beach polo chicago New Ralph Lauren Chief Revived Old Navy After Successes at H
Larsson is widely credited with vastly expanding H cheap chic fashion business and then rescuing Old Navy, transforming the retailer from a dowdy discount brand into a symbol of affordable fast fashion. And while the customer base for those two retail companies may have a lot in common, the upper end of the Lauren brand still sought to capture a far more aristocratic country club clientele.
But over all, the Lauren brand has struggled to remain relevant in a rapidly changing retail world, and has recently suffered from a slumping share price and increased competition.
And that’s where Mr. Larsson is viewed as being able to step in and manage the company. Dressed in a well pressed blue suit, Mr. Larsson joined Mr. Lauren at the label’s sprawling Midtown Manhattan headquarters on Tuesday to discuss the appeal of making the transition.
In 2012, when Mr. Larsson joined Old Navy, a subsidiary of Gap Inc., it was already troubled. Sales had fallen by more than $1 billion from 2006 to 2008. The recession had hurt retail spending, even at lower end brands. And Old Navy could not keep up with nimbler competitors, like H that had figured out how to respond more quickly to fickle fashion trends.
Mr. Larsson has said that he frequently felt unfashionable growing up in a small town in Sweden, where trends took time to arrive from the big cities. As a retail executive, he helped change that model.
Mr. Larsson spent 15 years at H before joining Old Navy and oversaw the company’s global expansion into a fast fashion empire.
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“Using what he learned at H he did a better job of matching supply and demand,” said Bridget Weishaar, a retail analyst with Morningstar. “He realized that people who were buying cheap clothes still wanted to look good.”
Mr. Larsson, 41, eschewed what he called the “clothes by the pound” approach favored by many discount retailers. Instead, he focused more on design, and on cutting down how long it took to get clothes from the design stage onto the shelves.
The strategy worked. Last year,
Old Navy took in nearly $6 billion in sales in the United States, making up nearly 40 percent of Gap Inc.’s global revenue nearly as much as the Gap and Banana Republic brands combined.
“Unfortunately, their sister division, the Gap, doesn’t seem to have either read the memo or can’t seem to get organized,” said Mark A. Cohen, director of retail studies at Columbia University’s business school and former chief executive of Sears Canada. “Allegedly, Gap is trying to do the same, but it remains to be seen whether they can do it or not.”
Gap Inc. stock fell 3 percent in after hours trading on Tuesday.
“Given Mr. Larsson’s strong leadership and contribution to the Old Navy division, we see this as a loss for Gap,” John Morris, a retail analyst with BMO Capital Markets, wrote in a note shortly after the Lauren announcement. “The Old Navy team really coalesced behind his leadership, at a time when the division needed it, and morale significantly improved.”
Jill Stanton, Old Navy’s executive vice president for global product, will take over Mr. Larsson’s duties as the company hunts for a permanent replacement. Art Peck, Gap’s chief executive, repeatedly emphasized his confidence in Ms. Stanton’s abilities and said he expected “no change” in operations as Old Navy heads into the all important holiday season.