Apparel maker Polo Ralph Lauren Corp. will discontinue its U.S. Polo Jeans Co brand to focus on expanding its denim line across other brands globally, including Lauren for women and Polo Ralph Lauren for men, the company said Wednesday.
“It has not been performing well for some time and because of our design expertise and our relationships through existing brands, we're more interested in expanding the denim category globally rather that isolating it in one brand,” said Polo spokeswoman Nancy Murray.
In January, the company had bought back the U.S. Polo Jeans Co license from Jones Apparel Group Inc. for $255 million to gain more control over its brands. The Polo Jeans license had restricted Polo Ralph Lauren's ability to develop and sell denim in other lines.
“The beauty of buying back the brand was that we were no longer limited contractually,” Murray said.
Polo Ralph Lauren had already owned international rights to the brand and the plan to discontinue the U.S. business does not affect its international operations currently, according to the company.
The company, which is expected to report fiscal fourth-quarter financial results on May 25, said its exit from the brand has “not changed any of our financial plans.”
Employees in the U.S. Polo Jeans unit will be able to apply for jobs within other Polo Ralph Lauren groups. Murray declined to say how many employees would be affected.
“We are discontinuing the brand domestically as of spring, 2007, and that business will be replaced by Lauren denim for women, a more premium brand, and denim for Polo Ralph Lauren for men, which we believe has more potential for growth,” Murray said.
The company has already talked to customers including Federated Department Stores Inc., owner of Macy's and Bloomingdale's, and the reaction has been positive, according to Murray.
“We've had very good conversations with retailers,” she said. “They're enthusiastic about us adding another dimension to Lauren and the Polo brands.”
Polo Ralph Lauren shares were up 80 cents at $55.20 in early trading.
Posted by Constance Wherrity on May 24, 2006 6:03 PM
| Permalink
