patrice: what is exciting when you see what this company started, you see what it has

become. it has been driven by consistent vision and consistent purpose. francine: it started 56 years ago. today, ralph lauren is one of the world's most iconic fashion brands valued at more than a billion dollars with 500 stores around the globe. and the help of the chief executive that came into the job seven years ago with no present experience by retail luxury, attracting younger customers. patrice: when i started this job, i often got the question is ralph lauren still relevant, which is painful to listen to, but we had to some extent lost touch with the younger generation. francine: in this episode of leaders with lacqua i speak with patrice louvet and his plans to take the company back to its roots. thank you so much for joining us on bloomberg. patrice: happy to be here. francine: do you have the best over the world? patrice: pretty close. francine: what was the most surprising thing about your job

since you started? patrice: there are so many things. perhaps the thing that attracted me to this opportunity is the opportunity to work with ralph. this man is a visionary, incredible mentor, the opportunity to work with him and partner with him is special, and i cherish it every day. francine: you have to get along because he is still such a figure. he has his name on the door. patrice: he does have his name on the door. it all starts with his vision. where you see with the company started, it is all being driven by a consistent vision and consistent purpose. our purpose is to inspire the dream of a better life through authenticity and timeless style,

and that is but the driving force for the company now. we are all around the world. we are will be unties, we are in hospitality, coffee shops, minimizing his business, owned business but also still driven by a very consistent business ambition, and this is an industry about trends, and ralph says i hate fashion, because so comes and goes. we talk about time as an element of consistency. francine: what was it like the first time you met him? patrice: there was a moment that was incredibly special. i got a moment to see him in his ranch in colorado. right after i got the job. so that is probably the most iconic moment for me that i can also give you perspective on the first engagement, but we were in his ranch, we were outside, it is chilly, 8:00 in the morning next to the cookouts, and we are ahead and there is this beautiful mountain view and we are talking about what business

we're in? it was important to be together and have a consistent ambition, and we landed we are in the dreams business. ralph lauren, you are in the apparel business. you are a fashion company. we would disagree with that. francine: is he easy to work with? patrice: he is wonderful to work with. there is always this vision that the creative leader in a fashion company can be challenging, and there have always been stories around that, ralph is an incredible partner. he is both an amazing visionary and a great business man. that has been a key part of his success. we have been super clear on our respective roles, and although nothing is written on a piece of paper, we are clear who is responsible for what and where we come together, and i could not be happier with the partnership. francine: there was also a moment where you had to change

the company, get away from the department stores. that lowers the ambition for the company. how hard was that? patrice: from a financial standpoint it is challenging, if you go back to the roots of this company, this company was founded as a luxury company and the first time that ralph launched was 2.5 times the price of a christiano george tie. we had to pull back our presence of the u.s. because the brand was overextended. as i look now, we are two or three years into the exercise, we are in a much stronger place. our brand perception is much stronger. our value perception is much stronger.

patrice: do elevation journey, ultraluxury was not necessarily a given. right now when you look at luxury companies, it is clear if you are in the ultraluxury space, you can increase prices, you have a lot more markets around the world instead of moderate luxury. what made you see that back then? patrice: i think it is backed up with what this company stood for historically. already at the time, this phenomenon has been going on for a while that you see this bifurcation of luxury brands that have pricing power, that consumers see the value, and therefore have the ability to increase leverage at a retail where others are focused on selling products. not engaging the consumer in the same way. much more promotional. we felt like let's go back to our roots. that is where we wanted to take

the company. francine: how do you create that fortune? how do you create those moments where people associate you with wimbledon or other shows that elevate luxury? patrice: it is a very holistic exercise. francine: is there one thing you think works better than others? is it the flagship stores that have a very distinct lifestyle that you think people are drawn to more than online? patrice: for us, the way we think about it is 30 key cities around the world. do not think about markets. in each key city we want to have a balanced ecosystem. start with a flagship store that will project the image. our project in china is driven by the city focused, establish a strong flagship, and build the ecosystem around it, but i do not know we can point to just one intervention. the transformation of our marketing and storytelling has been effective, particularly the younger consumer. francine: which is the hardest, right?

patrice: which is the hardest, because they are fickle. there are a lot of opportunities. when i started this job, i often got the question, is ralph lauren still relevant, which is a painful question to listen to honestly. but we had to some extent lost touch with the younger generation. this company is 56 years old, so critical to rejuvenate our customer base, and we pivoted our marketing to be where the younger consumer is. gaming, the types of sports activities that resonate with them, our white polo shirt which is one of our iconic ones. 80-year-old man wearing it, 56-year-old women wearing it. francine: are you the right lifestyle brand for the right moment? people do not go to cotour

events anymore. patrice: hopefully more than just this moment, because we want to be here for another 50 years, but what ralph and the teams have been able to create over the time is the lifestyle proposition. we are not handbag experts or auto experts or sneaker experts. we offer a lifestyle and we offer this range of product. you see people going back to social events. we have this ability to serve you with the more feature driven type of proposition. francine: has work from home changed forever? patrice: maybe it depends which industry you are in. at ralph lauren, i have not seen many people in hoodies, but ralph does come in every now and then in hoodies, and he makes it look beautiful as you can imagine. francine: raising prices, ambitions and asia, and why sustainability is key. patrice: for me, sustainability is not a side activity. it is not a reaction to pressure. it is core to who we are, what we stand for, and to a strong extent it is about the future improvement of our business. ♪

francine: ralph lauren has raised the average price of its products by around 80% since 2018 as it aims to elevate its brand and become a lifestyle luxury company, something the chief executive is passionate about. i continue the conversation with patrice louvet. when you look at pricing, you have also been able to really elevate the brand by increasing prices. is there a limit to how much you can increase prices by before it

hurts demand? patrice: our average unit retail is up close to 80% since we started on this journey. the short answer is i do not think there was a limit as long as we do a good job on elevating the product, elevating the story telling, elevating the environment, making sure the consumer sees the value, and they have so far. our value perception is the highest it is been since we've been tracking it, but the onus on us is to provide this consistent elevation. that will support the continued growth. francine: talk to me about china. it has huge potential, but it is still a small market for you. patrice: huge long-term potential for us.

it is about 6% of the company today. that is double what it was three or four years ago, but absolutely went small when you look at the chinese business for some of the best luxury players in the business that are 20%, 30%, 40%, so i am excited about the opportunities on the runway. what is energizing for us in china is how the brand is connecting with younger consumers and the more elevated consumer. we so oddly enough, it is the result -- our most elevated products we sell best in china. we have the best gender balance. most of our business

historically has been more men. in china, it is a good balance of men and women, and it is a relatively young consumer. late 20's, early 30's, so it is a good example for us for the rest of the world. we are being very deliberate in our approach to china. we are doing it a quality way, so we are building the brand so that serves us well five euros for now, 10 years from now. francine: are you worried that you dilute the brand if you become too big in china too quickly?

patrice: yes, the notion of the brand is important, and there is an element of exclusivity, and that is what we pull back in the u.s. where we felt we had over distributed. ubiquity can be a challenge in the luxury space. it is a challenge of the luxury space, and you want to stay unique and special. that is why we are building markets in china and when we look ahead to markets like india. be deliberate on planting the right foundation so we can build from there with the right presentation. francine: the world is changing. we talk about ai,

sustainability, and the need for fashion companies to do more. how much time do you spend thinking about sustainability? patrice: a lot, and i will tell you why. it is part of the vision of timelessness and authentic style. timelessness and sustainability go together. you cannot expect to be timeless if we run out of resources, so for me sustainability is not a side activity. it is not a reaction to external pressure. it is core to who we are and what we stand for, and to a very strong extent it is about the future of our business. you need to focus on sustainability in order to recruit. younger consumers want to work for companies that care about this planet, they do more than generate revenue and profit. you need sustainability to attract consumers. the younger consumer, they care

deeply about what are you doing differently? are you making a difference? investors particularly in europe place value in sustainability. many of our partners have expectations on sustainability. francine: what does that look like for a luxury lifestyle company? patrice: for us it is multidimensional. right now we are putting emphasis on circularity, and i think if we are able to shift the business model and fashion from linear to circular, that is probably one of the biggest changes we can make that has the greatest impact. to give you examples, it is innovating how we design. so we just launched the first cradle to cradle certified cashmere sweater. it is enervating in materials. it is innovating with the process.

there is a company that helps us with recycling cashmere, and it is leveraging industry scale, because in sustainability we cannot go it alone. francine: do you sell differently to the chinese than you do american consumers in terms of lifestyle? patrice: i think the fundamentals of our lifestyles and the different movies that we showcase, different stories that we tell are pretty consistent. if anything, the way consumers kind of dress and engage with fashion brands on average, this is a generalization, and on average the chinese consumer like the japanese or korean consumer tends to be more elevated and sophisticated in the types of styles they put together, so that informs part of our product. francine: more innovative? it is not necessarily more energy? patrice: it is more luxurious. it is more elevated and luxurious. francine: there seems to be a

trend, and you may be one of the first ones to get chief executives from parts of the industry that were not luxury in fashion, that were actually consumer products. is there a parallel? do chief executives do better than luxury? patrice: that is a big statement. i will not answer that question directly. this trend started in beauty. beauty is where you started to see the consumer professional come in first, and now we are seeing that in the fashion world. i think at the end of the day is getting the balance right between magic and logic, so obviously the fashion industry creative leaders have the magic. bring a higher level of logic without diluting the magic, and i think people from the consumer goods industry bring a greater focus on the consumer, understanding the consumer. where you get successes design a vision, customer needs come

together, and that is where things get exposed. great understanding of the consumer, or data, more experienced, leveraging data and decision-making. there is an element of intuition that needs to be protected, but that can be supplemented by data. francine: what is the ideal algorithm? patrice: it is confidential, i cannot tell you. francine: you would have to kill me. patrice: i would not do that. we look at a lot of metrics. the competitive environment or the types of products being sold in the area. the last thing i would point to is operational. these are complex businesses where we develop a lot of sku's every year, complex supply chains, and what you learn in the consumer goods industry is how to run pretty rigorous and disciplined supply chains and general operations, and a lot of luxury companies number 5, 10, 15, $20 billion. francine: how do you choose celebrities and influencers? we used to rely on magazines. everything has changed now. are consumers more influenced by influencers and celebrities? patrice: influencers have always been part of the business, whether it is the fashion industry order spaces. francine: but it is more controlled. is that the difference? patrice: you are right. it was less spokespeople, and now you have a much broader palette. for us what is critical is authenticity. the concept of i'm going to write you a big check, francine, today and you will talk about us, and tomorrow you will show up on a competitive brand because you got another big check. we are not interested in that. we want people who have an authentic relationship. francine: up next, patrice louvet on risk-taking, gambling with the metaverse, and the next

50 years. patrice: even if we have tried it, as long as we capture the learnings, it was a success. ♪

francine: more than half of ralph lauren's customers are women, yet they represent less than 1/3 of sales. it is an area business the chief executive sees as an opportunity as he bets on growth in women of merchandise. i continue the conversation with patrice louvet. what is next for ralph lauren? are you going to focus on sleepwear? are there other parts you can grow a lot more? patrice: what is amazing with this brand and what ralph has created is you can enter a lot of spaces with a lot of credibility.

we are one of the hottest restaurants in new york. we are looking for an opportunity to open one in london. it is not a core party for us. the next phase for us is winning with women. as i mentioned earlier, our business has been historically driven by men. today, 56% of our customers are women on our website and stores. they represent less than 30% of our business, so that is a massive opportunity for us, and as we get to understand her better, develop the right products for her, resent the products in a way that resonates with her, which may not be the same way for men, that is a big opportunity for us. anti-vax is an area, and we are

looking into home. i actually think if you reflect on ralph's approach of this phase, increases environments, creates this world. you could really picture how that translates into home, so that is an area for growth for us. longer-term, but i am excited. francine: the metaverse. are you excited about the metaverse? we have talked about ai and that we forgot about the metaverse. patrice: we are investing in the metaverse. it follows the principle i talked about earlier, which is we want to be with the consumer. we want to play a leadership

role there, and i'm excited what we are doing there. the ship with fortnite. francine: do you dress the players? patrice: you can actually dress your player in the ralph lauren skin, and there are really cool boots we developed. we did a physical version of them as well. francine: was that quite a gamble coming into -- it is brave, so it paid off. it could have backfired. patrice: true, and here is where i go back to the roots of this company. ralph started with a tie. we could be here 56 years later being the market leader in ties. part of the dna of this company is expanding, experimenting, so we are staying true to that. i always talk about the fact that the only failure is a failure of learning. even if we have tried that and

it bombed, as long as we capture the learnings and reapply them elsewhere, it was a success. francine: what are you like as a leader? a risk taker? patrice: if u.s. people throughout my career how they would describe me, i would say servant leader. my job is to set the team up for success and create the conditions for people to leverage their full potential. if i do that, i will be fine. i think people would say listener. there is a great quote from a greek philosopher. we have two ears and one mouth, and there is a reason for that. people have said i am a learner, and ralph is an incredible inspiration, because based on where he is at this stage of life, he is constantly learning, and i use that is inspiration. i am a measured risk taker i would say. i am not a swim for the fence risk taker, but i believe in innovating, experimenting, and try new things. you feel that energy inside the company today. i love that spirit of trying

things and learning. francine: what is a good day in the louvet world? patrice: a good day where i get the greatest energy and excitement is time in our stores. francine: do you change things around? patrice: i try to avoid doing that. i listen to the stories that our teams tell me, both in terms of how they are engaging with customers, what we can do better in terms of the brand and product, and how they are building culture within their stores. francine: and you are committed to the u.k.? patrice: second-biggest market for the company. this market is important to us. francine: worst day at the office? patrice: when the numbers are not coming through the way that you would like them to, that never feels very good, but welcome to life in the business world. when we are not able to get the balance right between the magic and the logic, and the groups are not communicating well, it

can be frustrating. the fashion industry, one of the lovely things about it is it is very emotional. one of the challenging things about it is it is very emotional. francine: were you surprised that even in this cost-of-living crisis, luxury does so well? patrice: i think people need to dream. when the environment is more challenging, people still need to dream. they need someone who will give them hope and bring optimism, and i think that is what the best luxury companies do well. francine: where will you be in five years? so, you've got the power of xfinity at home. now take it outside with xfinity mobile. like speed? it's the fastest mobile service around. with the best price for two lines of unlimited. only $30 bucks a line per month. that's hundreds in savings a year when you wave bye to the other guys. no wonder xfinity mobile is one of the fastest growing mobile services. you really shouldn't walk out the front door without it. switch today at xfinitymobile.com it's an amazing thing

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