Three months after Stefan Larsson announced he would step down as CEO of Ralph Lauren, the luxury brand has named a replacement. Former Proctor & Gamble exec Patrice Louvet will helm the role of President and CEO effective July 17, 2017.
Louvet also will join the retailer’s Board of Directors, where he will report to Executive Chairman and namesake founder Ralph Lauren.
The retailer has been suffering sales losses as more shoppers divert their spending away from luxury brands; the company’s 2017 revenue dipped 10% to $6.7 billion. In total, wholesale and retail sales dropped 15% and 6% respectively. The company’s overall performance was abysmal in Q4, as retail revenue plummeted 16% to $745 million. The outlook for fiscal 2018 doesn’t appear to be much better, with net revenue expected to decrease 8% to 9%.
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Under Louvet, Ralph Lauren will continue operating its Way Forward cost savings plan, in which the retailer aims to save approximately $180 million to $220 million per year by streamlining the organizational structure and reducing the real estate portfolio. As part of the plan, in Q4 2016 Ralph Lauren:
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Lowered inventory levels by 30% to improve inventory turns;
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Reduced the number of SKUs by 20% for both Spring and Fall, in a move designed to increase SKU productivity and produce a more focused, higher margin assortment;
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Reduced manufacturing-to-availability lead times. The retailer has 50% of its products on a nine-month lead time, and remains on track to get to 90% by the end of Fiscal 2018; and
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Closed another 20 underperforming stores.
“Finding the right partner to work with me to take us forward in our evolution has been my primary focus over the last several months and I am thrilled that Patrice is joining our talented team,” Lauren said in a statement. “He’s an enormously skilled business leader with a deep passion for the consumer and a sophisticated understanding of building global brands. This, combined with his collaborative working style, transformation experience and intense focus on results, will put us in a stronger position as we move toward the future.”
Collaboration will be a major factor in whether Louvet’s tenure at Ralph Lauren is successful. Stefan Larsson had taken over the CEO spot from Lauren in November 2015 upon the founder’s retirement, but the tenure was short-lived. Larsson often had conflicting views with Lauren regarding the creative and customer-facing directions of the company before the two came to a mutual decision that he would depart on May 1, 2017. Chief Financial Officer Jane Nielsen served as interim chief during the search.
Louvet previously served as Group President of the Global Beauty division at P&G, which includes 12 brands — among them Pantene, Olay and Old Spice — representing approximately $11.5 billion in revenue in 2016. Louvet worked with P&G for more than 25 years in a range of leading positions that included Group President of Global Grooming at Gillette.
