Article 1 Ralph Lauren is one of the top US luxury brands and it plans to open its first company-‐owned stores in Mainland China, joining a line of up-‐market Western brands eager to serve increasing demand from affluent Chinese consumers. Ralph Lauren is known for its preppy look pioneered by its founder Ralph Lauren, who planned to establish an e-‐commerce presence in China and elsewhere in Asia to reinforce its brand. China was described as a “once-‐in-‐a-‐lifetime opportunity.” The company is trying to move quickly to accelerate strategies of e-‐commerce in order to aid in overlaying the brand positioning that they are trying to achieve. The company’s plans for China are part of a broader effort to step up its performance in Asia, where licensees have previously handled its business. Asia accounted for just over 9% of the group’s revenues of $4.9 billion in its most recent fiscal year, and about 70% of its business coming from North America. The group has recently taken over control of its licenses in South Korea and Japan. Ralph Lauren is also looking to open high-‐profile company-‐owned stores throughout Asia, in contrast with its previous dependence on licensees focused on selling its men’s wear line through concessions or leased space in department stores. To reinforce its image as a lifestyle brand that embraces not only fashion but also accessories, home furnishings and other items, Ralph Lauren also relies on its stores in its home US Market. Ralph Laurens expansion to China locations will help raise profits since the Asian consumers are demanding western brands. Article 2 According to Women’s Wear Daily, Ralph Lauren said their third quarter profits and sales rose at a double-‐digit pace. It also raised its 2011 profit outlook, quarterly dividend and stock buyback authorization. This is good news to current stockholders and potential investors. The week this was announced, RL stock reached an all-‐time high of $128.04 before closing at $125.35, which put them up 8.3%. If investors know there will be a large return on their investment at some point, due to percentage increases in stock and higher dividends, they are more likely to invest. When a company is known to do well, consumers are more likely to buy from them, because there is little fear of them disappearing, as many companies have been forced to do with the recent state of the economy. Another contributing factor mentioned by WWD was Polo’s Asian global market. They have had a presence in the Asian market for a while now but have recently (since 2008) been regaining control of their licensed operations there. The company took direct control of its previously licensed South Korean operations on January 1, 2011, as mentioned earlier. The president of Polo noted: “The Asian customer is driving a large part of the growth in the luxury market, both at home and abroad.” (WWD)
Article 3 We have noticed the trend of Ralph Lauren becoming more global and controlling of its own stores throughout the stock observance. As we moved along towards the middle of the six weeks we also notice that although prices were high this was the third lowest stock prices compared to the other opening and closing stock weeks. In researching our it was found that cotton cost were at an ultimate high during this week, which may have caused the moderate change in the Ralph Lauren stock. According to the article, “Consumers are going to see an uncharacteristic upswing in clothing prices” and less purchasing. Article 4 Ralph Lauren holds a major influence in the retail industry. As noted before The RL brand has started opening and taking more control over its licensed stores within the Asian market. With this being said, it must be noted that not only has Ralph Lauren been creating new pathways for its brand but Coach as well. Coach has been noticed opening new doors for its brand, during week three of the stock study, which may explain the fluctuations within Ralph Lauren’s stock during this week. Coach is a major competitor of Ralph Lauren, therefore impacting their stocks for the week as well as their own. Along with Coach opening new doors during this week it was also Valentine’s Day, which could have had some miscellaneous impact to their numbers as well. Article 5 Just as was seen during week three of the stock observance for Ralph Lauren we noticed another increase in cotton prices. The article that was found to represent this data predicted that since Cotton has become such a large commodity within the retail industry, and their being a lack of resources to accommodate this need for the agricultural product prices for cotton will continue to rise. The article stated that by 2012 revenue for cotton would increase by more than 80% from years before. As cotton growers such as China continue to improve and industrialize cotton will continue to be raised in price. Ralph Lauren who is controlling more of its stores in its Asian market including China may or may not have an upper hand when it comes to the distribution for the cotton and the prices given. With prices rising for cotton it may also hurt Ralph Lauren with much of its products being created using this specific agricultural product. This would also affect not only the production side of Ralph Lauren but also its retail side due to the increase in price for the brands clothing. As the cotton prices increase so does the brand price in order to keep up with the Cost of Goods that are being sold. The increase in price for this specific brand may cause consumers to reluctantly pay for the product depending on how high the prices are increased.
Article 6 In opening stores and gaining more control of the market Ralph Lauren is creating new strides for his company. As the brand known as Ralph Lauren changes the consumer world is as well. As the final week started to finalize another bill was passed that required Sales Tax on internet shopping to be enforced and managed. As more people have begun to shop online they will be notified of the sales tax that they must pay for their items, prior to this only Brick and mortar shops were required to collect sales tax putting them in a disadvantage compared to their online-‐counterparts who could virtually sell their products for cheaper since their was technically no sales tax being put on their items. This legislation signing appeared during the middle of the Stock week for Ralph Lauren, which could be the reason for its fluctuation and eventual decline in the opening & closing prices and their volumes. Now passed in four states customers are being made to pay the sales tax on their internet-‐purchased items, which may in the future even affect Ralph Lauren’s sales more. Overall the Ralph Lauren brand did very well over the six-‐week stock observance. From the statistics that was gained Ralph Lauren was pretty consistent. While tracking the RL brand we did at times see extremely high numbers as well as low. These major fluctuations in a minor time period were thought to be from competitors such as Coach opening new stores during week four and also the new Sales Tax legislation signed created by RILA (Retail Industry Leaders Industry Association). With their high fluctuations during weeks two and three these may have been due to Ralph Lauren paying more attention to their brand and managing it themselves in Japan. Ralph Lauren as a brand and company is doing very well, yet improvements within distinguishing factors between it and Coach would greatly help build revenue and sales. Also as Ralph Lauren becomes more abundant within the Asian market the brand could incorporate more Asian themes in order to enforce that this brand is for everyone that dreams of the lifestyle that is being created within the Ralph Lauren persona. While creating a more inclusive brand and distinguishing Ralph Lauren from competitors the brand Ralph Lauren must also keep in mind the new sales tax legislation that we saw signed during the final week of stock observance. This must become one of the primary goals in order for Ralph Lauren to keep their consumers satisfied even though they were paying more for their brand due to the taxation.
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