Polo Ralph Lauren is an American apparel company founded in 1967 and is currently based in New York. It was founded by designer Ralph Lauren, who still serves as CEO, Chairman, and chief designer for the company. The company does business by engaging in the design, marketing, and distribution of premium lifestyle products. The company sells apparel products for men, women, and children, accessories such as footwear, eyewear, watches, jewelry, hats, belts, and leather goods including handbags and luggage, fragrances, and home furnishings which include bedding, bath products, furniture, fabric, wallpaper, paint, tabletop, and giftware. The company owns a well-established portfolio of brands that are globally recognized and target customers of nearly all ages and demographics. Its most recognized brands include Polo by Ralph Lauren, Ralph Lauren Purple Label, Ralph Lauren Women’s collection, Black Label, Blue Label, Lauren by Ralph Lauren, RRL, RLX, Rugby, American Living, Chaps, and Club Monaco. They also sell their fragrance products under Romance, Polo, Lauren, Safari, Ralph, and Black Label brands. Just like any other apparel companies, these brands are Polo Ralph Lauren’s biggest assets and give the company their competitive advantage. Polo Ralph Lauren has a successful global distribution network which allows its merchandises to be sold in a total of nearly 9,000 retailers worldwide, ranging from high-end department stores such as Neiman Marcus to discount retailers such as TJ Maxx. Polo Ralph Lauren divides its company into three segments based on the way that its products are sold. The three segments are wholesale, retail and licensing.2 Wholesale
Polo Ralph Lauren’s wholesale segment sells its products to wholesalers such as department stores, specialty stores, and golf and pro shops, both domestically and internationally. During fiscal year 2010 (April 2009-March 2010), the company’s Ralph Lauren-branded products were sold through approximately 9,000 doors worldwide. In North America, department stores are the wholesale segment’s only customer while in Europe and Japan the company’s wholesale customers include more specialty shops and shop-within-shops at department stores. The wholesale segment is the biggest part of the company and this puts the company on high dependency on the performance of the department stores. During fiscal year 2010, this segment contributed approximately 50% of total revenue and Macy’s alone contributed 10% of total revenue (18% of wholesale segment). Retail
The retail segment represents sale of Polo Ralph Lauren’s products directly by the company. This includes company-owned retail stores and e-commerce websites. By the end of fiscal 2010, the company’s retail segment operated 179 full-priced retail stores, 171 factory stores which sell discount products, 281 concession-based shop-within-shops and 2 online shopping websites, RalphLauren.com and Rugby.com.2 The retail segment only sells products under three brand names: Ralph Lauren, Club Monaco, and Rugby. All three brands sell apparel and accessories for both men and women and their products are priced towards the high end. The retail stores are an important part of the company because they showcase the company’s most premium products and maintain the “premium” brand image for all of the company’s products. During fiscal 2010, this segment contributed 47% to total revenue. Licensing
The licensing segment is the smallest segment of all three, representing only 3% of the company’s total revenue during fiscal 2010.4 This is the part of the company that makes money by granting manufactures the permission to use Polo Ralph Lauren’s various trademarks. The company also grants its international licensing partners the right to distribute certain products and operate retail stores in specific regions. The company’s biggest licensing partners are Luxottica Group, S.p.A (representing 12% of all licensing revenue), The Warnaco...