Ralph Lauren has decided to step down from the post of CEO of his namesake company. The legendary designer has chosen Stefan Larsson as his replacement.
One of fashion world’s most influential names, Ralph Lauren, is now handing over the reins of the company that bears his name to Stefan Larsson, the global president of the Old Navy chain. It’s certainly interesting to see Lauren asking Larsson to take charge, considering the different approaches and target markets the two companies have.
Stefan Larsson was global president of Old Navy for three years, heading a hugely successful subsidiary of another big name in fashion, Gap. Interestingly, Ralph Lauren stands for premium fashion. Its products always come with a hefty price-tag. On the other hand, Old Navy has always stood for affordable fashion and casual wear that doesn’t necessarily pinch the wallet.
Prior to heading Old Navy, Larsson was part of an executive team at Swedish fashion chain H&M. In the 15 years he worked there, Larsson substantially increased the revenue of the company. It was $3 billion annually when Larsson started working, but when he left, the company’s revenue stood at $17 billion. The company’s presence, too, increased vastly. During Larsson’s tenure, H&M’s operations grew to 44 countries from mere 12, reported Hindustan Times. Incidentally, H&M also offers affordable fashion.
Industry insiders are speculating that the major reshuffle in Ralph Lauren is owing to the company’s struggle against a strong dollar, greater competition and slipping share price. Ralph Lauren (the company) is rumored to be consolidating its finances to stay strong during the present economy. Incidentally, Ralph Lauren did report a 5.3 percent drop in revenue from June 2014 to June 2015.
However, the appointment of Stefan Larsson may have more to it than what meets the eye. First, Ralph Lauren has merely stepped down from the CEO post. He has confirmed that he won’t be leaving the company he so painstakingly and successfully built over the years. Lauren added that Larsson will be reporting to him and that his relationship with the new CEO will be more along the lines of a “partnership” rather than that of a new employee entrusted with bolstering the company, financially and otherwise. Lauren will be part of the team as the company has carved new roles of executive chairman and chief creative officer.
Ralph Lauren further clarified that he isn’t “stepping back” and added that he would quit, “when they start designing things I can’t understand.”
“I am here, and I am not leaving. Stefan is coming to the company because I really believe he’s going to be an interesting addition.”
It seems Lauren picked Larsson for his ability to expand businesses beyond their core competencies and in foreign regions. It is important to note that about a third of Ralph Lauren’s business happens outside of the United States. Given Larsson’s ability to expand the presence of business, Ralph Lauren could be planning to go beyond traditional markets and experiment in newer avenues.
Interestingly, this plan may hold true for the products that Ralph Lauren makes. Given his expertise in enhancing the sale of affordable apparel, Ralph Lauren might start targeting this segment as well. The company has traditionally appealed to people with deep pockets, but Larsson could extend the appeal to those looking for affordable fashion too.
Lauren did add that he chose Larsson to head his company because, “he was a good businessman, but more importantly they shared a common vision.”
“He understands what dreams are. In this business, it’s about dreams because you are dreaming ahead and you’re about progress and change and newness.”
[Image Credit | Dimitrios Kambouris, Mike Coppola, Spencer Platt / Getty Images]