Can a fast fashion vet steer Ralph Lauren’s ship?
Shocking many fashion insiders, Ralph Lauren Corp. hired Stefan Larsson, a former H&M executive and president of Old Navy, to replace Ralph Lauren as CEO.
Mr. Lauren, 75, will remain active as executive chairman and chief creative officer and is expected to continue to oversee the luxury side. Mr. Larsson will report to Mr. Lauren in what’s described as a "partnership."
Mr. Larsson, 41, is credited with reviving Old Navy after taking over in 2012 with a focus on upgrading design and bringing over some quick-turnaround supply chain tricks he learned in his 15 years at H&M. He takes over as CEO of Ralph Lauren Corp. in November.
Ralph Lauren Corp.’s revenues slid 5.3 percent in the second quarter due to a strengthening dollar that affected both overseas profits and tourist traffic at its stores in the U.S. The company has also faced heightened competition in the luxury channel this year. Shares are down around 40 percent this year.
The recruitment of Mr. Larsson was the latest example of the insular luxury industry looking outside for talent. LVMH recently hired an Apple executive as chief digital officer, Chanel SA’s CEO spent 15 years at Gap, and Grita Loebsack, a former VP at Unilever Plc, was recently hired as CEO of Kering’s emerging brands, which include Stella McCartney and Gucci.
Stefan Larsson – Photo: Gap, Inc.
"You see a lot of luxury brands now recruiting from other industries," Milton Pedraza, the CEO of the Luxury Institute, a research firm, told The Wall Street Journal. "They need executives with skills the luxury industry doesn’t necessarily have such as an expertise in global distribution or digital marketing."
Mr. Larsson, who is Swedish, is expected to be useful in expanding Ralph Lauren’s business overseas. An outside CEO may also make aggressive calls to reduce expenses and bring more sophistication to an organization.
Odeon Capital analyst Rick Snyder told Reuters the company had grown to a size where it needed more "systems and controls."
The New York Times said that for the legendary designer, the hiring "indicates that he, at least, feels it is still important to separate the roles and have a professional manager running the brand and reassuring Wall Street."
Still others felt the business model may be due for a more radical change, with department store growth slowing and fast-fashion retailers like H&M, Uniqlo and Zara leading fashion’s growth.
"Larsson has a track record of expanding very well," longtime industry analyst Walter F. Loeb told the Daily News. "His contribution to Ralph Lauren will be global expansion and, more importantly, discipline within the company."
- Ralph Lauren, Creator of Fashion Empire, Is Stepping Down as C.E.O. – The New York Times (tiered sub.)
- Ralph Lauren Names Stefan Larsson Ceo; Will Continue To Lead Company As Executive Chairman And Chief Creative Officer – Ralph Lauren Corp.
- Ralph Lauren hires Old Navy executive to replace him as CEO – Reuters
- Ralph Lauren Hands Reins to an Outsider – The Wall Street Journal (sub. required)
- Ralph Lauren Asserts His Control After Naming of New Chief – The New York Times (tiered sub.)
- New Ralph Lauren Chief Revived Old Navy After Successes at H&M – The New York Times (tiered sub.)
- Fashion Insiders React to Ralph Lauren’s Announcement of New C.E.O. – The New York Times (tiered sub.)
- Meet Stefan Larsson, the Old Navy exec who’s taking over at Ralph Lauren – New York Daily News
Do you think Ralph Lauren Corp. made a wise choice in hiring Old Navy’s president as CEO? What may Mr. Larsson bring to Ralph Lauren Corp? What does Mr. Larsson’s hiring say about how luxury retailing is changing?
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9 Comments on "Can a fast fashion vet steer Ralph Lauren’s ship?"
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As to the wisdom of the choice, only time will tell.
On paper Larsson is an interesting and perhaps logical successor but, that said, Ralph Lauren is the antithesis of the fast-fashion label. I think any attempt to make the line “hip” or “contemporary” may fall on its face and injure the brand.
On the other hand, Larsson did an adequate job at Gap, does have international experience and may bring discipline to the organization.
As to what his hiring says about luxury merchandising, it seems luxury ain’t what it used to be and may no longer make sense for mass brands.
Ralph Lauren has enjoyed an amazing run and could use a fresh perspective. Lapsing into literalism (luxury vs. fast fashion) misses the point. Mr. Larsson will bring refined processes, next-stage efficiencies and a systematic approach to expanding Ralph Lauren’s many mature brands into global markets. His track record at Old Navy (the star in an otherwise struggling Gap portfolio) and prior experience at H&M will breathe new life into Ralph Lauren. A huge loss for Gap.
Time will tell whether Mr. Larsson’s evident business acumen extends to the importance of brand image at Ralph Lauren. More than almost any company crossing multiple retail channels, Lauren has maintained a focus on near-luxury (and higher) lifestyle merchandising. Most people know what the Lauren brand stands for, which is a credit to Mr. Lauren’s vision and consistency over the years.
You have to assume that Ralph Lauren was sold on Mr. Larsson’s own vision for the company, not simply his ability to manage fast fashion or global sourcing. But clearly some kind of management succession at a big public company like Ralph Lauren was bound to happen, and was probably overdue.
I’m sure this was a carefully thought-out decision.
It’s a rare brand that is as disciplined and thought-out as the Ralph Lauren brand. Mr. Larsson has certainly been thoroughly vetted and his plans for the future examined. I have every confidence in Ralph Lauren’s judgment.
Skill sets vary so dramatically among people required to lead change. The challenge to lead change in systems and discipline within a fashion brand is indeed a challenge since the culture of fashion brands is seen as more creative and inspirational. It’s a fine balance and success will likely be dependent on finesse, communications and commitment. Mr. Larsson seems to have earned the respect of Ralph Lauren, but I wonder about David, whom I’ve come to see as the true innovator for the brand.
The challenge will be how well the company can be reinvigorated by combining a fashion sense along with Ralph Lauren’s well-established image. Changing to a new image is not likely to be successful because changing a brand is extremely difficult. However, adding to/expanding/modernizing an image is an opportunity. How wise the choice of Mr Larsson is will be revealed over time.
As my now far flung family’s homes and closets attest, we have long been Ralph Lauren fans. The quality of the products and the low-key but never boring classic sensibility of his timeless taste and style have rarely wavered over the years or over several generations of shoppers. If Mr. Lauren believes that Mr. Larsson is the man for the job then I am confident he is.
I’m fascinated to see that I am not alone in this, judging from many of the comments posted here this morning. Think back to how often the discussion topics cover companies which have lost their way, or their focus, or their mojo, or seem confused or flailing. The descriptions others have used to describe Ralph Lauren (words like discipline and consistency) say it all about this eponymous brand’s past and its future.
Either Mr. Larsson was misplaced at Old Navy or is now misplaced at Ralph. One of the two. Those brands are SO different, I don’t see just using the “same principles” as a theory that works. Customer mindset, for one thing, is like Pluto and Venus—very far apart, in case you haven’t been keeping track.
Taking someone from Abercrombie would actually be a better fit, IMO. At least they have the same take on quality and exclusivity.
Future is bright with endless possiblity.