Turnaround Plan Starting to Show Some Positive signs
I have followed Ralph Lauren Corporation (RL) for a while and I have always thought it's an interesting case. Ralph Lauren, despite the strong position as an American iconic brand, the good geographical diversification, and the relatively strong pricing power, hasn't been immune to the weakness in the retail industry. Actually, the overexpansion in several new brands has had an additional negative effect on revenue and margins, as the lost focus on the company's core strength made it even more difficult for them to offset the negative effects of the weak environment.
Anyway, Ralph Lauren has started to implement a turnaround plan that includes store closures, tighter inventory management, a reduction in excess discounts, excess inventory, improvements in supply chain lead times, and an optimization of the portfolio of styles/brands, with a refocusing on Ralph Lauren's core strengths. Together with the necessary adjustments to its product offerings, store fleet and overall strategy, it's important for every brand in the 21st century to adapt to the changing consumer environment. Technology has transformed the way people shop and interact with brands. In order to compete effectively in this environment and face the challenge posed by eCommerce, brands have to create an omnichannel shopping experience that gives value to customers. Some brands have been proactive on this front while others have been laggards, while Ralph Lauren seems to be somewhere in the middle.
