Ralph Lauren extends its commitment to e-commerce
Fiscal 2008 is a big year for expanding a commitment to the Internet and e-commerce, Ralph Lauren president and chief operating officer Roger Farah told Wall Street analysts on the company’s second quarter earnings call.
In March Ralph Lauren spent $43.7 million to acquire all of remaining shares of Ralph Lauren Media from ValueVision Media Inc. The company also expects to open a state-of-the-art e-commerce call center and customer service facility in Greensboro, NC, by next spring. “We made a very early commitment to the online business back in 2000, and we spent a couple of years really learning and investing in how that would operate,” Farah told analysts. “I think our desire to see that as a huge platform of the future speaks to why we bought the 50% back from our partner that we didn`t own.”
Today the web accounts only for about 4% of Ralph Lauren’s total revenue, but the Internet will play a big role in the company’s future. “There is no doubt that in future years people are going to get their information and make their decisions more off of various online communications, whether it’s a computer or a cell phone or any other media,” Farah told analysts. “We believe it is here to stay and we`ve got a running head start on that business, unlike any others who are now trying to get into it. We think it is an integral part of branding, communicating and doing business.”
In August, Ralph Lauren, No. 105 in the Internet Retailer Top 500 Guide, changed the name of its web site to RalphLauren.com from Polo.com. Though the company is only breaking out partial numbers, Ralph Lauren Corp. also grew its web sales by 28%, or $6 million, in the second quarter. “We are very proud six or seven years later of what that business has become,” he told analysts.
In the second quarter Ralph Lauren reported net income of $115 million on sales of $1.3 billion, compared with net income of $137 million on sales of $1.1 billion in Q2 of fiscal 2007.
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