Business Units or Product Lines

Ralph Lauren Corporation operates through three main segments: 1) Wholesale, which includes the sale of products to department stores and specialty retailers; 2) Retail, which encompasses the company-owned retail stores, concession-based shop-within-shops, and e-commerce websites; 3) Licensing, comprising royalties from licensing partners who produce and sell products bearing the company’s trademarks.

Business Models for Each Product Line

Ralph Lauren generates revenue through its wholesale channel by selling products at discounted rates to retailers who then sell to end consumers. The retail segment generates revenue directly from consumers either through physical stores or online platforms, with expenses including store operations and customer service. The licensing segment generates revenue through licensing agreements granting third parties rights to use Ralph Lauren trademarks in exchange for royalties. Major expense categories include cost of goods sold, selling, general, and administrative expenses.

Future Opportunities for Growth

Ralph Lauren seeks growth through expanding its digital and e-commerce presence, penetrating emerging markets, enhancing customer experience through personalized services, and diversifying product offerings, especially in the sustainability domain.

Potential Major Risks

Major risks include changing fashion trends leading to reduced demand, economic downturns affecting consumer spending, disruptions in the global supply chain, and increased competition from other luxury brand retailers.