Ralph Lauren – Restructuring & Expansion Amid Growth

Uncertainty – 29 April 2021

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Specialist:

Title:

Brooke Gerschel (BG)

Former Chief Marketing Officer & SVP, Corporate Merchandising, Women's Polo Apparel,

Accessories & Footwear at Ralph Lauren Corp

Moderator: Nyree Hinton (NH), Third Bridge Sector Analyst

Agenda:

1. Ralph Lauren's (NYSE: RL) restructuring efforts in North America

2. Distribution challenges across e-commerce, retail and wholesale

3. Global expansion and opportunity markets

4. Premium fashion apparel outlook

Contents

Q: Could you give an overview of the premium apparel industry, focusing on women’s Ralph Lauren? What

are some of the key industry drivers and who are the top competitors? Are you aware of unique stark

differences across women’s and men’s?

Q: How would you compare premium apparel industry trends pre- and post-pandemic? Have they

exacerbated amid the coronavirus?

Q: Could you give a high-level overview of Ralph Lauren and the categories it operates in? How might that

break down geographically?

Q: What do you think is Ralph Lauren’s bread and butter? How did the focus shift to accessories from apparel

over the many years you were there?

Q: How has Ralph Lauren shifted the focus of its investment capital from women’s apparel to women’s

accessories or women’s sportswear and then to casual clothing? How have consumers shifted their spend

across categories?

Q: How has Ralph Lauren performed in and adjusted to the global pandemic? What tough decisions might it

have had to make to continue running smoothly?

Q: Did Ralph Lauren experience declines across all categories and every geographic location? You mentioned

areas such as home potentially making up for some of the slack experienced elsewhere. What are your thoughts

on regions such as China potentially picking up slack experienced in other geographies?

Q: You mentioned men’s is leading the way in Ralph Lauren. Would you say women’s or children’s is second

largest?

Q: What struggles has Ralph Lauren faced when trying to expand into women’s polo?

Q: When do you think Ralph Lauren’s management team realised it was missing a complete women’s

demographic or consumer and decided to start prioritising assets and resources to innovate in this category

and spend capital to invent the brand?

Q: I believe Ralph Lauren shut down its Rugby brand. Why do you think it decided to do that?

Q: How do players such as Ralph Lauren handle consumer fallout when they decide to end a brand, perhaps

for distribution or cost reasons? Is there typically consumer feedback questioning what happened to the brand?

What might stop a consumer from switching to other luxury women’s brands?

Q: What key challenges or inefficiencies did Ralph Lauren’s turnaround plan hope to address over the last few

years? You have mentioned quite a few challenges, but what do you think was most important about the

planning?

Q: There’s no doubt about Ralph Lauren’s brand equity, despite its financial challenges, as you mentioned.

Young consumers – in a generation that moves quickly across brands – still assess Ralph Lauren as a premium

and high quality. How has Ralph Lauren preserved its premium brand image and brand equity, while the

brand equity of other brands that are as old as Ralph Lauren’s has diluted?

Q: What do you think Ralph Lauren’s appetite for an acquisition might be, perhaps of a younger or trendier

brand with aligned values, considering its soft SKU and how it is marketing and presenting itself?

Q: You mentioned the distribution landscape shifting towards D2C, from wholesalers controlling this. Could

you expand on that evolution and how quickly Ralph Lauren has been able to adapt to this given its important

relationships with large players such as Macy’s?

Q: How has Ralph Lauren committed to ESG issues and approached supply chain material sourcing, which

are commonly overlooked? Do you think it needs to get ahead of these over the next 6-24 months? Does the

company source any materials from countries with flags? Brands such as H&M have struggled and have made

political missteps with labour issues in China.

Ralph Lauren – Restructuring & Expansion Amid Growth

Uncertainty

Transcription begins at 00:00:00 of the recorded material

NH: Welcome to Third Bridge Forum’s entitled Ralph Lauren – Restructuring & Expansion Amid Growth

Uncertainty. I’m Nyree Hinton and I’ll be facilitating today’s Interview with Ms Brooke Gerschel, former Chief

Marketing Officer and SVP for Corporate Merchandising Women’s Polo Apparel Accessories and Footwear at

Ralph Lauren Corp.

Brooke, before we get started with today’s Interview please state I agree or I disagree to the following

statement. You understand the definition of material and non-public information and agree not to disclose any

such information or any other information which is confidential during this Interview.

BG: I agree.

NH: Could you begin by briefly introducing your yourself and the various roles you have held in the industry?

BG: I was fortunate enough to have an amazing career at Ralph Lauren for almost 22 years. I started out my

career in the buying office, overseeing buying for all of Ralph Lauren North America stores and then I

transitioned quite a while ago, over 15 years ago, into merchandising. I’ve really been in the merchandising

space ever since and have always been in women’s apparel and most recently accessories and footwear. In my

latest role over the past 3-5 years I was SVP and then promoted to Chief Merchandising Officer over women’s

apparel, accessories and footwear. Included in that is also women’s golf and then also any special projects,

corporate sponsorships, brand partnerships, etc. I was responsible for overseeing the merchandising team and

leading all of our merchandising efforts and process and strategy and also in my role I was responsible for

creating brand strategy and executing that across all cross functional areas of the business, which would

include design, global merchandising, planning, sourcing, marketing and sales, and seeing the whole process

through the whole product life cycle.

[00:02:27]

Q: Could you give an overview of the premium apparel industry, focusing on women’s Ralph Lauren? What

are some of the key industry drivers and who are the top competitors? Are you aware of unique stark

differences across women’s and men’s?

BG: So, it’s been, I have to say in my opinion, a tough space. I have been seeing it become more and more

bifurcated where luxury at the top of the industry, those players and those brands and their rich history are

here to stay. Then, in the middle, you have the bridge and the contemporary and the better markets which is

where women’s Polo and even women’s more in would sit. Then, at the foundation of that you have the outlet

and some of those more mass retailers like the Targets and the Walmarts. I have seen through my experience

the business either going to luxury or going down and entering into the outlet position, really taking market

share and again, like I said, some of the retail space and the Targets, the Walmarts and the Costcos of the

world in that segment really growing. So, in a way, I’ve always felt like this sort of middle ground was a tough

space. We’re in a very competitive landscape right now where a lot of emerging brands, the point of entry into

the industry, is easier and the competition is fierce. So, from my experience at Ralph Lauren you have to really

stand out and be maniacal about your products and your marketing and the way that you’re showing up to the

customer. Like I said, there is competitive space. We were looking, and again women’s Polo is a global brand,

so globally just in terms of maybe other competition that either shared brand codes that we had but also

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brands that were just getting a lot of attention and gaining a lot of traction in the market we would obviously

look at what they’re best in class in and what they’re doing.

I can give you some examples of like the Vinces and the (? 05.10) of the world that definitely, over the years,

have proven to be competition in these sort of wardrobe essentials. I would put Tory Burch into also

competition for women’s Polo because of this sort of preppy lifestyle in some of the brand codes and the

consumer that is attracted to Tory. Rag & Bone for sportswear and denim. Then, you have some European

plays that are really big in Europe and have really begun to get a pretty large presence in the US and those

brands, for example, would be like Homage or a Sandro. So, you see them really as you go to some of our

competition in terms retail space and the best positions on the floors in the department stores you see them

really gaining market share. Some honourable mentions I would say just over the past couple of years also,

contemporary brands like Veronica Beard. Then, there’s also these smaller, emerging brands, I sometimes call

them disruptor brands. I don’t know how long they’re here to stay. Brands like (? 06.26) or Ganni, Nanushka,

these are Scandinavian brands. They’re small but they have a real presence and they are taking market share

from our customer.

[00:06:40]

Q: How would you compare premium apparel industry trends pre- and post-pandemic? Have they

exacerbated amid the coronavirus?

BG: Some of the trends that we were seeing in the market pre-COVID we were already seeing a more casual

sensibility in terms of graphic tees and fleece in a more casual sensibility, a lot of logos. Again, some of that

was a trend that was coming down from luxury and hitting into our market segment. I think a lot of that just

accelerated even more as we got into COVID because, obviously, there was such a pivot to comfort. Everyone

was at home and so you saw a real trend, anything that was happening in structured dressing, anything for

wear to work and more buttoned up. It was just becoming way more casual. Listen, there was some parts of

the business which already, pre-COVID within the industry, like I said graphic tees, fleece, denim, also pre-

COVID not only denim jeans but denim dressing has been one of the top trends for a while and the obviously

within that various fits and various washes but that took a bit of a hit too because people weren’t sitting

around their house in denim jeans necessarily. Listen, that market will start to come back for sure as the world

re-emerges but that’s a good example of one that didn’t accelerate going into COVID. Obviously, trends in

terms of ultra feminine, florals, ruffles, puff sleeves, definitely seeing that across our competition for sure. I

think that also slowed down a bit because there was just this dramatic turn to, again, comfort. It’s not like

women were necessarily wearing dresses in the house. If they were, they were more fleece or knit, they weren’t

soft dresses. So, that would just be some of my examples of what was happening pre-COVID. Then, when

COVID hit some of that again evolved and then some of it really fell off for a while.

[00:09:41]

Q: Could you give a high-level overview of Ralph Lauren and the categories it operates in? How might that

break down geographically?

BG: So, it’s definitely public information that Ralph Lauren is a USD 6bn company. It’s a global brand and it’s

a global lifestyle brand. Therefore Ralph has many different categories. Men’s, women’s, kids, home, footwear

and accessories and then jewellery, perfume, swim, scarves, and some of those businesses are licensed. It’s a

global business so all over the world. So, North America, which it’s no secret is its biggest region, followed by

Europe and Asia and South America. I mean, it’s a global brand and it’s a powerhouse.

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[00:10:59]

Q: What do you think is Ralph Lauren’s bread and butter? How did the focus shift to accessories from apparel

over the many years you were there?

BG: Yes, so the bread and butter is without a doubt Polo brands. Men’s, women’s and kids. You’ve got men’s

really driving that but kids has had a really profitable business. Women’s has been growing tremendously as

well. So, the Polo brands are really the fuel behind that. It’s also no secret that we’re very successful with our

outlet stores, with factory outlet stores.

[00:12:00]

Q: How has Ralph Lauren shifted the focus of its investment capital from women’s apparel to women’s

accessories or women’s sportswear and then to casual clothing? How have consumers shifted their spend

across categories?

BG: Thank you for repeating that. I remember you had brought up accessories and footwear. Accessories and

footwear has been a categories that Ralph has really tried for a long time to gain market share and really grow

that business. It has a ton, a ton of potential based on the market landscape. What’s interesting about Ralph

Lauren is he is an apparel first company. Especially if you look at the luxury space, most of the competition is

an accessories and footwear led business and apparel comes second. So, it’s interesting that Ralph’s is the

inverse of that. He leads with apparel. Throughout the years we have really tried to make a strong entry into

that world but it’s a very competitive space and also as a company I think when they’re looking at it to, and this

again is just from my opinion, the stores are only so big. Spaces at wholesale are only so big. So, how are you

going and are you ready to take space in our own Ralph Lauren stores for example, take space away from

apparel to give accessories, whether it’s luxury accessories and footwear, whether it’s Polo accessories and

footwear, are you willing to take apparel out of some of the stores and take back that space in order to give

accessories more of a lead in that store. I think that’s been one of the questions over the years is if we’re really

ready to do that. I think also this stance from where I’m sitting and the way I feel is you want to make sure that

you’re completely ready. So, is everything about your product amazing? So, great quality, great fit, at the right

price. I think they still struggle with that a bit. So, while I think it’s an opportunity it’s still one that has been a

challenge to get off the ground per se but there definitely is some traction. There’s been a lot of success with

certain bags and footwear within the collection and the women’s Polo business so they are making traction but

I just don’t think it’s happening quick enough.

[00:15:37]

Q: How has Ralph Lauren performed in and adjusted to the global pandemic? What tough decisions might it

have had to make to continue running smoothly?

BG: Yes, so I mean obviously it has really impacted the business across the board. I mean, I could speak for

myself. My role was impacted this past year because of a major restructure and it’s also public information if

you read any of the transcripts that there was a major focus on the approach to merchandising and the

merchandising structure. So, there has been over the past five years I would say they’ve been making a lot of

changes to the organisation and flattening the organisation, if you will, so that all started when Stefan Larsson

entered the company about five years ago. He was there for about a year and a half and then Patrice Louvet

has been there for I think about three years now. So, there were efforts to flatten the organisation but again

because of COVID, like many companies, they were forced to furlough and re-look at expenses and

organisation so there were many roles that were impacted, for sure. Then, within the company I would say,

listen, they’ve had to do some real pivots, I would say, in terms of categories. Some of those categories are

going to get hit harder than others. In some categories it really opens up this kind of opportunity. For example,

in men’s, working from home men aren’t wearing suits. They’re not wearing ties. So, obviously the tailored

clothing industry, and that’s such a big part of what Ralph does, that’s going to have an impact. On the inverse

of that you hope that you’re going to make up some of that with now men pivoting to a different category. So,

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maybe that’s a more casual way of dressing or maybe that was sweatpants or chinos and lightweight sweaters

or something that was just more comfortable.

Then, also, even in kids because when COVID hit there was a lot of impact also on, and I have two children

myself and I saw that, listen, I didn’t need to invest in any more uniform dressing and don’t forget Ralph

Lauren has endless amounts of Polo shirts and khakis and they’re probably supplying the uniform across every

category for the world. There is also in kids there was no more activities, everything sort of shut down. So, I

didn’t need to buy as much. Then, you think about home and again this is no secret that the home sector

totally took off. So, as everyone is nesting in their house and spending time in their house they’re shopping

and they’re looking to buy refresh on a lot of things, whether they’re doing home improvement or whether

they’re looking for towels, new sheets, casual serving ware, whatever it may be. Ralph happens to have a

successful home business, but my guess is that they weren’t completely prepared for the demand that there

would be. I’m sure they did great but they probably could have done more and they weren’t prepared for that

demand. Again, that’s just my guess.

[00:19:48]

Q: Did Ralph Lauren experience declines across all categories and every geographic location? You mentioned

areas such as home potentially making up for some of the slack experienced elsewhere. What are your

thoughts on regions such as China potentially picking up slack experienced in other geographies?

BG: Yes. They definitely did. They definitely did. I mean, we dealt with a global pandemic. In terms of

recovery, I will tell you that Asia was the quickest to come back and because the pandemic really started with

them even in 2019 as they were able to get everything under control their business did not suffer as much as I

think one would have thought. They were actually still able to sustain their business. Europe had a really tough

time. I mean, as you know many parts of Europe, they were opening, they were closing. Then, some of our

biggest markets had to remain, the UK had to be and France, they remained shut down. So, it was really tough.

Then, North America I would say, listen, that’s been a challenge to. Mostly because, listen, people weren’t

going in stores. So, you saw the shift to e-comm. The e-comm business completely took off. It was already a

really, really strong business and it only got stronger. North America, listen I felt fortunate because in

women’s Polo it had a very even distribution geographically. So, across the region, across channel, women’s

Polo had a very balanced distribution. It’s not a secret that for men’s and kids a lot of their distribution is

heavily invested in North America and specifically in department stores. So, you have department stores like

the Macy’s and the Dillard’s and the Bloomingdale’s of the world. When the pandemic hit that was a big hit.

Those stores were obviously trying to cancel orders, trying to save their businesses. Some of those businesses

were going through bankruptcy, almost bankrupt. I mean, it was a really hard time. So, even though North

America is still the strongest demographic, I mean it definitely suffered, but you saw the biggest recovery

really still coming out of Asia the quickest for sure.

[00:22:51]

Q: You mentioned men’s is leading the way in Ralph Lauren. Would you say women’s or children’s is second

largest?

BG: Children’s. It’s men’s then children’s then, it’s men’s Polo, children’s Polo, women’s Polo and then

women’s Lauren.

[00:23:21]

Q: What struggles has Ralph Lauren faced when trying to expand into women’s polo?

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BG: It’s a really good question. It’s probably my favourite question so far. So, it’s interesting when Stefan

started at the company he created a way forward plan and Patrice has definitely still continued on with that

plan, it’s now called the next great chapter. Part of that was winning over a new generation of customers. I

think that was something that in women’s Polo Ralph Lauren has brand equity. It has a lot of market share,

but there are brands perceptions that in my role in charge of women’s I knew I was going to have to change.

So, because Polo almost feels like it’s under the men’s umbrella, men’s Polo is such a huge machine and

business and there’s a lot of similar products, a lot of core products that overlap. So, the mesh shirt, cable

sweaters, great woven Oxford button downs, some of the most, I will call them, the crown jewels. They’re

amazing. They’re the foundation and the icons of Ralph Lauren. There’s definitely a masculine connotation

that comes with the brand that we always had to work extra hard on the juxtaposition of that and really

making sure that there was always a presence of feminine that the customer very much wanted. We were

known for tailored clothing. We were known for this amazing, how would I describe it, amazing suits and a

tailored way of dressing but the feminine side was the piece, and I had mentioned this when we were talking

about some of the trends pre-COVID and a lot of the competition, they’re very feminine. Women want to feel

sexy and they want to feel good about themselves. We had to work extra hard at making sure that we were

getting that feminine aspect in. I think also we were changing the brand perception to capture a new and a

younger customer. Kids that might have grown up with… The brand has wide appeal.

So, it has bandwidth. So, it’s going to appeal to and can appeal to the daughter, the mother, the grandmother. I

always hated to talk about age. I always felt like it’s about a sense of self and style and who am I to say that a

75-year-old woman can’t wear this navy blue blazer? Of course she can. So can my mom, and so can the

daughter. You know what? They’ll all wear it in a different way. So, that’s what I always loved about the brands

and always knew it had a bandwidth. Sometimes I think the younger consumer can look and think, oh Ralph

Lauren, it’s such a preppy brand it’s not for me, or they just think of it as a certain way. Listen, some of that

has to do with the marketing. Some of that has to do with the stores. We really needed to pivot the strategy to

start styling things in a different way and in order to change the perception, or not even always change the

perception but just start to gain more customers we needed them to notice Ralph in a different way. That’s

why were so on a mission to get in, I mean, this Polo was a quiet brand. It was mostly DTC in North America.

We were in Saks but we just recently went into Bloomingdale’s and into Neiman Marcus and Nordstrom and

that’s great presence for us. So, we need to show up. We need to make sure that new customers are seeing us

and that they’re noticing us. We also need to make sure that we’re showing up in a strong way too. You don’t

want to get out into all those stores and then not show up great. So, it’s been interesting. I am proud to say that

women’s Polo has continued to grow so even during COVID, but pre-COVID there was an amazing trajectory

there and they were continuing to just grow and grow and almost as much as kids, I have to be honest. We

were on an amazing trajectory.

[00:28:51]

Q: When do you think Ralph Lauren’s management team realised it was missing a complete women’s

demographic or consumer and decided to start prioritising assets and resources to innovate in this category

and spend capital to invent the brand?

BG: Probably, listen I think some of it came from the leadership but also it came from Ralph. He’s such a

visionary and actually women’s Polo used to be women’s blue label. So, I would think now it’s probably about

eight years ago that it rebranded from women’s blue label to women’s Polo. At that point Ralph said I’m going

to open this up because the strength that I have in Polo and the name Polo and the family or brands with

men’s and kids it just makes so much sense to pull women’s into that. All the success that I’ve seen from the

men’s and the children’s category is we should be expanding on that in women’s and have the bandwidth to do

that. It’s interesting because men’s has the ability to sell at almost every store. If you think about the fact that

it could be at Macy’s with a specific assortment and it could be at Saks Fifth Avenue with a different

assortment. Those two stores are very different. Most are going to say obviously Saks is a much more elevated

distribution, but the line has the bandwidth to do that and that’s very much the benefit when we rebranded it

from women’s blue label to Polo it just opened up that door to have the bandwidth to be able to curate

assortments for all different types of distribution. There’s really no barriers of entry and it’s, the sky is the

limit, in my opinion.

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NH: I believe Rugby was part of that assortment. Am I correct in that?

BG: Yes.

[00:31:29]

Q: I believe Ralph Lauren shut down its Rugby brand. Why do you think it decided to do that?

BG: They did. I don’t know all the details on it. I remember, because I didn’t work on Rugby but Rugby, we

had two free-standing stores and then it was sold exclusively at Macy’s. Rugby had a very specific look. I also

think, I don’t know what year that they closed it, but I would also say what was starting to happen too, and I

felt this internally and it’s why It think that we really landed in a good spot is that all of the brands in women’s

were starting to touch on each other’s toes. I think it’s very important that you have a clear brand strategy

customer codes of who you are and what you want to stand for within the brand and then the distribution that

goes along with that. When you look at Rugby, Lauren, women’s Polo, there was black label at one time and

collection and they took black label and they worked it into collection and called that all luxury. So, it was very

difficult at that time to grow all of those businesses where they all share at the foundation of them, I keep on

calling them codes, but they are. Within Ralph’s world they all, maybe Rugby felt more collegiate and youthful

but then it doesn’t mean that in women’s Polo I couldn’t have a Rugby one season or a cricket jacket or an

amazing jacket with a crest. Maybe slightly different price points but if I wanted to grow women’s Polo and

then Rugby is in that distribution or Lauren is in that distribution you really have to be clear on your

customer, on your strategy, on the price point and the distribution. Once you get, I could tell you in New York,

fine, they could be on different floors, it’s not an issue. That’s just New York. Once you start to go to stores that

are outside New York the stores are much smaller. Then, they might only be one or two floors in a department

store. It’s not going to be eight floors like Macy’s Herald Square or Bloomingdale’s. So, then, you’re like, okay,

then is Rugby sitting next to Polo and then Polo is across from Lauren? It’s just a low and I think they realise

that it was a clear brand strategy to land where we landed with the women’s brand. I think it was smart. I think

it was a hard decision, but I think it was smart.

NH: I remember the Rugby brand from quite a few years ago and that it was very popular among some

younger consumers.

BG: It was.

[00:35:05]

Q: How do players such as Ralph Lauren handle consumer fallout when they decide to end a brand, perhaps

for distribution or cost reasons? Is there typically consumer feedback questioning what happened to the

brand? What might stop a consumer from switching to other luxury women’s brands?

BG: So, I think a couple things. I think Ralph and the team are optimistic that when they make a decision like

shutting down Rugby that they are very strategic. They’re going to look at what really drove the business at the

end of the day in Rugby? What was that? So, in men’s was it the denim that was really, at the end of the day,

driving the business? In women’s, was it the floral dresses that were driving the business and the Rugby

dresses? I’m sort of making some of this up as an example. What they’ll want to do is look at women’s Polo

which shared some overlap in terms of price architecture and they will want to make sure that we’re capturing

some of that. Women’s Polo, you can buy a pair of denim jeans for USD 125. So, there are points of entry and

Polo shirts that can start at USD 88. There’s definitely points of entry and they’ll look to make sure that they

can anniversary or at least maximise what was working in those brands within Polo brands. They know, we all

know, that there is a ton of opportunity as we look to capture a younger consumer. I think the company has

done a really, really good job at appealing to a younger customer. Just a few examples of while we’re trying to

change the brand perception I can give you a couple of examples of some distribution and some special

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products, limited editions and collaborations that we’re done with people like Urban Outfitters, ASOS,

Zalando and they have a strong demographic in the younger consumer. A lot of the appeal in those

assortments was coming out of t-shirts, fleece, these sort of quote unquote, original, products that Ralph is

known for and really playing up the polo player in a cool way and cool fits. So, really working on that cool

factor to attract that younger consumer is definitely a big focus for the company.

[00:38:50]

Q: What key challenges or inefficiencies did Ralph Lauren’s turnaround plan hope to address over the last few

years? You have mentioned quite a few challenges, but what do you think was most important about the

planning?

BG: First I just have to say I think the turnaround effort from the company (audio distorts 39.39), and I had

mentioned earlier that Stefan came to the company about five years ago. Stefan Larsson. I have huge respect

for him. I had mentioned he created the way forward plan. It was the first time that the company had this

strategy that was completely transparent, advertised and repeated to the corporation, so not only internally

but also to the street. So, every quarterly meeting that we may have had, every strategy that each brand

created, all derived from the way forward plan. Then, when Patrice came he really took, he did not look to

disrupt. So, he agreed with the way forward plan, sort of repackaged it a bit and it’s called the next great

chapter now with him coming on board. There were five priorities for the company. I mentioned to win over a

new generation was one of them. Also, leveraging core products and accelerating any high potential,

underdeveloped categories. Driving targeted expansion. So, that could be through distribution, through

various channels, leading with digital. Then, operating with discipline to fuel growth. So, listen, some of those,

leading with digital, that got completely accelerated this year. They continue to invest a ton in, I shouldn’t say

a ton, I don’t really know, but their priorities in terms of investment are around innovation and moving

forward and what that looks like. So, it could be digitalisations, 3D, working on the e-comm platform, looking

at our marketing assets, where are our customers shopping? Where are the going? Where are they looking?

Are they on Instagram? Are they still on Facebook? Is everyone using a Bitmoji? Everyone’s TikToking. You

know, that’s the younger generation.

So, sustainability and efforts around sustainability. I mean, that’s really where the priorities lie and where I

believe a lot of the resources are being allocated to. All that said, with all the effort that I know has gone

behind this and me being a part of that, especially over the past three years, I can tell you on the other side,

listen, it can be a challenge. There could be still challenges internally because it’s still a big company. There’s

still maybe multiple decision makers who are trying to figure out who ultimately the decision maker is. That

stops you from being as nimble and speedy as you would like. I have still seen a tremendous amount of

progress. While it still could remain an issue, there’s been a tremendous amount of progress and it is better

than it was 10 years ago. I give the company a ton of credit for that and the team members. Then, I think

there’s other issues too. There’s headwinds that are not internal, they’re just happening. Even separate from

COVID. It could just be economy based. It could be Brexit. It could be political issues. It could be, oh my god

I’m trying to think, like what’s happening in North America with department stores. There’s all different

things that could be happening regionally that they’re headwinds that they’re challenged with. There’s some

that are internal and there’s some that are external.

[00:44:10]

Q: There’s no doubt about Ralph Lauren’s brand equity, despite its financial challenges, as you mentioned.

Young consumers – in a generation that moves quickly across brands – still assess Ralph Lauren as a premium

and high quality. How has Ralph Lauren preserved its premium brand image and brand equity, while the

brand equity of other brands that are as old as Ralph Lauren’s has diluted?

BG: I know, it’s a good question. I mean, it’s probably one of the reasons why I was there for so long and so

loyal to the company. Ralph is amazing. He is such a visionary and he is an unbelievable story teller. He’s

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unbelievable at making people dream. It’s an aspirational brand and he has been able to keep that alive. I

mean, I don’t know any other brands that be successful also in all these segments. It’s amazing that he could

be so successful in his own right in luxury and premium brands and then also successful in an outlet division. I

mean, the span in which he is able to do that is kind of amazing. I think, I don’t know. I wish I had the answer

to that question. I wish I knew. I feel like it’s like magic. I don’t know that I could tell you otherwise there

would be a lot more of them. It’s just that he’s an unbelievable brander. He basically created one of the

strongest brands in the world. Also, he has been able to create one of the strongest logos in the world. If you

think about the Polo player and you think about the brand equity that goes into that, I mean, he is one, if not

the most recognisable logo in the world. People wish that they had that. Brands wish they had that. Nike has it.

Nike has this wish. It’s like that. I mean, it’s unbelievable. You have to take care of that. When you have

something like that Polo player it’s easy to just put it on everything. We don’t. We are very specific about what

that goes on. We nurture it and we take care of it. You have to. Sometimes you have to show restraint. I mean,

it has certainly helped to continue and will for a long time will be his legacy. It’s unbelievable.

[00:47:35]

Q: What do you think Ralph Lauren’s appetite for an acquisition might be, perhaps of a younger or trendier

brand with aligned values, considering its soft SKU and how it is marketing and presenting itself? Is there

opportunity for Ralph Lauren to buy a smaller brand, rather than focusing on innovating? You mentioned

many brands earlier – which would you say fits best with Ralph Lauren?

BG: Oh my god. Well, to answer your question, I really have no idea. Ralph acquired Club Monaco many,

many, many, many years ago. I’m not really privy to the information there but my gut is it hasn’t been a home

run. I don’t know if that example would be a best practice or an experience he would want to go through again,

I’m not really sure. I don’t know if Ralph, again, I can’t speak for him. I don’t know if he feels that that’s

necessary. I think the company really feels that in a way those smaller companies would need Ralph more than

it would need them. Does that make sense? That’s just my gut.

NH: With Ralph Lauren being much more of a conservative company, that makes a lot of sense.

BG: I think they rather internally or bring in the talent in the leadership, and the resources to figure out how

to do it themselves. Ralph has come a long way in terms of evolving. Obviously been at the company for a long

time and I have seen so much change and evolution, not only within the company but also with Ralph and

changes and he has trusted leadership and partners and people at the company. Obviously, he reads and he

knows where the world is headed. So, sometimes he may not be following that or doing it as quick but

sometimes I really I go back to think thank god his heels are on the floor. If you go too quick, it might be too

dangerous. I think he is evolving and he’s doing all the things right. Some things may take longer than others

but this is a brand that is going to be able to stand the test of time. It has proven that already in, I think, 53

years and it’s still, at it’s highest maybe was at USD 7.5bn, which again is public information. Some of that, I

can’t say that all of that has been lost because of products. Some of that just, again, may have been lost because

of what’s happening regionally with some of Northrop department stores and the wholesales. That has

changed so much. Wholesalers used to control so much and now it’s moved to DTC. So, we’ll see. We’ll see. I

don’t know. I don’t that he would acquire, I really don’t know. I don’t even know what brand that would even

be. I mean, obviously there’s brands that are like-minded. I’m trying to think of examples for you. Like a

Vineyard Vines or, I don’t know how useful their customer is. I’m trying to think of some, JCrew has taken

obviously brand codes from Ralph. It’s a very preppy, but, I don’t know.

[00:52:34]

Q: You mentioned the distribution landscape shifting towards D2C, from wholesalers controlling this. Could

you expand on that evolution and how quickly Ralph Lauren has been able to adapt to this given its important

relationships with large players such as Macy’s?

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BG: Yes, I mean, I think that the company has felt the impact of the shift of wholesale, from wholesale to DTC.

Ralph is not the only one in that boat, for sure. For a long time most of Ralph’s competition and some of these

larger companies have always relied on wholesale. That was how the business was done. So, these major

department stores, I mean, in some ways they could really control the success of your business. So, how much

they were buying from you, you had relationships with those stores, you had agreements with those stores.

You were getting selling data from those stores but you were at the mercy of those buyers and DMNs and

GMNs and presidents and, listen, they would buy your line according to what they thought, and the kind of

store that they are and who they believe their customer is. You lose control. You start to lose control over that.

Ralph had a really, obviously a good relationship and all the major department stores, and not only in North

America. In Europe and Asia too we’re in a lot of the department stores. I think you learned very quickly as

you saw the pivot and the changes in the industry with so much starting, and even this is pre-COVID. I mean,

I’ve mentioned this before, that you were starting to see a shift, whether that was to e-comm platforms and

their own stores. Then, the consumers were just through the power of social media and being targeted by so

much competition and new brands. So, it’s been tough, for sure, but the focus is definitely on DTC and it’s

definitely on e-comm and the hope would be that there’s more of a balance and that you’re not so invested in

department stores. I think anyone feels that way about their portfolio. If you’re too invested in one aspect and

something happens you can be caught in a lot of trouble. So, they’re definitely working on accelerating their

digital efforts and probably reassessing their existing stores. I’m not really sure. They’ll make the shift. They’ll

be okay.

[00:56:24]

Q: How has Ralph Lauren committed to ESG issues and approached supply chain material sourcing, which

are commonly overlooked? Do you think it needs to get ahead of these over the next 6-24 months? Does the

company source any materials from countries with flags? Brands such as H&M have struggled and have made

political missteps with labour issues in China.

BG: Yes, the company has an amazing head of the supply chain. It’s someone that Stefan had brought in about

five years ago. I have so much respect and have seen so much evolution in terms of not only the sourcing

strategy and what that landscape looks like but also the way that Ralph approaches a few things. So, obviously

the relationships with those vendors, everyone is extremely, extremely vetted. I don’t know what happens with

H&M but I feel very confident in saying that, I mean, listen, anything could happen I guess but I mean in my

experience there the vetting process is pretty extreme and we have people all over the world that would be

checking all of that and all of that oversights. So, I feel really confident in saying that. Ralph has also made a

ton of progress in terms of the way that not only we’re sourcing the materials, we’re platforming ahead of time

to react to speed to market, there’s a digitalisation component and 3D that has helped tremendously in terms

of communication, saving time, resources, saving money. It’s a huge priority for the company. I think it’s

evolved really, really fast and at a strong pace over the years. Their sustainability efforts, it’s a priority for sure.

[00:59:50]

NH: Wonderful. We will now end the Interview there. Let me close by saying thank you for your input,

Brooke. I really do appreciate it. It was great to learn more about Ralph Lauren and how they’re tackling some

of the different challenges at the firm. I also want to thank the clients for joining Third Bridge Forum’s

Interview today. Goodbye.

BG: Thank you.

Transcription ends at 01:00:14 of the recorded material

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