Ralph Lauren's Brand Elevation Campaign Boosts Sales 9-Year High

Ralph Lauren, under the leadership of CEO Patrice Louvet, has successfully navigated the company through a challenging period often referred to as the “boiled frog phenomenon.” This phenomenon describes a situation where a company gradually expands too widely and engages in excessive promotional activities, leading to a slow decline in brand value and profitability. Louvet, who joined Ralph Lauren in 2017, recognized the need for a strategic shift to reverse this trend.

Before Louvet's arrival, Ralph Lauren had expanded into markets where it should not have, leading to increased promotional activities and a race to the bottom in pricing. Louvet compared this to the boiled frog phenomenon, where incremental changes over time lead to a significant problem that is difficult to reverse. He noted that while these expansions were likely well-intentioned, the cumulative effect was detrimental to the brand.

To address this issue, Louvet implemented a multi-year “brand elevation” campaign. This involved making tough choices and taking a one-year hit to reset consumer expectations. The company also closed two-thirds of its wholesale presence during the COVID-19 pandemic, focusing on a more selective distribution strategy. This move allowed Ralph Lauren to better manage its supply chain and mitigate the impact of global trade disruptions.

Louvet emphasized the importance of understanding the company's unique position in the market. He observed that Ralph Lauren is not just in the apparel business but in the “dreams business,” similar to companies like Disney. This perspective has helped the company focus on its core strengths and differentiate itself from competitors. The efforts have paid off, with margins rising and sales reaching a nine-year high, indicating that the brand elevation campaign has been successful.

Looking ahead, Louvet is confident that the company is well-positioned to handle future challenges. With a diversified manufacturing supply chain and the ability to offset tariffs through efficiency improvements and selective price increases, Ralph Lauren is prepared to navigate the complexities of the global market. Louvet's leadership has not only stabilized the company but also set it on a path for sustained growth and success.