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Question about ralph lauren lines

Discussion in 'Classic Menswear' started by JFK, Jul 26, 2004.

  1. JFK

    JFK Well-Known Member

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    I've searched the forums and can't find the answer to this question: I'm hoping someone here can outline the "heirarchy" of the different Ralph Lauren lines for me.

    I know Purple Label is the top line, and I believe that Polo is one of the higher lines, but I'm not sure about any of the others (for instance, I've seen "Lauren" and "Chaps" advertised, but wouldn't know what to expect in terms of quality); can anyone here list the different lines and how they stack up in terms of quality?
     
  2. VMan

    VMan Well-Known Member

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    Here's my understanding of it:

    Top: Purple Label

    Middle-Top: Polo Ralph Lauren (either blue or black tags), RRL (not sure if they still make this, but I've seen jeans from this line that were originally $150+)

    Middle-Bottom: Lauren (made by Jones New York I believe), Chaps, Polo University (not sure if this is still made)

    Bottom (sportswear/teen wear): Polo Sport, Polo Jeans Co.
     
  3. imageWIS

    imageWIS Well-Known Member

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    From my understanding, Chaps is lower than Polo Sport...as some Polo Sport items are expensive (relatively). I think Polo Sport was made as a direct "˜sport' variant (read: less expensive) of Polo. Most of the non-dress shoes sold in the RL stores and the RL website are labeled "Polo Sport".

    I would argue that some Polo items (at least price-wise) compete against RLPL items at a direct level. Especially the Italian-made cashmere items, that seem (to me) to be manufactured by the same company that makes the RLPL cashmere items; by cashmere items I stipulate sweaters, cardigans, etc...not sports coats, suits or anything else that is made by St. Andrews (the company RL subcontracts to manufacture their "˜tailored clothing'). Italian-made cashmere sweaters for example, from Polo cost around $500, whilst the exact same sweater (style, color, design, etc...) from RLPL costs around $650.

    Is the RLPL sweater better? If so better how? Is the cashmere better? Stitching? These are questions I ask myself, but as of yet am unable to answer.

    I will say this, though: RLPL (St. Andrews suits) are a leap (huge?) ahead of Polo RL (Corneliani) suits, especially since they are not fused and use extensive handiwork, compared to the fused and partially machine-made Polo suits.

    Jon.
     
  4. Mike C.

    Mike C. Well-Known Member

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    Polo Sport right now is being phased out, that's why it has been marketed that well and you're seeing less and less pieces.

     Polo university and Chaps are licensed crap. RL recently started buying back all their licenses to improve the overall quality.

    The regular blue label line (main line) is upping it's quality and price bigtime. Anyone notice how most pieces are more expensive this year. Most pieces are now made in Italy rather than 3rd world countries.

    Purple Label is aiming to compete with the best suit manufacturers, such as Brioni, Borrelli, etc...
     
  5. imageWIS

    imageWIS Well-Known Member

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    Yes, but have you noticed that the price of a RL Polo, Polo-shirt (Polo Polo Shirt? Hmm, that would be a good RL brand: Polo-Polo; anyways, back to the post...) went from $52.50 to $65, yet the quality stayed the same?

    I hope that when RL aims RLPL toward something, it is profit, as RLPL has from a financial standpoint been less than viable, costing the company money rather than making it. As a stockholder who likes and purchases RLPL items, I know I rather have them increase their earnings (and stock price) than continue with the RLPL brand.

    If RL has been "˜upgrading' the Polo brand, I have yet to see the quality upgrade, only the monetary cost.

    Jon.
     
  6. Mike C.

    Mike C. Well-Known Member

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    The purpose of a ultra-high end line such as RLPL is not to create profit. That line has a very slim chance at ever turning a significant profit, let alone enough to effect the stock price.

    The high end lines are used to give the brand prestige and recognition in order to sell the lower end lines. Did you know that Polo makes the majority of it's money from it's outlet stores. Those are the cash cows, not Purple Label. Look at any fashion house and see where the money is coming from, it's the fragrances and licenses.
     
  7. hermes

    hermes Well-Known Member

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    the lauren licence was cancelled with jones new york but there is a current court case over that ...... it was highly profitable and the RL company found a loophole, if i recall correctly, to get it back into its direct control

    they also own club monaco, which is thrown in somewhere in that middle grouping
     
  8. TCN

    TCN Well-Known Member

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    That's what I heard too. Additionally, I guess that Jones went ahead and copied the 2004 Lauren line for its own women's label. [​IMG]
     
  9. bigbadbuff

    bigbadbuff Well-Known Member

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    the regular RL line is decent quality that is getting better- certainly not better to the point of justifying the price increases. RLPL is as others have said all about image. Very, very few luxe lines are profitable
     
  10. JFK

    JFK Well-Known Member

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    Thanks, gents - I'd forgotten about the Polo Sport and Polo Jeans Co. (both of which I've seen in department stores and have not been too impressed). It's good to know where the other lines fit in, as I see them advertised occasionally on websites, where you don't have the advantage of actually being able to look at the details and feel the materials; I appreciate the insights.
     
  11. acole

    acole Well-Known Member

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    Thanks for a very informative thread, guys...I've been trying to get these straight myself.
     
  12. Carlo

    Carlo Well-Known Member

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    Man I enjoy this forum.

    Since I am a nerd and take things apart...

    Purple Label - Top to bottom wonderful. My favorite item? The antelope suede shirts (jackets?) that retail for around $1000... ridiculous price, unbelievable luxury.

    POLO Blue label - for suits and sportcoats. Excellent. Trousers very good. The Blue Label wears very well and is almost always very well made. Frankly I consider this one under-rated if that is possible for RL.

    The "Double RL line" which I have not seen in some years, was wonderful for Trousers. One of my favorites is a pair of solid black trousers with the "Hollywood" waistband. Have had them for years and they still kick butt. The drape and comfort is wonderful.
    ---------
    Everything else
    Crap. I have sold the University club stuff as what it is - the construction is not what those who go through this forum and Andy's would look for although they are frequently nice looking - ie, I'd never buy them at retail but if you get them cheap it's a nice line for the University set (IE, starving and wanting to look nice).

    "Ralph" and "Lauren"? Well the former desribes my reaction to both generally.

    RL makes me laugh though, some of his lawsuits against polo clubs and magazines are comical. He is angry that equestrians dare to use his trademark when smacking plastic balls with wooden mallets. There was a magazine called "POLO" that he managed to shut down since it focused on lifestyle but "Polo: Player's editiition" survived since most of the articles focus on the intricacies of the near-side backshot and the arguments between US/Argentine and English bred Ponies..... Kinda hard to say they are stealing from him.

    At the end of the day i admire Ralph, far moreso if he is serious about taking control of the empire and ensuring that his name does not appear on trash.
     
  13. skotdik

    skotdik New Member

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    Although the lower end RL stuff is crap I just figured I'd pass these links on for those who want the information. The first link is to a website about canadian manufacturers and the labels that they have licenses for. Montreal Collections Peerless Clothing has a license for the following: Chaps by Ralph Lauren, Lauren by Ralph Lauren, Calvin Klein, DKNY, Perry Ellis America, FUBU, IZOD, Micheal Kors, Stacy Adams, etc. Peerless Clothing
     
  14. imageWIS

    imageWIS Well-Known Member

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  15. shoefan

    shoefan Well-Known Member

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    Jon: I don't completely understand your logic; your analysis seems to make several assumptions which may or may not be valid. Just because companies such as Brioni don't sell lesser lines or license their names for perfumes, etc. (although Brioni does have Brioni Sport, and Brioni ties, socks, and shirts, never mind Kiton cologne&#33[​IMG], that does not necessarily mean that the RLPL line is not designed to provide a "halo" effect for the rest of the Lauren brands, or at least the Polo brand. Or, perhaps it is done as an ego trip for Ralph? (See Mercedes-Benz [Maybach] and/or Volkswagon [Phaeton] for examples of other companies that may arguably be introducing higher end products for these reasons.) Unless you are privy to the strategic and financial planning of the company, you will be hard pressed to prove your point (as will I to prove the contrary); moreover, a company's motivation may change over time. Perhaps when RLPL was first developed, the company hoped to generate a profit, but maybe reality/experience has forced them to change their rationale. I for one am skeptical that they generate much profit from the Purple Label line, seeing how little of it they seem to sell, and how much of it seems to be sold at steep discounts at the end of the season. I could be wrong, but I would bet you alot of money that the Purple Label line is considerably less profitable than the regular Polo line (measured by profit as a % of revenues.) Of course, depending on how one decides to handle cost allocations - particularly of advertising dollars and other overhead costs -, one can reach different conclusions about a product line's profitability, even if you have the numbers. Second, revenue and profit are certainly not the same thing. Historically, the company made a lot more profit through the wholesale business than the retail business, though this changed in 2004. If you look at the operating profit of the licensing business, you can see how profitable this can be (and hence why so many companies are so aggressive in licensing their names for perfumes, soaps, etc). The profits in 2004 of the licensing business were close to the combined profits of the retail and wholesale businesses, in spite of the far lower revenues, because the licensing revenues don't really have any product costs associated with them (i.e. gross margins on these revenues are 100%). This again argues for the value to the company of its image, which is affected by the Purple Label line. As for the discussion of the two separate lines of business, retail and wholesale, and how this proves RLPL is oriented along profitabilty lines, this argument makes no sense to me. The company is trying to maximize overall profitability. If it thinks that the RLPL line will improve its image, and thereby drive sales of its other lines in both the retail and wholesale channel, how does that prove the line is operated to be profitable in its own right? Again, I don't know whether the RLPL line is profitable in its own right, nor do I know if it is designed to generate a standalone profit. I just know that there a legitimate reasons why the line could be justified for reasons beyond its own profitability.
     
  16. imageWIS

    imageWIS Well-Known Member

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    When RLPL first came out, Ralph was adamant on making the brand very discreet, and that it should be known by only those "˜in the know', mimicking the same advertising certain Savile Row and high-end Italian companies use: word-of-mouth and perhaps a small select advertisement in certain "˜affluent' magazines, periodicals, etc... As well, all of the RLPL items were devoid of anything remotely close to associating it with Polo or any other RL brand. This was a brand that was a separate entity and must stand on its own. From the beginning it was sold not only through its own stores but also through NM, Saks, Louis Boston (they have now dropped the brand), etc...

    Only now has RLPL started to carry the Polo Pony on its polo-shirts, and it is only an option, as RLPL polo-shirts are available without the pony as well, meanwhile every other RLPL item is devoid of exterior insignia or product branding (save for the hideously ugly purple slip-ons with the "˜RL' embroidering in gold trim, ewww).

    As to the point of generating profit, I would argue that my proof is in the fact that RLPL was made to exist all on its own, which ultimately means generating a profit for RL. I am still adamant that that the logic behind:

    "I for one am skeptical that they generate much profit from the Purple Label line, seeing how little of it they seem to sell, and how much of it seems to be sold at steep discounts at the end of the season. I could be wrong, but I would bet you alot of money that the Purple Label line is considerably less profitable than the regular Polo line (measured by profit as a % of revenues.)"

    Is not logical at all. The reason for this is that it is illogical for RL to waste all that time, money, and recourse on a brand that does not generate any profit for the company, especially as since you put it "how little of it they seem to sell", thus it is "seemingly" not well know, thus how could it help RL's imagine if RLPL is not a widely known brand? How could a brand that is know only by a select few truly drive the image of RL to greater profitability? Also, by having a "˜higher' line, you degrade Polo's inherit quality by making items inherently "˜inferior' to RLPL items, why would RL do this, rather than just drive Polo up market? As to RLPL being discounted at the end of season, ye forget that every other manufacture deeply discounts items at seasons end, including RL's other brands, like Polo. As an example, during the summer the Worth Ave. store discounted RLPL at 50% off, at the same time it discounted Polo at 50% off; a similarity forms.

    Jon.
     
  17. HRHAndrew

    HRHAndrew Well-Known Member

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    Sorry, my business sense is egging on a reply. I am not sure how the addition or subtraction of RLPL would have any dramatic impact on profits at all. I know nothing about how they operate, but I am assuming that they drop ship purple label items. In essence, St. Andrews manufactures and ships Purple Label suits to retail outlets. They bill Ralph Lauren directly, and Raplh Lauren only places the order once they receive an initial order from a merchant. There would of course be a mark-up before RL even placed the order with their suppliers. With such limited quantities, I highly doubt that they carry any inventory so the only additional costs would be stand alone marketing as any other overheads would be consumed by the group. We know that stand alone marketing is rare, so I am not sure how RLPL would not show a profit on the books. Unless of course, there are significant managements charges from corporate to cover the above mentioned overheads. From a basic point, on the selling of clothes since I have to believe they only place order once they receive them from merchants. They must make money on the label. From an accounting stand point, I doubt the revenues are high enough to merit more than a couple line items in the financials.
     
  18. Brian SD

    Brian SD Well-Known Member

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    Jon, I would think that if the company wants to sell higher end items at higher prices but retains a name that is saturated with disdain for making subpar quality items in third world countries (as RL does), it is in their best interest to make a new line that is marketed specifically towards affluent consumers. This, in turn, will generate the idea amongst the general consumer that the company is quite capable of delivering high end products, and I would imagine is the first step towards getting a "make over" so to speak for the main company line (Polo, as I see it). I don't doubt that the company makes their best efforts to gain profit on RLPL, but I do believe it was not the primary focus of creating the line. Think about it: if all of the sudden, the company began selling Polo clothing at hideously high prices (even if they were made in Italy with the finest fabrics), it would take several years for the consumer to accept this sudden shift, and would probably result in very low profit. My best take on it is not that Ralph Lauren created RLPL simply as a marketing scheme for the lower lines, but as a way to shift their company from lower to middle-end status to higher end status, without a period of slump during the transition.
     
  19. shoefan

    shoefan Well-Known Member

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    Jon: I guess we'll have to agree to disagree.... Nevertheless, a few follow on comments. Given the brand is named Ralph Lauren Purple Label, how can you suggest that it has no association with the Ralph Lauren/Polo, RL, Lauren, etc. brands? If the company wanted the brand to stand entirely on its own, it could have developed an entirely new product line with no association with the Ralph Lauren name. (Of course, which direction the benefits from that association flow is the gist of this dialogue.) Further, the PL clothes seem to be evident in plenty of the Polo ads (e.g. the ones featuring Ralph wearing Savile Row influenced clothing), which is clearly (to me at least) an association of the PL line with the broader Ralph Lauren enterprise. Also, just because the line may not be widely known, that does not mean it is not influencing the desired/targeted audience's attitudes about the Polo products. Again, there are many instances of companies offering products that lose money in their own right but that benefit the overall brand; this may seem illogical to you, but it is not, if the follow-on benefits to the overall brand are sufficiently large. The most well known examples are in the auto business, where a low volume product may lose money but enhance the overall brand image (again, this is arguably what VW is doing with the Phaeton, which will never pay back its development costs, overhead, and manufacturing costs, but which may help drive the image, and hence the price, of the entire VW line. It has also been tried by Chevrolet - the SSR -, Ford - the new GT -, and pretty much all of the supporters of Formula 1). Your comment about markdowns doesn't address the important issue: what percent of Polo revenues are at full price vs. discount, and the same for PL. If, for example, 90% of Polo brand revenues were at full price and 10% at half off, whereas 100% of RLPL sales were at half off, which would be more profitable (or which one might be running at a loss)? Simply stating that both lines are marked down at the end of the season proves nothing. [To truly understand the profit we would also need to know the gross margin and cost structures of the two lines.] FWIW, I've worked as a consultant for over 50 Fortune 500 companies during the last 2 decades, and companies do all sort of things that are pretty stupid; don't ascribe entirely logical (never mind profit-maximizing) rationales to everything that companies do, particularly when those companies are controlled by a dominant personality. Companies do all sorts of things because of internal politics, ego gratification, and many other reasons. [By the way, your response implies that I said the PL brand is "seemingly" not well known. I stated no such thing; perhaps the reason that PL sells so little is not that it is not well known, but rather that it is so expensive (or overpriced?). Ferrari sells very few cars, but that doesn't mean they are not well known.] Andrew: I agree in part with your comments, but there are clearly going to be expenses associated only with the PL line, even in the absence of explicit advertising expenditures. It takes money to develop the products, to market (not advertise) them, and to support them internally. Look at the Licensing revenues that the company gets; you would think it would be 100% profit, since what costs are there? Yet, the company reports only about a 50% profit margin on these revenues; clearly, there are costs associated with supporting these (licensed) products. The same applies to the PL line. Of course, many of these costs will be difficult to attribute to specific product lines, and therefore will have to be allocated. Allocation of fixed costs is inherently arbitrary. Nevertheless, your (implicit) assertion that the PL line has no incremental costs to the company (aside from the product acquisition costs) is inconsistent with experiences of companies in the real world. The addition of new products always leads to higher costs. The business literature is full of analyses of company costs, using Activity Based Costing, which demonstrate that low volume product lines typically create costs far in excess of the assumed/allocated costs (which allocations are usually assigned based on volume, rather than actual work created). The costs of complexity created by product line proliferation are rarely correctly anticipated. I would agree that the PL line is likely, at the end of the day, to have little impact one way or the other on the company's profits. (BTW, I doubt the PL products are drop shipped by St Andrews; they most likely are imported and distributed by the RL Corporation.) Ultimately, a debate which is based on opinions, not facts, is one which will likely not reach a resolution. [I am reminded of an argument two of my friends once had about what would happen 6 months in the future -- they simply kept stating their predictions and rationales, back and forth, ad nauseum. How can you prove a prediction, until things actually come to pass? Without facts, there can be no proof, only opinions.]
     
  20. imageWIS

    imageWIS Well-Known Member

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    Also, by having a "˜higher' line, you degrade Polo's inherit quality by making items inherently "˜inferior' to RLPL items, why would RL do this, rather than just drive Polo up market?
    Jon, I would think that if the company wants to sell higher end items at higher prices but retains a name that is saturated with disdain for making subpar quality items in third world countries (as RL does), it is in their best interest to make a new line that is marketed specifically towards affluent consumers. This, in turn, will generate the idea amongst the general consumer that the company is quite capable of delivering high end products, and I would imagine is the first step towards getting a "make over" so to speak for the main company line (Polo, as I see it). I don't doubt that the company makes their best efforts to gain profit on RLPL, but I do believe it was not the primary focus of creating the line. Think about it: if all of the sudden, the company began selling Polo clothing at hideously high prices (even if they were made in Italy with the finest fabrics), it would take several years for the consumer to accept this sudden shift, and would probably result in very low profit. My best take on it is not that Ralph Lauren created RLPL simply as a marketing scheme for the lower lines, but as a way to shift their company from lower to middle-end status to higher end status, without a period of slump during the transition.
    But, RL has always been somewhat (or has been directly) high-end. Ever since RL clothed the cast of The Great Gatsby, the elegance and price of RL has been there. From mimicking T&A shirts and Chester Barrie suits and Edward Green shoes, to RL actually subcontracting from these companies to make his clothing for him, to the selling of a certain (WASP, for my vocabulary's current lack of a better word) fabled lifestyle which is bound to affluence, RL has always aimed towards the higher-end of the spectrum. During the 80's and before RLPL, RL Polo's were twice as much (more than twice?) in Europe than in America for the simple reason that they were marketed towards the higher spectrum of the market and for good reason, he wanted to establish Polo as a high-end line that could cater to the same people in Europe that purchased "˜established' European clothing brands. And this continues to this day, with the expansion of a brand new store on (New?) Bond St and the upcoming store in Milan. As I have noticed, RL has taken the Porsche approach by slightly modifying their product every year, but at the same time slightly raising their prices. The most dramatic increase in prices I can recall is this year with the aforementioned raise in the price of a standard Polo shirt from $52.50 to $65.00, without an increase in quality mind you. Of, course this is partially due to increasing competition (Lacoste comes to mind) and their wanting to compete at the same "˜price' level. Consumers seem to accept whatever is thrown at them; the recent ebay suit thread should be an indication of that. The average consumer would accept a price increase without giving it second thought. Polo has sold cashmere sweaters, cardigans, etc...fro many years at extremely high prices, that almost reach RLPL's, at the same time they are made in Italy and as far as I have been able to ascertain, the quality is right in line or a minute notch below RLPL (perhaps less handiwork?). Jon.
     

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