Polo Ralph Lauren Executive Summary.
Ralph Lauren is one of fashions leading retailers, who has had great success in creating great demand for their clothing line. In 2003 the fashion industry struggled with the plummeting economy, and a major concern was cutting costs while gaining productivity. Polo Ralph Lauren also felt the economic pressures, the company was able to compensate by targeting European and Japanese markets. According to Polo Ralph Lauren, in terms of growth strategies, “We have a global retail initiative that includes selectively opening new stores and acquiring licensed stores in key markets.” Another key strategy is to continue expanding products to new markets. This is the most important key for this companies futuristically success. The third strategy for growth is the need to improve operational efficiency, in terms of management and organizational components. This will allow Polo Ralph Lauren to create an increased functionality in the company. The company has already set out to do this by creating a centralized headquarters in Switzerland instead of setting up 5 headquarters internationally. The final key for growth is acquiring “direct ownership of those businesses where our expertise and competencies provide the highest value, while continuing to seek new licensing partnerships where appropriate”. With these goals for growth set before Polo Ralph Lauren the company will gain a great momentum heading into Fiscal Year 2004 and 2005
New York, NY 10022
• Date of latest Fiscal Year: March 29, 2003
• Polo Ralph Lauren sets the latest trends in clothing fashion, fragrance, and home decor
• Geographic Locations: U.S, E.U, Japan
Polo Ralph LaurenIndustry Situation and Company Plans
Bases on Polo Ralph Lauren’s three-year analysis, it seems the company has increased dramatically insales since Fiscal Year 2001. Reasons for this include targeting markets in Japan and Europe, and the virtual Ralph Lauren website. Both changes have allowed the company to target great audiences with their products.
Ralph Lauren has had some setbacks. For Fiscal Year 2003, a serious lawsuit against Ralph Lauren has created problems
Futuristically, Polo Ralph Lauren plans to continue developing European and Japanese markets through a process of consolidating the company from having “5 international headquarters in 3 countries into one central European headquarters in Geneva, Switzerland”. In order to effectively centralize the International front, Ralph Lauren plans to upgrade the information support systems already in place to be more efficient and effective. Ralph Lauren expects successful long-term growth from these strategies.
Another avenue for growth is in fashion. This year, traditional tailored suits will be the latest trend in the fashion industry. This is one of Ralph Lauren’s specialties. Sales are expected to rise in all quarters as a result. Also, Polo Ralph Lauren recently launched “a heritage-inspired collection with a weekend influence. The new line has exceeded expectations, domestically and internationally”.
Shows Current Assets exceeds Current Liabilities
Measures short-term debt paying ability
Measures relative size of Accounts Receivable and effectiveness of Credit Policies
Measures the number of days to collect Receivables
Measures the size of Inventory
Measures the number of days taken to sell Inventory
Measures Net Income produced by each dollar of sales
How efficient assets are used to produce sales
Measure of overall Profitability
Measure of profitability of Investments by the Stock Holders
Measure of capital structure and leverage. Polo Ralph Lauren is mostly run by Stockholders not Creditors.
Measures Investors confidence in a company
Measures a stock’s current return to an investor through dividends
By: Josie Ghosal
Financial Accounting 2021