Is Polo Ralph Lauren right to buy back distribution in Asia?
Polo Ralph Lauren has regained direct control of its operations in South Korea amid Asian expansion plans.
In a move that will enable the homewear and clothing company to operate more efficiently and consistently across Asia, it has agreed to buy back wholesale and retail distribution from its South Korean licensee, Doosan Corp. The deal, worth $47 million, will be effective from December 31, 2010,
Chief Operating Officer Roger Farah said that assuming control of South Korea would make the company’s Asian operations “more closely aligned with our global brand positioning and objectives”. He also explained that the company’s fully integrated Asian strategy will “optimise the unique opportunities of each country”.
CEO Ralph Lauren added that international expansion was of highest strategic priority for the brand, and that South Korea is one of its largest markets. The move suggests implications for the company’s international retail marketing strategy.
“[South Korea] has always been an important territory for us. It remains one of the world’s most vibrant markets for luxury goods,” he said.”South Korean consumers have developed a strong appreciation for our iconic lifestyle sensibility and we are excited to build on this success.”
Polo Ralph Lauren began a series of Asian acquisitions in Japan in 2007, followed by several other key Asian markets in January 2010.
Tags: Global Brand
