Lessons from Ralph Lauren’s Big News
Photo via The New York Times
The surprise announcement yesterday that Ralph Lauren would be stepping down as Chief Executive Officer of the eponymous label he founded in 1967 had reverberating effects felt far beyond what was surely a frenzied day for the brand’s public relations team. Naturally, the fashion press was all over the story, and for once, the characteristically hyperbolic language favored by so many fashion writers seemed appropriate; Lauren has created a fashion empire so vast and a culture around it so influential that describing the designer as “iconic” and “legendary,” and his decision to step down as “big f—–g news,” seems warranted.
There’s also been much speculation that the move, and specifically the choice of a successor in Stefan Larsson, late of Old Navy, was made to appease investors, as Ralph Lauren shares have fallen by some 44% this year. Even for a company that does $7.6 billion in sales annually – numbers that would make other brands drool on their spreadsheets – that’s a disconcerting dip. Larsson is credited with turning Old Navy into a retail juggernaut, a consistent bright spot in GAP’s unsteady portfolio. He also brings with him some 15 years experience at another retail behemoth, H&M, from his native Sweden. WWD reports that the news of Larsson’s new post was met favorably on Wall Street, with stocks jumping up 13% after the changes were announced.
But, the announcement raises some important questions for any luxury brand to consider in a rapidly changing fashion landscape. As The Cut’s venerable critic Cathy Horyn points out, “Lauren’s decision to step aside is a reminder to executives and founders that maybe they don’t know as much as they think they do — and maybe someone else knows more about what’s relevant for today.”
The reality of the fashion business today has very little in common with the way the industry functioned when Ralph Lauren first opened up its doors in the 60’s; it doesn’t even look much like it did just five years ago when the brand introduced its first online fashion show, a precursor to today’s live streaming and Periscope broadcasting that seems positively archaic in comparison. Ralph Lauren, the man, was smart enough to surround himself with people on the cutting edge (see also: the PoloTech smart shirt that was released this summer). But at what point is that not enough?
“The market challenges are simply too enormous, and they are changing at a pace that very few veteran retail and fashion executives can grasp,” Horyn writes.
While the fact that Larsson comes from within the world of fashion may be encouraging for people who’ve watched the tech industry poach top talent, it should be noted that he comes from a world that is decidedly non-luxury, as did current Chanel CEO Maureen Chiquet, who left her post at Banana Republic to join that legendary house.
Which brings us to maybe the biggest lesson of all that Larsson is in a position to prove true: if luxury houses want to stay alive, they need to either groom nimble, forward-thinking talent from within, or hope that, like Lauren, they’re able to find outsiders from more dynamic sectors to swoop in and save the day when they need it most.
