Ralph Lauren is looking to open 60 new Greater China locations within the next 3 years. And while 15 of those stores will be in Beijing, Shanghai, and Hong Kong – and be ready for ribbon cutting this fall – the company is still unsure of where the remainder of the stores will go.
What Ralph Lauren does know, however, is that a stronger presence in China will boost the label’s sales in Europe, particularly among Chinese tourists. “We don’t have a presence in China yet, so we’re not as well known [to the Chinese consumer],” Ralph Lauren president and COO Roger Farah said. “We don’t see them coming into Europe shopping for [our] brands based on big [marketing] statements in China.” Farah said up to 20 percent of the label’s European business already comes from Chinese tourists.
“We are in the midst of transforming our presence in Greater China, a region that we believe will become an important driver of growth for us over the long term, and have some magnificent new stores planned for the next several years,” said Ralph Lauren, chairman and chief executive officer. There are plans to open the bulk of the stores in 2014.
With the unsteadiness of the euro, Ralph Lauren is reluctant to project too many figures, but hopes this expansion effort will help steady European business. “We [do] expect to see increases for fiscal 2013, but lower in terms of gains compared with last year,” said Farah. In 2011, Ralph Lauren’s net gains rose 13.7 percent, from $1.43 billion to $1.62 billion. Its net income rose 20 percent, from $567.6 million to $681 million.