It's been a milestone year for Ralph Lauren, who has been celebrating 40 years of WASP-inspired fashion, which he has successfully taken all over the world. This should be no surprise, as it's not like Lauren has been quiet about it.
Along with a gala event held during fashion week in Central Park in New York, he has had wall-to-wall coverage of his anniversary in almost every fashion magazine on the planet from the ultra-mainstream to the uber-edgy. I must have seen at least 10 multi-page spreads, celebrating Lauren and his contribution to fashion.
To his credit, Ralph Lauren has had something genuinely impressive to celebrate. How many other American designers (or any designer, for that matter) can boast of a multi-billion dollar empire built from scratch without the help of a major luxury group? The only other one that comes to mind is Armani.
In any case, it must have been extremely disappointing then for the company to release a surprise profit warning, stating:
Given the current macroeconomic challenges in the U.S., the Company thought is was prudent to recalibrate expectations for the back half of this fiscal year with a more cautious view on sales and margins for its domestic operations.
This is the second warning in as many days from a U.S.-focused business with a strong presence in the accessible luxury market. At the end of October, Coach warned analysts and investors that it was seeing slowing traffic in its retail stores in the USA.
This does not bode well for other mass luxury retailers who don't have the same levels of insulation from economic cycles as the high-end European luxury players like LVMH and PPR who for their part have been reporting stellar results.
The Polo Ralph Lauren business is comprised of numerous distinct brands, including Ralph Lauren Purple Label, Club Monaco (a Canadian fashion retailer it acquired several years ago), and Rugby, a start-up business that the Wall Street Journal said today has been benefiting from an increased fashion interest in the sport of rugby, including a featured display of the Lauren's Rugby brand at so-hip-it-hurts Colette in Paris. The real source of worry for the company's management is the bridge-priced Polo business, which experienced a serious slowdown in traffic in September, due to its large exposure to consumers who have been directly impacted by economic woes in the USA.
Photoclip courtesy of Vanity Fair