Ralph Lauren Essay

Ralph Lauren Corp is one(a) of the surmount-known fashion mark and licensing companionship in the world. The patsy was launched in 1967 founded by American designer Ralph Lauren. earlier to starting Ralph Lauren, he worked for Brooks Br separates. In 1968 he started a eminence of mens ties. By 1969 he had a boutique descent within the Manhattan department store Bloomingdales. In 1971, Polo Ralph Lauren launched its first womens accruement and his first store in Beverly Hills, California.Ten years later, in 1981, the smear went world-wide with its first world(prenominal) store on Londons New Bond Street. The Polo Sport line was introduced in 1993. The ticks mission is they be always standing for providing quality crossways, creating worlds and inviting people to inject part in their dreams. They be the innovators of life style advertisements that tell a level and the first to create stores that encourage customers to participate in their lifestyle.And their vision is training to open to a greater extent than(prenominal) than stores and increase commercialiseplace component in the succeeding(prenominal) fiscal years, statusing to begin taking advantage of international markets appetite for luxury goods. Ralph Lauren designs, markets and distributes luxury products domestically and globally. The companys nock names include Polo by Ralph Lauren, Ralph Lauren, Purple Label, Ralph Lauren, Black Label, inexorable Label, Lauren by Ralph Lauren, Polo Jeans Co. , RRL, RLX, Rugby, RL Childrens wear, Chaps and Club Monaco.The company offers, along with its licensing partners, broad lifestyle product collections in four categories appargonl, which includes collections of mens, womens and childrens clothe home, which includes coordinated products for the home, such as bedding and bath products, furniture, fabric and wallpaper, paints, broadloom, tabletop and giftware accessories, which spread over products such as footwear, eyewear, jewelry an d leather goods, including handbags and luggage, and fragrance and skin care, of which products are sell under the Glamorous, Romance, Polo, Lauren, Safari and Polo Sport brands.The Company operates in collar integrated business segments wholesale, sell and licensing. The company sells the products through department stores, military capability stores, golf and professional shops, as well as its own stores and commissioned retail stores, concessions-based shop-within-shops, and e-commerce Websites. Distribution is accomplished at a domestic and international level with the three business segments. repayable to the business expansion and degenerate growing e-business, the companys wholesale cited unassailable demand in U.S and international market. As of the first quarter of 2013, Ralph Lauren had 329 retail stores well-nigh the world, and operated 240 wholesale of its own stores in the U. S, 100 retail outlets, 478 concession-base shop-within shops and 6 e-commerce websites. I n the end of 2012, the total revenue reached to $6. 8 billion. According to Yahoo Finance, from the 4th quarter of 2012 to the first quarter of 2013, the total revenue reached 992. 1. Thither are two main contenders towards Ralph Lauren.Tommy Hilfiger(THC), though its subsidiaries, designs, sources and market mens and womens sportswear, jeans wear and childrens wear under Tommy Hilfiger trademarks. THC offers the products in the global market and engaged in wholesale, retail and licensing, Tommy Hilfiger reported earnings results from the stern quarter 2012 and the first quarter of 2013, the revenue increased 9% to $891. 1 million from $815. 8 million in the prior years fourth quarter.So THC is the astronomicalgest competitor of Ralph Lauren. And another main competitor is Liz Claiborne Inc. LIZ), its designs and markets branded womens and mens apparel, accessories and fragrance products. This Company is operational wholesale, retail also and reaching consumers of various age, gender, size or lever preference. Due to stripping out unrealized foreign currency losings and other items, the companys total revenue has decrease. But it subdued reached $307. 4 million from the end of 2012 to the first quarter of 2013, which is the competitor for Ralph Lauren and share the market. Ralph Laurens strengths lie in its brand candor, infrastructure improvements, its history, and its monetary strength.Ralph Laurens brand name and the logo are both recognizable and exceedingly touched in the fashion world. Polo Ralph Laurens classic style has al mortifieded the company to draw out its product portfolio into markets. High customer loyalty allows for a queen-sizedr advance margin than most other companies in its industry. The powerful brand equity responsible for such a strong consumer following reduces the price sensitivity for retail sales, which was a strong factor in maintaining good performance. However, the weaknesses are in its dependence on department sto re sales and manufacturing. gross sales from department Sales from department stores make up for almost one third of Ralph Laurens revenues. Sales in department stores can be uncertain due to market share with competitors and the financial stability of these stores. Moreover, manufacturers has resulted in limitations with manufacturing for views of high demand. Due to the high standards of the Lauren fashions. Laurens designs sometimes create wise methods for quality with manufacturing, which hinder coming(prenominal) growth. Laurens opportunities for growth include brand extension, and international expansion.International expansion presents a wealth of opportunity for Ralph Lauren. Their hail to each theatrical role is specific to its business climate and structure, while the common goal is to broaden their reach through increase direct brand ownership and control with new specialty retail store openings. The strong, compromising infrastructure allows Lauren to capitalize on opportunities to grow businesses around the world. Lauren has a strong investment of $1. 1 billion comes from its s look atholders and long-term debt ratio just 7% at the end of first quarter of fiscal 2013.The company financial and strategic fundamentals looks like very strong. It shows that Ralph Lauren is highly reliable. Wholesale and retail are the two main business segments of Ralph Lauren, accounting for about 97% of its revenues. About 45% of the retailers revenue comes from the wholesale segment, and the retail segment constitutes about 52%. In fact, the wholesale business section to boilers suit revenues has been declining since 2008. It stood at 58% of total revenues in 2008 and 45% in 2012. On the other hand, the retail segment improved from 39% to 52% during the same period.So this trend will continue in the future with wholesales contribution coming down to as low as 30%. t Moreover, the department stores market share has been declining in the U. S. retail market an d the market per share has decline from $179. 90 to $168. 41 between the end of 2012 and the first quarter of 2013, which beting the percentage 6. 39% decrease. Due to the increase in the share of private label brands, such as the competitors expand their business by introducing the new lines for their products, Ralph Laurens specialty stores and other department store revenues will be impacted.Other factors such as the discontinuation of American Living brand and consolidation of mainland chinaware earnings will also weigh on the wholesale segments growth. The international revenue has decline from 10% to 8%, which dragging its overall revenues down by 2%, especially in countries in Europe. From 2012, Lauren witnessed a sharp decline in its revenues from Europe due to its over combine on the regions southern countries, which pack been significantly impacted by the debt crisis.Lauren is facing problems in Europe mainly due to the increasing cost of wholesale hipments and tax c ost. Lauren set a high retail price on its products but people dont deficiency to spend too much to buy it. Therefore, it result in the large-mouthed surplus of the product. On the other hand, Lauren found out the high commitment and tax cost are mainly due to the unfavorable sparing environment and its high concentration in the worst hit Europe. The retailer operates more than 600 stores in the region. As a result, it earns more than 60% of its revenues from this region and has high exposure to countries such as Spain, Italy and Greece, where economy remains weak.In addition to this, the retailer runs the risk of self-cannibalization due to its high concentration in these markets. Since the European business accounts for an important part of Laures revenues, the decreased from 10% to 8%, dragging its overall revenues down by 2%. The echoic issue which affects the Laurens brand image, especially happened in Asiatic market, such as China. The evidence shows that Ralph Lauren be ing more focus on Asian market. For instance, in China, in that respect are more than 16 retail stores and 23 factory stores opened in recent years.Therefore, the new problem work issue has shown up during Laurens expanding. It was reflected in people said that they have bought the echoic shirt in China. Even in the U. S, more and more counterfeit clothes which have the same label with the authentic ones entered into market. The savvy that cause this problem in China mainly due to the position of Ralph Lauren, Ralph Lauren have three cloak label (purple, black and blue) series represent the contrary level of craft, but the retailer in the Asian market mix them together to sell. On the other hand, the high class series mainly remain in the U.S, and just a clarified numerate exports to China.Therefore, the blue series which represent the low class are sold more. So people regard Ralph Lauren as cheap and common and debate it can just fit for the young people. They dont regar d Lauren as one of the luxury goods brands. This opinion affect the position of the brand. The counterfeit products occur because the blue series it is easier to replicate. The retailer doesnt classify the different Ralph Lauren labels credibly because he lacking of strict exigencys for the site selection of the retailers.With the large growing population of China, more and more U. S company capture China as their second large market and wants to earn more market share. Ralph Laurens retailer had to missed the opportunity in the big cities and choose the customers in smaller cities as the object aimlessly. And the economy situation is different between the big cities and medium-small cities it is easier to sell their products in big cities in order to progress the good brand image. Moreover, brand image ordinarily is cognized in big cities and then spread to other medium and small cities.Therefore, the need of the Ralph Lauren is affected by the development of the cities and as the result affects its performance. Overall, the brand image is affected by the counterfeit issue. For increasing the market share, there are a number of potential rootages. Introduce new design for the existing product line, such as design more color on product especially for the apparel in different season. populates need is always changing, different color on the product will give people more options. Besides, U. S retailers should get more focus on online sale.Online is important trade group, it can attract more people to buy if they publish its own online-holiday-sale. In addition, online sales were expect to continue to outpace the growth in in-store sales. To take an advantage of online sale, The potential solution for the counterfeit issue all over the world, especially for the China market is building a good brand image. The problem here for Ralph Lauren is, people dont know whats real and what isnt. To build a good brand image, Lauren should stick to its commitment to the market and take more or direct control of its China operations, product, and quality.For example, close non-profitable stores and abject away from selling products in department stores to focus on telescope up its own retail outlets. Due to the lacking of restrict requirement for the site selection and lacking of understanding of the brand for the retailers, Ralph Lauren now is probably a little behind the other luxury retailers in get in this market, so the they should consider the companys new stores in China must be in Beijing, Shanghai, Hong Kong, Guangzhou and surrounding regions.The other potential solution for the counterfeit issue is Lauren maybe can introduce the new remarkable product line for the international market. Such as the limit chance variable for the different product only for each foreign market or make more different label tags on the product so that it is not easy to replicate. However, this requires Ralph Lauren had better do a lot question on diffe rent culture in order to make the best product to meet peoples need.