BEAR MARKET

Ralph Lauren is loving streetwear right now

The Polo bear as it’s usually seen—sans skateboard.
The Polo bear as it’s usually seen—sans skateboard.
Image: Reuters/Shannon Stapleton
By
We may earn a commission from links on this page.

Ralph Lauren launched a collaboration in November with UK skate brand Palace that included items such as a $475 sweater featuring the Polo bear doing a heel flip. It had streetwear fanatics drooling.

Shortly after, Ralph Lauren dropped its Winter Stadium capsule, based on the 1992 “Stadium” collection for Polo that became an object of obsession (paywall) for New York’s Lo Life crew, helping cement Polo’s credibility in New York and in hip-hop. Again, fans were clamoring online and in stores to get their hands on the hyped pieces.

These limited-edition releases were part of a strategy to inject some vitality into the label, which had become a familiar site on discount-store racks, and to attract a new generation of shoppers who might be found lining up for streetwear but not the 50-year-old Ralph Lauren brand. According to Ralph Lauren, it’s working.

“We are now little more than a year into our approach to drive energy and excitement around our brand with limited-edition releases, and we continue to be encouraged by the traction these drops are gaining,” CEO Patrice Louvet said on a call with investors today (Feb. 5) to discuss the company’s strong recent quarter.

Louvet noted that roughly 75% of those who bought items from the Palace collaboration were “completely new” customers to Ralph Lauren, and on average about 10 years younger than the typical Polo men’s shopper. He said they saw similar numbers with the Winter Stadium collection and others.

Actual sales from these releases generally aren’t huge for a company as big as Ralph Lauren, which saw its global sales grow about 5% to $1.7 billion in the quarter. Brands have embraced them as an effective way to drum up excitement. In a recent survey of 117 fashion and beauty brand executives by the site Glossy, 38% said collaborations were their greatest marketing opportunity outside of digital efforts, outranking all others. Ralph Lauren pointed to the limited collections as one of its “key marketing initiatives,” saying it increased its marketing spend 18% in the quarter versus last year.

The challenge is always to get customers of limited releases to come back, but Louvet added that one of the “encouraging data points” they saw was that the collections appear to be creating repeat customers. Half of those who bought pieces from the Winter Stadium capsule had purchased something from a prior drop, giving the company confidence that, as it brought in new shoppers, it would be “able to keep a majority of them moving forward.” Unsurprisingly, Ralph Lauren is planning more limited releases, though Louvet said they’re being careful not to overdo them, “because otherwise these things will run out of steam.”

Along with grabbing young shoppers, Ralph Lauren has sought to revitalize its core products, build up underdeveloped categories, expand its digital capabilities, stay disciplined about operating costs, and continue its expansion overseas. On that last note, it saw double-digit sales growth in Europe and Asia in the quarter. Overall it was a good step in the right direction.