Blog: Leonie BarriePolo Ralph Lauren on a roll

Leonie Barrie | 30 May 2007

The cost of a series of acquisitions this year was the only cloud on the horizon for Polo Ralph Lauren which today reported its results for the fourth quarter and fiscal 2007. While other US retailers have suffered in recent years, the company has managed to come in ahead of expectations through its focus on luxury consumers, an ongoing strategy to elevate its products, being more selective about sales and distribution, and reining back control of the brand.

For the fourth quarter, profits rose 17.1% to $73.2m helped by strong wholesale sales after earlier acquisitions started to reap rewards. Last year the company bought back the Polo Jeans business in the US from Jones Apparel Group for US$355m, and in July 2005 it bought its global footwear licensee, Ralph Lauren Footwear Co, from Reebok International Ltd for $110m.

This year too the acquisitions have rolled in thick and fast, including the remaining 50% stakes in Polo.com and New Polo Japan, the company's master licensee in Japan; the acquisition of the Polo Ralph Lauren Leathergoods business; and Impact 21, its Japanese sub licensee for men's and women's apparel, accessories and jeans. However, Polo Ralph Lauren admitted the price for its buying spree has been $360m or 27 cents a share – and lowered fiscal 2008 guidance accordingly.
 
Roger Farah, president and chief operating officer, says Polo Ralph Lauren’s fast-growing presence in Europe is likely to form the template for exciting expansion in Japan. “Europe represents nearly $900m in sales and is our fastest-growing region,” he told analysts today. “Japan represents the second largest area of sales outside the US…and we see it as an important stepping stone to growing our business throughout Asia and the Pacific Rim.”

The company also says it intends to invest a further $240m over the forthcoming year to support growth initiatives, including a new Ralph Lauren Media distribution facility in North Carolina and an extra 24 retail stores. Global Brand Concepts and its first initiative, American Living, a new lifestyle brand for men, women, and children is also due to be rolled out at the beginning of 2008.

Polo Ralph Lauren Q4 profit soars 17%


BLOG

Trump spares textile machinery in tariff spat

Hundreds of US imports from China will be hit with an additional 25% tariff from next month – but to the relief of the US textile, apparel and footwear industry, most of the equipment used in the dome...

BLOG

Esquel's eco-friendly manufacturing complex

Hong Kong-based Esquel Group, the world's largest woven shirt maker, has been bedding-in operations at a ground-breaking new $313.3m eco-friendly manufacturing complex in southern China....

BLOG

Tariffs back at top of Trump's trade agenda

Tariffs soared back to the top of Trump's trade agenda last week, with the imposition of punitive tariffs on imports of steel and aluminium, and plans to proceed with an additional 25% tariff on impor...

BLOG

Digitalisation goalposts constantly evolving

The debate and discussion around digitalisation continues to top the apparel industry’s agenda – but as Spencer Fung, group CEO of Li & Fung explains, the goalposts are constantly evolving....

just-style homepage



Forgot your password?