A fashion icon of America is tanking. The stock of Ralph Lauren Corporation (NYSE: RL) is off more than 50 percent in the past five years. In recent days, it has also dropped precipitously. And now the CEO of the company, Stefan Larsson, has resigned, evidently over a dispute with founder Ralph Lauren himself about the control over creativity. Larsson came to the firm less than two years ago with previous experience in discount retailing at Old Navy and H&M and had attempted to rationalize operations by eliminating jobs and reducing infrastructure and layers of management.
As I have written earlier in these pages, other technical business factors have also been cited for the company’s decline. Examples are lack of focus — is it an Anglo-preppy haberdasher — or high-end retailer of household products; image confusion with various labels; and distribution through discount department stores that undermine an elitist cache. Not only that, now there is the reported conflict with Ralph Lauren himself over who should control the creative side of the company.
But the Wall Street analysts are missing a major phenomenon: We live in an era where grunge is deemed to be good: It is the new elegant. Like social media and electrons crossing borders at high speed, grunge has gone global. One has only to see it in the major airports of the world and on Oxford Street in London, Michigan Avenue in Chicago, and Fifth Avenue in New York.
The ascent of global grunge means that there is a basic problem with the elegant and high-priced image of Ralph Lauren products, which the world does not value as much anymore. Indeed, for many the gray hoodie has replaced the broadcloth striped button down shirt and pastel polo shirt. Torn, stressed jeans projecting a “poor little rich kid” look have superseded khakis and corduroys. The English lid-over attaché case has been replaced with multi-colored rucksacks of ballistic nylon, festooned with buckles and straps, with pockets for iPhones, laptops, Kleenex, and hydration systems — as if the wearer is about to assault Mount Everest or Kanchenjunga or at least the nearest glacier, bristling with helpful array. And the irony is that it’s OK, indeed cool, to drive a Maserati as long as you look really grubby and do so with bare feet.
But the globalization of grunge is not limited to appearance. Social media have become a channel for the instant expressions of vulgarity and hatred, going viral at near the speed of light, and parts of cyberspace are a giant septic tank where you travel at your own risk. The internet, with its advantage as a medium of efficiency and economic leveler, also brings with it a low cost, lowest common denominator approach to shopping — why seek quality when you can click a few times to spend the least?
It is by no means clear that Ralph Lauren can successfully address this global tidal wave of grunge. The brand conjures up images of English schoolboys at the Henley Royal Regatta on England’s Thames River and of preppy city slickers kitted out in Santa Fe gear, eager to launch a cattle drive through dusty arroyos and foggy gullies. It evokes images of croquet lawn parties with Pimm’s Cup, a drink with antecedents to the early 19th century also associated with the development of the British Raj in India — now served at Wimbledon and an integral part of the English season. And it brings to mind Cole Porter and the historical elegance of the Upper East Side of New York and the Hamptons.
None of these images are cool or in sync with those who are cool and like to sync up. Being cool now means being an introvert at Starbucks — faded jeans and grubby T-shirt, staring blankly into a monitor, fingers tapping in violent terpsichorean maneuvers, and equating Wikipedia with the wisdom of the ages. It means being a man of the people, yet ordering a pumpkin pie Frappuccino with whole-wheat cranberry pecan biscotti.
Alas, the brand of Ralph Lauren is under assault by seismic forces of the new fashion or whatever it is called. The arc of history, a term over-used by the Obama administration to justify its discredited progressivism, does not look to be friendly to the RL corporate enterprise. Unfortunately, the company needs to “dumb it down” if it is going to return to its prior successfulness. If it can make a gray hoodie that is worn at Henley, it may make the grade.