griped about the quality of the Lauren line as made by Jones. They also complained that Jones Apparel did not give its line enough attention. The Lauren license was one of many held by Jones Apparel, which makes clothes under its own label, Jones New York.
”This is the only brand name we have,” Mr. Farah said, ”and we will give it the attention we think it deserves.”
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As an example of what he expects to change, Mr. Farah discussed fabrics. ”What was a cashmere blend may become a cashmere,” he said. Pressed for details, he said some of these specific changes might have to wait.
When Polo regained its license from Jones, the news prompted investors to sell its shares. The Lauren stock fell $1.08 on June 3 the day of the announcement to close at $26. Yet the stock climbed 82 cents the next day, and now stands at $25.30, up 15 percent this year. Nonetheless, Standard Poor’s lowered its outlook for Polo to negative because of doubts the company could manufacture the line in time. Since then, reporters and analysts have puckishly quoted the same maxim: ”Be careful what you wish for you might get it.”
Most industry onlookers give Mr. Farah excellent marks for management. Lawrence Leeds, managing director of Buckingham Research, said, ”Roger Farah is an exquisite manager and it’s not like they’re inventing the atom bomb over there.”
On Monday, Mr. Farah named two executives to shepherd the Lauren line into the stores. Kim Roy, a former president of Ann Taylor Stores, was named division president for Lauren. Benny Lin, the new senior vice president for merchandising and manufacturing, had been a creative director at Jones and also had marketed Lauren.
For those following the race, one of the biggest question marks is Mr. Lauren himself. He is known as a perfectionist, someone who has been known to pull a product and completely redesign it at the last moment.
One competitor who is familiar with the production of clothing lines said, ”If Ralph is happy enough with the styling and fabrics, they can make the deadline.” But, he added, ”If Ralph decides he wants to change everything, it certainly won’t be seamless.”
Most experts say it has to be to succeed.
Allan Ellinger, senior managing director with MMG, a restructuring firm that specializes in retailing, said that Polo would probably try to find existing yardage in mills to make the samples. Then, he said: ”It’s not just a question of fabric availability. It must meet Ralph Lauren’s exacting standards. Ralph’s very, very particular. To produce the full line, they would need hundreds of thousands of yards.
”It’s not like they’re taking back a license,” he said. ”They’re taking back a major business.”
For Polo, getting back the Lauren business is a great opportunity. Yesterday, industry executives familiar with the Lauren business said that the line was one of the most profitable in the whole garment industry.
”Normally, it’s a low profit business,” one executive said. But the Lauren line ”makes about 20 percent profit.”