By coinnews 
00:00 Speaker A
Ralph Lauren topped estimates for revenue and adjusted earnings per share in its fiscal fourth quarter, but as tariffs take effect, the luxury retailer predicts sales growth will slow in the latter half of its fiscal year. LVMH has reportedly been warning investors of continued weakness in demand. That’s according to reporting from Bloomberg. Joining me now to put it all together, Pauline Brown, former LVMH chairman of North America. Pauline, as always, it is great to see you. We’ve really seen interesting
00:58 Speaker B
indications from some of the big luxury houses or sort of mid-market to luxury houses, I think of Tapestry as well, which did better than estimated. Big picture, how are you viewing some of these tea leaves that we’re getting?
01:18 Pauline Brown
So, if there were two themes that define the current market of, as you said, either moderately luxurious or ultra luxurious brands, it’s the winners are those that are perceived as good value and those that are purely luxury lifestyle. So, what do I mean by that? Ralph Lauren came out today. Really had stellar results, I have to say. I mean, up high teens in China. I mean, nobody’s growing like that in China. But I think the story there that really wasn’t told directly is that this is a trading down. Uh, Ralph Lauren has almost 200 outlets in North America alone. I mean discount outlet stores. Prada, by comparison, which is also doing well, has less than 10. Armani has closer to 15. So there’s a big portion of Ralph Lauren sales that are not happening at the purple label level, but the cachet of the brand is still bolstered by that purple label. So Tapestry would fall into a similar camp as Ralph, and they are doing very well. And then you have a few players like Hermes and Brunello Cucinelli and Moncler that are more lifestyle than fashion that are also more purely luxury than spanning all the different segments and that are not that diversified like LVMH and caring. And in this case, that’s a good thing. They’re also doing very well, the ones that are less diversified.
03:46 Speaker A
When I see, you know, the trends in Ralph Lauren, there’s a few questions from where things are produced, where they’re being, you know, consumed. It’s interesting that North America revenue looked only up like 3%, but Europe up double digits, China up double digits. China has been one of those interesting markets where you see they’re competing in things like EV and phones with Huawei. But the branding on luxury items like this, you know, they’ve got some things like Anta who’s making making progress on some parts of of clothing, but what do you think about the luxury brands in China? Are they going to be able to compete with their own brands here in in China versus like a Ralph Lauren?
04:49 Pauline Brown
So, if the question is, do I think Chinese Chinese marketed brands are on par, absolutely not. Not to say that there isn’t a lot of talent in China, not to say that the production capabilities aren’t very good in China. In fact, many of the luxury brands are already making products in China. In the case of Ralph Lauren, about 15% of their supplies come from there. But the storytelling and the experiential design is not at a world-class standard yet. Um, why do I think Ralph Lauren though had so much momentum in a market that otherwise is treating most of these global luxury brands pretty harshly? I think because it’s good value. And I think in an in an environment where the other brands have really taken price to an untenable level, there is an embrace of those that are still doing quality product and telling good stories and offering good experiences and affordable.