Ralph Lauren posts quarterly loss a day after naming new CEO

Jay Anderson
May 19, 2017

Ralph Lauren Corporation announced that Patrice Louvet has been named president and chief executive officer.

Louvet is expected to officially take the reins and embark on an ambitious turnaround strategy on July 17 when he will report to the company's namesake founder, who is reportedly maintaining a key role as executive chairman. Every company has said it and nearly every investor knows it. Ralph Lauren (RL) knows the struggles all too well, given that the stock is down 20% on the year and disappointing 55% over the past five years.

At Proctor & Gamble, French-born Louvet ran the $11-billion global beauty business and guided the sale of part of that division to Coty Inc. past year.

He also previously served as President of P&G's Global Prestige business where he oversaw a diverse portfolio of 23 fashion brands, including Gucci and Hugo Boss.

That lack of clothing experience doesn't seem to bother company founder Ralph Lauren, who stressed the importance of "finding the right partner" for him to work with. Retail revenue in the fourth quarter fell 16 percent, driven by a decline in revenue at established stores that were hurt by weak customer traffic and a lower average transaction total.

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Louvet will also have to navigate Lauren's interventions when he takes Larsson's place in two months' time.

The company has been trying to reduce costs by cutting jobs and shuttering stores, including its flagship Fifth Avenue store in NY.

Ralph Lauren announced Wednesday the appointment of Patrice Louvet, a French executive from the beauty world, as chief executive officer, more than three months after signalling the departure of his predecessor over disagreements. Telsey Advisory Group downgraded Ralph Lauren Corp from an "outperform" rating to a "market perform" rating and set a $110.00 price objective for the company.in a research report on Thursday, February 2nd. But Larsson announced in February that he would leave after less than two years, after he and Lauren clashed over creative control.

In the announcement about Louvet, Lauren cited his collaborative working style. The shares fell 1.6 percent to close at $72.75 in NY trading Wednesday. Over the past year, inventory was down 30 percent and the number of items was down 20 percent for the spring and fall 2017 seasons. The firm had revenue of $1.57 billion during the quarter, compared to the consensus estimate of $1.56 billion.

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