Ralph Lauren’s net revenues have grown five per cent. The American fashion retail giant also saw a respectable growth in underlying comparable sales. Bottom line of the brand boosted its operating income by 12.9 per cent over last year. A lot of this is attributed to lower discount rates offered by the company mainly in wholesale channel.
A more focused and disciplined approach in producing new collections over the last few months has helped in not only enhancing its sales but also in building connectivity with consumers. The last few years have been about cutting costs. Ralph Lauren is on the right track. What it needs now is a focused business strategy.
Ralph Lauren has ambitious plans to increase sales by a billion dollars by 2023. Marketing spend will go up by a $100 million over the next five years. The goal is to woo the next generation of consumers and increase gross margins by improving the core product (which makes up 60 per cent of overall revenue), amplifying under-penetrated categories (including women’s, outerwear and denim) and operating with discipline, which constitutes being more careful about discounts and promotions, more strategic when it comes to price, and cutting costs in creative-but-impactful ways.
