The night my mom arrived home from work, waving her special employee copy of the look book from the Polo Ralph Lauren (NYSE: RL ) fall 2011 fashion show, the New York Stock Exchange was the last thing on my mind. Yet, as we excitedly perused the pages, I couldn’t help but notice something odd about the ensembles. Straying from the traditional focus on American luxury, the collection appeared uncharacteristically Asian-inspired. What happened to my good, old, red-white-and-blue, preppy, luxury brand? And why the heck are those models wearing kimonos?
Major shifts in the style of a business aren’t decided on a whim. Although it is possible that Mr. Lauren finally decided to unleash his secret, burning fascination with Shanghai in the 1920s, I doubt such was the inspiration behind the line -- especially given the company’s recent efforts at expansion into the Asian market.
Over the past three years, Polo’s focused on establishing footholds in a handful of major Eastern countries including Japan, China, Indonesia, Malaysia, the Philippines, Singapore, Taiwan, Thailand, and most recently South Korea. Although seemingly aggressive, the movement into Asia is trending positively, evidenced by a sales increase of more than 40% in 2011.
|
Net Revenue
|
2011
|
2010
|
2009
|
| U.S. and Canada |
$3,807.8 |
$3,445.4 |
$3,575.0 |
| Europe |
$1,178.6 |
$1,052.6 |
$1,028.4 |
| Asia |
$658.0 |
$464.1 |
$401.2 |
| Other regions |
$15.9 |
$16.8 |
$14.3 |
Source: Polo Ralph Lauren 2011 Annual Report, all figures in millions.
In fact, this Asian invasion has emerged as a trend among profitable high-end retailers. Coach (NYSE: COH ) similarly has begun targeting consumers across the globe. The company’s products are available at more than 182 international department stores and retail stores in more than 20 countries. In addition, the company has declared intentions to create a dual listing on the Hong Kong stock exchange in hopes of raising company awareness.
Tiffany (NYSE: TIF ) has also joined in on the race to meet the demands of the rapidly growing Asian luxury market, opening up seven new stores in the Asia-Pacific region this past year. The speedy emergence of a middle class in Asian countries has provided premium retailers with an opportunity to introduce their brands to a whole new network of consumers -- and they’re not hesitating to jump on it.
Foolish bottom line
Despite a year full of hardship due to natural disasters, demand for luxury goods in the world’s largest and most populous continent has increased, and luxury retailers have no complaints.
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