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Staff reporter
U.S. luxury lifestyle company Polo Ralph Lauren will be taking back the reins of its distribution in Korea.
Many may not have been aware that Korean distribution of Polo Ralph Lauren products, which include Polo, Ralph Lauren and Club Monaco, has been run by Doosan Corp. for the last 12 years.
In New York last Friday, Polo Ralph Lauren announced it has agreed to buy back its license for wholesale and retail distribution from Doosan for a total of $47 million. This includes $25 million in cash and another $22 million for inventory and other assets.
Doosan will continue to operate as Polo’s distributer in Korea until Dec. 31. Starting Jan. 1, 2011, Polo Ralph Lauren will take over the distribution of its products in 175 stores located in department stores and five free-standing stores around Korea.
This is part of Polo Ralph Lauren’s strategy to convert its licensee operations to in-house operations over the last few years, in a bid to have better control over its image and branding, especially in Asia.
``Expanding and elevating our international presence is one of our highest strategic priorities... South Korea is one of our largest markets, and has always been an important territory for us. It remains one of the world's most vibrant markets for luxury goods. South Korean consumers have developed a strong appreciation for our iconic lifestyle sensibility and we are excited to build on this success,’’ said Ralph Lauren, chairman and CEO, in a statement.
Polo Ralph Lauren president and COO Roger Farah said the company appreciated the work that Doosan did in building and developing the brand in Korea for the last 12 years.
``Assuming control of South Korea is another important milestone in our broader Asian growth strategy. It is a major piece of the strategy that enables us to directly operate all of Asia with greater consistency across all markets and channels in a manner that is more closely aligned with our global brand positioning and objectives,’’ he said.
The company began buying back its Asian licenses in 2007, starting with Japan. It also gained back control of its distribution in China, Hong Kong, Indonesia, Malaysia, Philippines, Singapore, Taiwan and Thailand earlier this year.
For Doosan, the loss of the Polo Ralph Lauren operations will have a ``limited’’ impact on its financial performance since the conglomerate is moving away from its retail business and shifting to heavy industries, according to a news comment by Korea Investment & Securities. Doosan’s apparel division posted 249.7 billion won in sales and 19.4 billion in operating profits in 2009.
Polo Ralph Lauren is already popular in Asia, with its range of high-end to mass market products. It is best known for its classic short-sleeved knit polo shirt with an embroidered polo player logo on the left side.
The company offers luxury lines such as Purple Label for men and Ralph Lauren Collection for women. Other brands include Black Label, Polo Ralph Lauren, Lauren by Ralph Lauren and Lauren Jeans.
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