Ralph Lauren Corporation is galloping at a faster clip than when its namesake founder first entered the arena more than 40 years ago. With golden mallet brands such as Polo by Ralph Lauren, Chaps, RRL, Rugby, Club Monaco, and American Living, the company designs and markets apparel and accessories, home furnishings, and fragrances. Its collections are available at some 9,000 locations worldwide, including many upscale and mid-tier department stores. (Macy's accounts for 19% of all wholesale revenue.) The firm also operates about 370 Ralph Lauren, Club Monaco, and Rugby retail stores worldwide as well as the e-commerce sites RalphLauren.com and Rugby.com. American style icon and CEO Lauren controls the company.
In recent years Ralph Lauren has expanded its business through acquisitions, extended the reach of its retail operations, and experienced organic growth. Its accessories rival European competitors as a luxury brand, thanks to strategic partnerships with licensees including Richemont SA (to form Ralph Lauren Watch and Jewelry Co.) and the Italian eyewear giant Luxottica Group, which designs, manufactures, and distributes Ralph Lauren-branded prescription frames and sunglasses. Luxottica's US arm also makes Club Monaco-branded prescription frames and sunglasses sold in the US and Canada.
Other major licensing partners include Hanes (under garments and sleepwear), L'Oréal (fragrance), Warnaco (Chaps sportswear), and JC Penney, which markets its mid-priced American Living-branded clothes and housewares. With its products available in every section of a department store -- there's even Ralph Lauren paint at Home Depot -- the company remains profitable as a leader in the fashion and retail industry.
To give the apparel maker more control of its operations in Asia, which represents 12% of sales, Ralph Lauren has been buying out its licensees. In 2010 it bought its South Korean wholesale and retail distribution operation from licensee Doosan Corp. for about $47 million. Previously, it bought out its licensing partner Dickson Concepts in a deal valued at about $37 million in late 2009. Dickson was a licensee for the Polo brand in China, Hong Kong, Indonesia, Malaysia, the Philippines, Singapore, Taiwan, and Thailand. It also acquired the children's wear and golf apparel inventory of former licensee, Naigai Co. Ltd., based in Japan.
Ralph Lauren is further able to bring its classic American style to the global market as an official outfitter of the US Olympic team. It has counted on its association with the Olympics to translate into millions of dollars in sales of Olympics-branded apparel and accessories. The firm has extended the deal to the 2012 Summer Olympics in London, and beyond.
Ralph Lauren controls the company through his ownership of about 76% of the voting shares of the company. In mid-2010 Lauren had disclosed plans to sell more than a quarter of his holdings as "part of his individual asset diversification plan." Despite possibly netting about $955 million through the sale, the chief executive still maintains a stake sizeable enough to remain in control of the company. Around this time, as well, the company changed its name by dropping the Polo from its Polo Ralph Lauren Corporation.