Ralph Lauren,
the quintessential American designer who built a fashion empire based
on sweeping fantasies of country-club prep and the Wild West, is
stepping down from his post as chief executive of the company.
Taking
the helm at Ralph Lauren will be Stefan Larsson, a former H&M
executive and president of Old Navy, Gap’s down-market brand, which Mr.
Larsson is credited with reviving. Old Navy has consistently been one of
the few bright spots in Gap’s brand portfolio since Mr. Larsson, who is
Swedish, took over in 2012, making him one of the most visible
executives in retail.
The
change is a move by Ralph Lauren to get its financial house in order.
Earnings at the upscale apparel company, known for its Polo brand, has
been pressured by a strong dollar and intense competition in the luxury
space. Its latest quarterly earnings of $1.09 earnings a share topped
analyst estimates, but revenue dipped 5.3 percent on a year-over-year
basis. The company’s share price has slumped by almost half this year.
In
an interview, Mr. Lauren said that he intended to remain active at the
company he founded in new roles as executive chairman and chief creative
officer. Mr. Larsson will report to Mr. Lauren, though the 75-year-old
American designer characterized their relationship as a “partnership.”
“When
they start designing things I can’t understand, I’ll quit,” Mr. Lauren
said, sitting with
Mr. Larsson at his side at his offices on Madison
Avenue, adorned with the rustic paraphernalia – a tin toy robot, cowboy
boots – that Ralph Lauren’s stores have come to be known for.
“But I don’t feel like I’m stepping back now,” Mr. Lauren said.
Still,
Mr. Larsson’s appointment is the start of a succession at one of
America’s best-known fashion houses, which, together with the likes of
Donna Karan and Calvin Klein, helped put American style on the map.
And
it is the coming end of a golden era of American postwar designers: Ms.
Karan stepped down from the helm of the house that bears her name
earlier this year; Mr. Klein stepped away from his namesake company in
2002.
Mr.
Larsson will take over as chief executive of the Ralph Lauren
Corporation in November, and will also join the company’s board.
“One of the biggest reasons for me to join is the opportunity to work side by side with someone like Ralph,” Mr. Larsson said.
Most
really successful fashion brands are stories of two partners — Yves
Saint Laurent and Pierre Berge, Calvin Klein and Barry Schwartz,
Valentino and Giancarlo Giammetti, even Giorgio Armani and Sergio
Galeotti (Mr. Armani took over as C.E.O. after he died).
Mr.
Lauren was singular in that he did both jobs on his own, at least
before and after Roger Farah. Having the dual skillset needed to have a
great aesthetic vision and run a great company is rare. Mr. Lauren’s
decision indicates that he, at least, feels it is still important to
separate the roles, and have a professional manager running the brand.
Mr.
Lauren’s most recent show at New York Fashion week was an ode to
Americans in Biarritz, with his signature perfect leather tailoring,
blue and white evening gowns, and stars in the front row (Jessica
Chastain, Julianne Moore). But his brand is a typical luxury pyramid
structure ( the model for both Calvin Klein and Michael Kors), with
luxury at the pinnacle casting an aspirational halo over the more
accessible Polo Ralph Lauren line (also now shown at New York Fashion Week), and factory stores below that form the bulk of the profits.
Recent
moves, such as hiring Valerie Hermann (formerly of St. Laurent) to make
luxury as separate business unit, and opening a private members club in
Milan suggest a new interest in becoming a luxury business (and the
high-end offering is much more popular overseas than it is at home), but
the appointment of Mr. Larsson might suggest otherwise.
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