Polo Ralph Lauren said this morning it will spend about $370 million to buy the outstanding 80% of Impact 21 Co., its Japanese licensee, and the outstanding 50% in its Japanese master license. In a move to exert more control and influence over product and distribution, the company said it would add stores and expand its department store presence in Japan as a result of the transaction. Japan is the company's largest market outside of the U.S., but still accounts for only 10% of its group sales vs. 70% in the U.S. President Roger Farah: "Our long-term strategies are to build Ralph Lauren into a global business that is evenly spread between Europe, United States and Asia... We will look to reinforce the brand’s image and elevate the distribution in Japan to better align with our business globally." Shares of Polo Ralph Lauren gained 1.2% yesterday, and are up 21% in 2007.
Sources: Press release, Bloomberg, Reuters
Commentary: Polo Ralph Lauren Corp.: Expanding the Brand • Ralph Lauren: Continued Strength in Brand Image • Ralph Lauren Is Undermining Its Brand
Stocks/ETFs to watch: Polo Ralph Lauren Corp. (RL). Competitors: Jones Apparel Group Inc. (JNY), Liz Claiborne Inc. (LIZ). ETFs: Consumer Discretionary SPDR ETF (XLY), PowerShares Dynamic Consumer Discretionary (PEZ), Vanguard Consumer Discretionary VIPERs (VCR)
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