Everything You Need to Know About Ralph Lauren's New CEO, Stefan Larsson

Gregory Babcock
Updated

It came down yesterday that Ralph Lauren would be stepping down as the CEO of his eponymous company. While Ralph is still going to be staying on as executive chairman and chief creative officer, he'll be replaced by Stefan Larsson, currently operating as the global president of Old Navy.

But while 'Lo Heads weep polo pony-sized tears the world over, the burning question is simple: Who the hell is Stefan Larsson?

As a pioneering force around the global expansion of H&M and the image overhaul of Old Navy, you're likely familiar with Larsson's work even without knowing it. Considering he'll be taking the reins of one of the world's biggest lifestyle properties, he's definitely a name you'll be hearing more and more as he steps into his CEO role. This is Everything You Need to Know About Ralph Lauren's New CEO.


  • Previous Work at H&M

    Stefan Larsson will be leaving behind the position of global president at Old Navy, which is under Gap's family of brands. Larsson held the position since 2012, but was working at H&M prior to jumping over to the American retailer. Working for the Swedish fast-fashion giant for almost 15, Larsson was instrumental in growing H&M into the global powerhouse the we're familiar with today. His management roles culminated into his appointment as the Head of Global Sales at H&M, which left him in charge of roughly 2,300 brick-and-mortar locations, which pulled in about $17 billion annually. But his duties didn't end there, with Larsson handling real estate, store design and construction, and expanding H&M around the globe—this would include H&M's launch on U.S.' west coast. By the time Larsson had shifted over to Old Navy, H&M had expanded from 12 to 44 countries, with a five-digit increase in sales.


  • Impact on Old Navy

    The ironic part about Larsson's expansionary policy at H&M was that is affected rival low-cost brand Old Navy rather dramatically. Considering that Old Navy is the most “affordable” label in the Gap Inc. family of brands, H&M's rise in presence and popularity directly damaged the affordable pieces that the U.S. retailer was trying to sell. However, following Larsson's influence—as The New York Times noted in a story earlier this year, Old Navy was transformed “from a butt of jokes, to its parent company's crown jewel.” A report in May of this year notes that Old Navy brought in roughly $6 Billion in sales—a number which nearly matches the sales of Gap (the brand) and Banana Republic combined. Basically, Larsson turned Old Navy from the little brother into the bread-winner.

    Focusing on design more than a “clothes by the pound” approach, Larsson was able to leverage the frugality of post-Great Recession shoppers, seeing Old Navy as a haven for basics that would benefit in the modern “high-low” mentality that most people dress themselves with today. Hiring Ivan Wicksteed as Chief Marking Officer to overhaul the brand's image, and adding Jill Stanton to change Old Navy's design philosophy were key moves in turning the brand from follower into market leader. Yes, the brand still focused on staples, but like at H&M, Larsson and his team inspired the Old Navy designers to focus on details while shifting to capturing trends.

    With “activewear” a major inspiration throughout fashion, it's not lost on Larsson that brands like Lululemon sell a pair of leggings for $100—while a whole family could be outfitted in Old Navy activewear for the same price. Simply put, Larsson helped Old Navy realize that while a shopper may have limited funds, they want to look as fashionable as anyone else.


  • The Current State of Ralph Lauren

    Ralph Lauren isn't really as clean cut as a single silo in a larger grouping of brands—as is the case with both H&M and Old Navy. The sheer volume of lines that the American designer has lent his name to have simultaneously created a global lifestyle empire…and somewhat of a tangled mess. With sales and profits falling in 2015, shares of the company have dropped about 44%, with a loss of about $5 billion in market value. As President and Chief Operating Officer Jackwyn Nemerov retires the same month that Larsson steps into his new role, its a sign that her attempts to restructure the business globally haven't gone over well.

    Considering that the company also reported a decrease in foot traffic at its retail locations, among other reasons, the label was flagging behind competitors. As the Ralph Lauren brand expands into things like The Polo Bar in New York, Larsson is Lauren's chief pick to unite and consolidate the several endeavors under the Ralph Lauren umbrella.


  • What Does it Mean For Ralph Lauren

    While Old Navy and H&M are really different beasts, a key unifying point has to be their focus on affordable style. While Ralph Lauren isn't altogether affordable like the offerings on H&M and Old Navy, his ability to acclimate shoppers from all economic backgrounds with a brand is what makes him a key player. With Ralph Lauren's (the brand) slumping shares and increase luxury space competition, the brand—while still iconic in American fashion—is fighting to maintain a spot that its hustled to keep since its inception. Considering that H&M and Old Navy are two names in an incredibly crowded “affordable” brand market, Larsson's ability to adapt in crowded industries are another selling point for his new role as CEO.

    It's also worth noting, that while Lauren is stepping down as CEO, in the new arrangement, Lauren will still be maintaining much of the creative control; Lauren's new titles will be both executive chairman and (more importantly) chief creative officer. Lauren himself has stated that the new arrangement is more of a “partnership” and that he “doesn't feel like he's stepping back now.” (In other words, it's still Ralph tho).

    But on the business side of things, as brands within the overall Ralph Lauren library stagnate or show signs of slow down, Larsson's ability to expand and reinvent are the likely reasons behind his appointment. Yes “It Ain't Ralph Tho” likely had a positive effect on the brand's sales in a hard-to-quantify way, but that's only as lasting as the catchphrase itself.

    As Ralph Lauren plans to juggle its luxury labels, its stores, its lifestyle and home goods lines, new abstract projects like the Polo Bar, and—of course—Polo, it needs a leader who can clearly identify consumers for each line, and revamp the ones that aren't working. Larsson's pedigree has proven that, while he's an outsider, he's the man for the job.

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