Ralph Lauren’s Lifestyle Dream Meets Meta World – WWD
The dream lives on at Ralph Lauren Corp.
The company posted more than $217 million in third-quarter profits as it moved from reset mode to offense in a world redefined by the pandemic, technology and a new consumer.
But the multicategory lifestyle approach and attitude — which Lauren used to dominate department store retailing years ago — is still defining the brand at wholesale, in its own stores, at e-commerce, on Roblox and beyond.
“We’re not a clothing brand,” Patrice Louvet, president and chief executive officer, told WWD. “We’re closer to Disney than we are to other apparel companies because we’re in the dreams business.”
Louvet said that when he joined the company in 2017he spent time with Ralph Laurenexecutive chairman and chief creative officer, reflecting on exactly what kind of business they were leading.
“We concluded that we were in the dreams business, we’re in the business of creating these worlds that make people dream, that help them aspire to a better life,” Louvet said. “Ralph always says, ‘It’s not about the clothing, it’s not about the fashionit’s about living.’ So I guess we’re in the dreams business, we’re in the living business.”
Of course, the company is also still very much in the rag trade, making its millions by producing and selling fashion. But this business about dreams is a thread that connects the company with its past and can lead it into a future where young consumers are living even more of their lives online.
“What is the multiverse? It’s an alternative world,” Louvet said.
The brand took to Roblox this holiday, recreating its take on a winter escape on the platform, which has 47 million users, including many Gen Zers. The company has also dipped a digital toe into the online world of ZEPETO.
E-commerce — where the company was one of the pioneers in the late ’90s — has been kind to Lauren, which saw revenues in its digital ecosystem, including online wholesalers, increase more than 40 percent in the third quarter with the two-year increase topping 60 percent.
Lauren’s own e-commerce grew by more than 30 percent in the third quarter.
But the metaversere-ready and digitally obsessed Lauren is just one aspect of the business that is emerging from two years of turmoil (into what will hopefully soon become the post-pandemic landscape).
Louvet has led a years-long effort to raise prices and boost brand profile at the company, which is also continuing its work with celebrities and in sport, outfitting Team USA with the Olympic Opening Ceremony Parade Uniform.
And new retail is back on the agenda.
The company is opening four new full-price North American stores this quarter — in Miami, Chicago, Atlanta and Detroit. That’s more new full-price stores in Lauren’s home market than the firm has added in six years and the start of a new growth phase that will see about a dozen new stores in North America over the next couple years.
The trick, it seems, is to project the dream wide, building a “lifestyle positioning” that helps the brand drive its core offering and build more in other categories, including outerwear.
“We can have one of the hottest restaurants in the US, sell gear that is worn at the Olympic opening ceremony, dress celebrities in beautiful evening gowns and tuxedos at the Oscars and offer a full line of products to consumers like you and me,” Louvet said.
The dream can come back to the fore now that Lauren — like many of the stronger companies across fashion — has found its footing during the pandemic, which was used by a big rush to a fast-forward transformation that was ultimately finished before COVID-19 .
For the third quarter ended Dec. 25, Lauren’s earnings bounced back 82 percent to $217.7 million, or $2.93 a diluted share, from $119.8 million, or $1.61, a year ago, when the pandemic was hitting the consumer world hard. Adjusted earnings of $2.94 came in well ahead of the $2.17 analysts projected.
Revenues increased 26.7 percent to $1.8 billion from $1.4 billion.
Lauren boosted its annual revenues outlook to constant currency growth of 39 percent to 41 percent, up from the 34 percent to 36 percent growth projected in November.
Investors applauded the bullishness, pushing shares of the company up 4.9 percent to $119.26 in midday trading.
Zachary Warring, an equity analyst at CFRA Research, upgraded the firm’s stock to “buy” from “hold” and raised his target price by $15 to $150. The analyst cited the expected return of international travel, strong digital momentum and the company’s continued investment in digital and strategic initiatives.
On top of all the dream building, Louvet analysts told on a conference call that a new apparel cycle started last year and has been gaining momentum.
“It’s still very early innings with many tailwinds ahead because the consumer hasn’t really fully returned to work and certainly hasn’t fully returned to more regular external activities,” the CEO said. “So what we’re seeing on the hybrid approach by consumers is, on the one hand, a replenishment of their core wardrobe, and on the other hand, a gravitation toward newness and sophistication.”
That means shoppers are replenishing their denim and sweaters in the core, while pivoting toward elevated casual styles like cashmere and hoodies and day-time looks for venturing out of the house, like sport coats.
Such is life and style in 2022.
“What we do has always been about living — enjoying every moment from what you wear, to the way you live, to the way you love,” said Ralph Lauren. “And as we enter a new year, filled with hope of more connection and healing as humans and for our planet, I am inspired by how our teams and people around the world are connecting to what we are about — timelessness and an authentic life well -lived.”
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https://wwd.com/business-news/financial/ralph-lauren-meta-olympics-patrice-louvet-earnings-dreams-1235061720/ Ralph Lauren’s Lifestyle Dream Meets Meta World – WWD