Ralph Lauren is a major US luxury brand that plans to open its first company-owned stores in mainland China to capitalize on growing demand from affluent Chinese consumers. This move is part of Ralph Lauren's broader effort to increase its presence in Asia, where licensees previously handled its business. While Asia currently accounts for just over 9% of Ralph Lauren's $4.9 billion in annual revenues, the company sees China as a unique opportunity for growth.

1. P o l o
R a l p h
L a u r e n
Brianca
German
FTM
385
601
March
24,
2011
With
input
from
Rasoul
Butler,
Ashley
Hardesty,
Pherin
Gregory,
Marissa
Monroe

2. Company
Overview
Ticker
Symbol:
RL
Headquarters:
625
Madison
Ave.
New
York,
New
York
Total
Annual
Sales
in
2010:
$4,978,900
Locations:
New
York,
NY;
Paris,
France;
Milan,
Italy;
Tokyo,
Japan;
London,
England;
Greenwich,
CT;
Moscow,
Russia;
Chicago,
IL
Branded
merchandise
available
in
approximately
9,000
different
retail
worldwide
Target
Market:
Women,
Men
&
Young
Children
that
enjoy
adventure,
culture
and
vintage
pieces
that
are
incorporated
into
their
own
style
Stock
Statistics
Date
Open
Close
Net
Change
%
Change
Total
Volume
31-­‐Jan-­‐11 104.23
107.18
2.95
2.83%
1,142,000
1-­‐Feb-­‐11
107.9
106.91
-­‐0.99
-­‐0.92%
1,217,600
2-­‐Feb-­‐11
106.62
106.82
0.2
0.19%
702,400
3-­‐Feb-­‐11
106.86
108.59
1.73
1.62%
721,500
4-­‐Feb-­‐11
108.76
112.56
3.8
3.49%
1,545,400
7-­‐Feb-­‐11
112.66
113.84
1.18
1.05%
870,700
8-­‐Feb-­‐11
114.25
115.77
1.52
1.33%
1,132,000
9-­‐Feb-­‐11
120.41
125.35
4.94
4.10%
3,488,800
10-­‐Feb-­‐11
124.51
126.98
2.47
1.98%
1,612,700
11-­‐Feb-­‐11
126.24
126.87
0.63
0.50%
663,600
14-­‐Feb-­‐11
126.87
126.46
-­‐0.41
-­‐0.32%
902,000
15-­‐Feb-­‐11
125.72
125.04
-­‐0.68
-­‐0.54%
851,500
16-­‐Feb-­‐11
125.75
125.56
-­‐0.19
-­‐0.15%
488,800
17-­‐Feb-­‐11
124.93
124.92
-­‐0.01
-­‐0.01%
730,300
18-­‐Feb-­‐11
125.05
127.98
2.93
2.34%
918,000
22-­‐Feb-­‐11
126.49
123.78
-­‐2.71
-­‐2.14%
985,500
23-­‐Feb-­‐11
123.94
122.1
-­‐1.84
-­‐1.48%
1,418,100
24-­‐Feb-­‐11
121.93
123.79
1.86
1.53%
1,112,700
25-­‐Feb-­‐11
124.42
125.29
0.87
0.70%
819,800
28-­‐Feb-­‐11
125.43
126.71
1.28
1.02%
811,200
1-­‐Mar-­‐11
126.91
124.1
-­‐2.81
-­‐2.21%
1,041,300
2-­‐Mar-­‐11
124.11
124.29
0.18
0.15%
743,300
3-­‐Mar-­‐11
125.83
126.46
0.63
0.50%
624,800
4-­‐Mar-­‐11
126.45
125.29
-­‐1.16
-­‐0.92%
637,500
7-­‐Mar-­‐11
126.06
124.62
-­‐1.44
-­‐1.14%
469,800
8-­‐Mar-­‐11
124.87
126.6
1.73
1.39%
747,000
9-­‐Mar-­‐11
126.02
126.78
0.76
0.60%
546,500
10-­‐Mar-­‐11
125.15
125.51
0.36
0.29%
709,000

3.
-1.00%
-3.00%
-2.00%
1.00%
0.00%
2.00%
3.00%
4.00%
5.00%
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
500,000
0
31-­‐Jan-­‐11
31-Jan-11
2-­‐Feb-­‐11
2-Feb-11
4-­‐Feb-­‐11
4-Feb-11
6-­‐Feb-­‐11
6-Feb-11
8-­‐Feb-­‐11
8-Feb-11
10-­‐Feb-­‐11
10-Feb-11
12-­‐Feb-­‐11
12-Feb-11
14-­‐Feb-­‐11
14-Feb-11
16-­‐Feb-­‐11
16-Feb-11
18-­‐Feb-­‐11
18-Feb-11
20-­‐Feb-­‐11
20-Feb-11
22-­‐Feb-­‐11
22-Feb-11
24-­‐Feb-­‐11
24-Feb-11
Total Volume
26-­‐Feb-­‐11
26-Feb-11
28-­‐Feb-­‐11
28-Feb-11
Percent Change
2-­‐Mar-­‐11
2-Mar-11
4-­‐Mar-­‐11
4-Mar-11
6-­‐Mar-­‐11
6-Mar-11
8-­‐Mar-­‐11
8-Mar-11
10-­‐Mar-­‐11
10-Mar-11
%
Total
Volume
Change

4. 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)

5. 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.

6. 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.

7. References
1. Bertner,
Jaclyn.,
and
Jennifer
Mosscrop.
"RILA
Praises
Quinn
for
Signing
E-­‐
Fairness
Legislation."
Chain
Store
Age
(News
And
Analysis
For
Retail
Executives).
N.p.,
1925.
Web.
Mar.
2011.
http://www.chainstoreage.com/article/rila-­‐praises-­‐
quinn-­‐signing-­‐e-­‐fairness-­‐legislation
2. Birchall,
Jonathan.
"Polo
Ralph
Lauren
Eyes
Locations
for
China
Stores."
The
Financial
Times
Feb.
2011.
18.
Lexis
Nexis
Academic.
Web.
10
Feb.
2011.
<http://www.lexisnexis.com/hottopics/lnacademic/?shr=t&csi=306164&sr=HLEA
D(Polo%27s+Profits%2C+Shares+Soar+On+Strong+Overseas+Growth)+and+date
+is+February%2C%202011
3. Lexis
Nexis
Academic.
Web.
10
Feb.
2011.
http://www.lexisnexis.com/hottopics/lnacademic/?shr=t&csi=306164&sr=HLEA
D(Polo%27s+Profits%2C+Shares+Soar+On+Strong+Overseas+Growth)+and+date
+is+February%2C%202011
4. "Polo
Ralph
Lauren
Corporation."
(n.d.):
Datamonitor
Company
Profiles
Authority.
EBSCO.
Web.
25
Mar.
2011.
5. Ralph
Lauren.
Ralph
Lauren,
2011.
Web.
31
Jan.
2011.
<http://www.ralphlauren.com/home/index.jsp?direct
6. Ralph
Lauren
Stock
Exchange."
Yahoo!
Finance.
N.p.,
2011.
Web.
31
Jan.
2011.
http://finance.yahoo.com/
7. Ralph
Lauren
Stock
Exchange."
Nasdaq.
N.p.,
2011.
Web.
31
Jan.
2011.
http://www.nasdaq.com/
8. "The
Trend
in
Clothing
Prices:
High
Cotton."
The
Palm
Beach
Newspapers,
Inc..
N.p.,
Feb.
2011.
Web.
14
Mar.
2011.
<http://www.lexisnexis.com/hottopics/lnacademic/?shr=t&csi=144576&sr=HLEA
D(The+trend+in+clothing+prices)+and+date+is+February%2C%202011>>.
9. Trefis,
Team.
"Outlook
for
Coach's
New
Store
Openings."
Nasdaq.
N.p.,
Feb.
2011.
Web.
13
Mar.
2011.
<http://community.nasdaq.com/News/2011-­‐
02/outlook-­‐for-­‐coachs-­‐new-­‐store-­‐openings.aspx?storyid=57830>.>.
10. Tse,
Andrea.
"Cotton
Prices:
Room
to
Rise
Even
Higher."
The
Street.
N.p.,
3
Mar.
2011.
Web.
4
Mar.
2011.
<http://www.thestreet.com/_nasdaq/story/11030175/1/cotton-­‐prices-­‐room-­‐to-­‐
rise-­‐even-­‐higher.html?&cm_ven=nasdaq&cm_cat=free&cm_ite=na>.
11. Yong,
Vicki
M.
"Polo's
Profits,
Shares
Soar
on
Strong
Overseas
Growth."
Women's
Wear
Daily
10
Feb.
2011.
1.