3/30/10: Roger Farah, Wharton ’74 and President & COO of Polo Ralph Lauren, kicks off Penn Fashion Week with a keynote speech

Roger Farah, Narciso Rodgriguez Sandwiched Penn Fashion Week

By Whitney Beckett

Thirty-six years ago, Roger Farah made a decision that his Wharton undergraduate classmates thought was “crazy.”
“When I came out of Wharton, I was the only person in my class going into retail, and I started at $8,600 a year — probably half or a third of what people were making going to Wall Street,” said Farah, the president and chief operating officer of Polo Ralph Lauren Corp. “But I knew I wanted to enjoy myself and have a diversified day. Retailing at the time was one of the few industries where a 23 or 24 year old could run a full business. I took a path that was unproven and untested, but I figured if I was any good, I would be fairly compensated over time.”
And he was good. Today, Farah is the top-paid executive in retail – behind only Ralph Lauren himself.
Farah’s keynote talk to a near-full G-06 on March 30 kicked off Penn Fashion Week , and a conversation between designer Narciso Rodriguez and John Hoke, vice president of global design at Nike Inc., at the University of Pennsylvania’s architecture school building concluded the week of festivities on April 7.
“The role of design is shifting right in front of us,” Hoke said. “It means designers need to engage in strategic thinking and be able to speak the language of business.”
Although Rodriguez admitted he doesn’t “love the commerce part” of design, he noted the importance of having a strong business partner.
“There are many great designers out there who don’t succeed because they don’t manage the business aspect of their work,” Rodriguez said. “And there’s mediocre designer who have enjoyed great success because they have great business partners…. I don’t love the commerce part of it.”
Rodriguez, who dressed Michelle Obama on election night and Carolyn Bessette Kennedy at her wedding, recently did an 8-piece collection for eBay. “I never wanted to have a secondary line, because it’s product you don’t touch. But we decided to do this much smaller version that I controlled the quality of,” he said. “At the end of the day, you are successful if you dress a lot of people, and this was a great way for me to reach a broader audience.”
Hoke continued the conversation. “You and I design for the exact same site again and again: the human body,” he said. “When you are an architect, the site changes, the context changes.”
Rodriguez thought for a moment before responding: “Creating for a women’s body is a beautiful thing – it’s a source of inspiration.”
Although in his talk Farah spoke namely to the business side of the $9-billion market cap firm, he reflected on how Ralph Lauren’s design impacts the lifestyle marketing it pioneered. “The way Ralph designs is really with a movie in his head,” said Farah. “Most of our marketing is about branding and imagery – we are rarely trying to sell a specific product.”
Farah called Ralph Lauren “probably the most diverse company in our industry,” with more than 35 brands, 50 merchandise categories, 160,000 SKUs, manufactures in 45 countries, has 600 vendors and more than 9,500 delivery points worldwide – a marketing, OPIM, and strategy challenge all wrapped into one.
“The last five years has seen this strategy pay off for us in both good times and bad,” Farah said of Ralph Lauren, which has outperformed the industry through the recession and before it.
Analysts agree that a key to that success has been Ralph Lauren’s clear segmenting between brands and distribution.
“I was a student here in the mid-70s, and unfortunately most of the brands from then aren’t still around because they didn’t manage their brand and distribution,” Farah said. “How to balance growing a business and keeping it exclusive is a key question. That’s what drives most companies to become a portfolio, and most of those companies have one or two good brands that carry their bad brands. We make sure we keep marketing, product and distribution distinctive at each tier and by each market.”
Another big part of that strategy is to eventually be split evenly in sales internationally between the US, Europe and Asia. The company took back its license for Asia in January.
“One of our original concerns when we pushed out internationally was whether what is a very American lifestyle would appeal to an international consumer,” said Farah. “But it’s less about American lifestyle and more about aspirational lifestyle.”
Farah said he expects a 10-year learning curve in Asia, adding that the company had already learned a lot from Asian customers who are shopping online and who shop in Ralph Lauren stores while traveling internationally.
“Even if brand imaging has to be adjusted, the bigger adjustments are in product and service levels,” Farah said, adding that product has to be adapted for the Asia market in terms of sizing, color, and eyewear shapes.
“The areas you hear people talk about that we haven’t talked about as aggressively are India and Latin America,” he added. “We can’t take on everything, and our priority is on Europe and Asia. The one thing that could us back is talent on a worldwide basis.”
Farah said the company’s top priority is attracting talent, including eventually 12,000 employees in the Asia-Pacific region – welcome news to the undergraduate and MBA students in the audience.
But not everyone at Wharton impressed Farah with Polo know-how. Farah joked that he was “horrified” that Dean Thomas Robertson was wearing a Ferragamo tie.
“And he asked me if we made ties!” Farah said, sharing the story of Ralph Lauren’s origins as a tie maker more than 40 years ago. “We may have to re-educate your dean.”