In recent years, Europe’s luxury houses have concluded that streetwear cannot be ignored if they’re to win over millennials and Gen-Z. Last May, Louis Vuitton hired Virgil Abloh, the designer behind the Off-White streetwear label, to lead men’s design. That same month, Supreme had its high-fashion moment at a $1 million auction in Paris.
Ralph Lauren isn’t just about plain polo shirts and peacoats anymore. It’s about the hype.
Looking for some buzz, the 52-year-old fashion house using tactics straight from the “hypebeast” playbook—industry slang for shoppers who obsess about clothes that get extensive publicity. Similar to Apple fanatics who camp out in advance of a new iPhone release, these devoted buyers are willingto stand in line for hours to get their hands onthe latest drop of sneakers or T-shirtsfrom brands such as Supreme or A Bathing Ape.
“We’re in the brand-building business,” Ralph Lauren Chief Executive Officer Patrice Louvet said in an interview Tuesday. That comes at a cost. The company increased its marketing investment 18 percent in fiscal 2019compared to the year prior. Louvet plans to increase that budget to 5 percent of total sales—which would be more than $300 million—to court younger buyers.“We do want to make sure we have competitive marketing support” in order to lure new shoppers to the brand, he said.
That cash willbe spent largely on social and digital as the brand moves away from traditional print ads.The companyhas brought on a new cohort of younger celebrities to sell its goods, such as Taylor Hill, the face of its Romance fragrance. The 22-year-old supermodel walks in the world’s biggest fashion shows and has 12.3 million followers on Instagram. A holiday gift campaign included social-media savvy starsRachel Zoe, Cameron Dallas and Olivia Palermo.
So far, the boosted marketing budget has been a successful piece of Ralph Lauren’s revitalization plan, along with a cutback on discounts and inventory. Last quarter, itreversed a streak of same-store sales declines going back to 2015. On Tuesday, the company reported rosy earnings that exceeded analysts’ estimatesand said its marketing during the crucial holiday season paid off, sending shares up the most ineight months.
In recent years, Europe’s luxury houseshave concluded that streetwear cannot be ignored if they’re towin over millennials and Gen-Z. Last May, Louis Vuitton hired Virgil Abloh, the designer behind the Off-White streetwear label, to lead men’s design. That same month, Supreme had its high-fashion moment at a $1 million auction in Paris.Yet few of America’s oldest fashion brands have fully embraced the skater-friendly clothes that have become a cultural phenomenon.
Ralph Lauren, however, is starting to learn the playbook. When the brandreleased its Winter Stadium collection last fall, it partnered with streetwearmainstays Opening Ceremony ande-commerce site HBX.
In November, Ralph Lauren released a collaboration with British streetwear label Palace. Rather than sell the items in limited quantities across all its stores, the clothes were sold in a few select Ralph Lauren locations and specialty boutiques such asDover Street Market, aCommes des Garcons store in South Koreaand online through the Polo app. The strategy is right out of the classic sneaker drop playbook: Create scarcity and borrow the credibility of a partner label.
Upon release, the Ralph Lauren website struggled to keep up with demand andPalace items are now selling for much more than their retail prices on the secondary market, as limited-edition goods often do. A Palace x Ralph Laurensweater with a preppy bear on a skateboard that retailed for $475 is going for about $800 on popular streetwear reselling site StockX.
Seventy-five percent of shopperswho bought items from the collaboration were newcustomers, Louvet said. Those buyerswere about 10 years younger on average than the usual Ralph Lauren shopper, according to company data.
The label must be careful not to overdo these splashycollections, Louvet said. Otherwise,the hype train might run out of steam.