Ralph Lauren Corp. was in celebration mode on Wall Street today, marking 25 years since the company listed on the New York Stock Exchange.
In addition to ringing the bell of the NYSE, the luxury brand hosted investors for an in-depth look at its current growth strategy — dubbed the “Next Great Chapter: Accelerate” — which calls for a continuation of its streamlined retail strategy and a doubling down on its direct channels. In total the company said it aims to add over 250 new stores over the next three years.
President and CEO Patrice Louvet noted that since Ralph Lauren’s last investor day in 2018, the company has undergone a steady transformation to reestablish its standing as a strong luxury fashion player. “Our ‘Next Great Chapter: Accelerate’ plan is grounded in this meaningful progress, building on our elevated brand positioning and desirability; our distinctive, timeless products and experiences across multiple categories; and our expanding reach in key cities around the world,” he said.
In regards to the last bullet point, Ralph Lauren is growing its retail ecosystem in 30 top cities around the globe. According to Bob Ranftl, CEO of North America, that includes 14 cities in North America, eight in Europe and eight in Asia-Pacific. “These cities were selected because they’re a center of gravity for our consumers, for fashion and style, from a population standpoint, GDP and attractive household incomes,” he said.
Ranftl noted that Ralph Lauren’s market expansion is already underway in several global cities including Beijing, Shanghai, Milan and Munich, which has resulted in “outsized growth” across each touchpoint. In North America, it is rolling out in Los Angeles, Chicago, Miami, Atlanta and elsewhere.
Among the projected 250 new stores set to open over the next three years, 200 stores will be in Asia-Pacific, 40 to 50 will be in Europe and 15 to 20 will be in North America. Those locations could represent a range of retail types from within the Ralph Lauren ecosystem, from flagships to small-format full-price stores to shop-in-shops and concessions.
“When it comes to new store openings, we are hyper-focused on the right locations, right environments, right economics,” said Ranftl. “This is an intentional and targeted approach as we move towards our goal of sustainable growth.”
Overall, the clear emphasis for the brand leaders remains its owned channels. Ranftl said that direct-to-consumer represents 63% of company revenue, a 600 basis point improvement since the company’s last investor day.
He added that in North America, the brand has worked hard to clean up its distribution to match its elevated aesthetic and identity by reducing its wholesale door presence by almost two-thirds and exiting the lower-tier department stores entirely. It also cut the off-price channel in half.
“Ralph Lauren has built a strong foundation and we have a clear game plan and we are poised to accelerate growth and value creation,” Ranftl said. “What I’m most excited about in North America is we’re just in the beginning of this progress.”