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Ralph Lauren's targets trebling China revenue in five years

Since the last two years, the US fashion group Ralph Lauren has been transforming its business model to respond more effectively to industry dynamics and challenges faced. Patrice Louvet, the group's new General Manager, said he is ploughing on in his predecessor's tracks. Louvet is working closely with Ralph Lauren and has revealed the three major fronts the fashion group is engaged in. He felt a need to improve sales performance and the distribution network's quality. He is also looking at putting in new energy into products and marketing to attract the new generation of consumers and also looking at expanding the brand’s digital footprint and its international presence.

The brand sees China as a key area of focus. The size of Ralph Lauren's business in Asia is relatively small. In the last quarter, closed at the end of September, the group's sales in Asia grew 4 per cent at constant exchange rates, however, at current rate revenue in the region remained stable at under $217 million. On the positive side, margins in the region are growing. After being in the red in Asia for a long time, in the last quarter the group generated an operating income of $26.5 million (as against $203 million in North America).

In 2017 fiscal year, they expect to generate a revenue of $50 million in mainland China, equivalent to less than 1 per cent of our global revenue. This is significantly higher than majority of competitors, who have a greater penetration in the region. As per data by market research firm Millward Brown, Polo's brand awareness in China is as high as 83 per cent.

 
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