- Ralph Lauren just reported strong sales in Asia, including in China.
- The iconic American brand appears to be bucking the luxury slowdown in China.
- Classic luxury, which Ralph Lauren encapsulates, is resonating with Chinese consumers.
Ralph Lauren, the quintessential American brand, is pulling off what many of its luxury peers are finding near impossible right now: getting Chinese consumers to spend.
An integral part of Ralph Lauren's success is that it doesn't shy away from its all-American-ness.
At a time when luxury conglomerates like LVMH and Kering are seeing sales in China drop, dampened by issues like its real estate crisis and the rise of "luxury shaming," the New York City-headquartered company is seeing quite the opposite.
In its second-quarter earnings for fiscal 2025, released Thursday, Ralph Lauren reported global same-store sales were up 10%. Asia led its growth, with same-store sales up 11% during the quarter. The company said revenue growth in Asia was up 10% in constant currency, with the China market alone up in the low teens.
China remains a relatively small revenue source for Ralph Lauren, accounting for just 8% of the entire business. But it's onto something there — and it knows it.
"I've said it before but it bears repeating in a volatile environment, Ralph Lauren is firmly on offense," Patrice Louvet, the CEO of Ralph Lauren, said on a conference call with analysts on Thursday.
Logos are out, but 'Preppy' is still in
One factor contributing to the luxury slowdown in China is a move away from ostentatious displays of wealth, fueled partly by government policy.
Xi Jinping's government has spent over a decade discouraging ostentatious displays of affluence, fueling the rise of "luxury shame" among Chinese consumers.
Neil Saunders, managing director of GlobalData Retail, told Business Insider via email that while this movement has hit brands that are "overt" and "flashy" hard, it's set up brands like Ralph Lauren, known for its "classic, quiet luxury" products, to thrive.
He said Ralph Lauren's styling and brand position are very favorable to current trends, in which consumers are not looking to flaunt their wealth but want products that have some longevity.
Martin Roll, global business strategist and senior advisor at consulting giant McKinsey, also told BI over email that Ralph Lauren's embodiment of the "classic American lifestyle" is key.
As the Chinese market shifts from conspicuous spending to "more refined and 'timeless luxury,'" Roll said, consumers want brands that "represent quality, authenticity, heritage, and status."
Speaking to analysts in the conference call, Louvet said staple products like Ralph Lauren cable-knit sweaters, Polo shirts, and sports coats are what have driven sales, both in China and abroad.
"Our core is resonating in Tokyo, in Seoul, in Shanghai and Milan," he said. "At a time where consumers are worried about the future around the world, where they're more discerning on how they spend their money, they really turn the brands they know. They turn the product categories they trust."
American, but China-forward in China
While Ralph Lauren doesn't hide its Americanism in China, it does reinvent how it targets consumers there, which Roll said is key to its success.
"Ralph Lauren has established a strong online presence on major e-commerce sites such as Tmall and JD.com, as well as on social media platforms like WeChat," Roll said. "This omnichannel strategy allows the brand to reach a wider audience and engage consumers through multiple touchpoints aside from retail stores."
He added that Ralph Lauren is connecting with Chinese Gen Zers, who are increasingly accounting for a larger portion of luxury purchases through those same digital platforms, pop-up stores, and exclusive collection drops.
With its brick-and-mortar stores, Ralph Lauren has prospered by doing more with less.
It targets just six key cities in China — including Beijing, Shanghai, and Chengdu — a contrast to some luxury brand peers that went all in with opening newer, bigger stores throughout the country during the luxury boom post-COVID-19 — some of which now sit empty.
Leaning into sustainability — which Olivia Plotnick, founder of Wai Social, an advertising and social media firm in Shanghai, previously told BI is another way younger generations in China are redefining luxury for themselves — is also playing to Ralph Lauren's favor.
"Sustainable practices are becoming more and more important to Ralph Lauren, which appeals to China's younger, greener clientele," Roll said, noting the company's "Color on Demand" cotton dyeing initiative, launched in 2021, as an example.
"This China for China approach shows respect for local culture and values," he added. "And it appeals to national pride and fosters brand loyalty for Ralph Lauren."
Still, with Donald Trump's reelection, looming tariffs against China raises questions on how long Ralph Lauren's winning in the region may last.
Roll said American brands may find it harder to appeal to Chinese consumers in the wake of tariffs because of rising nationalist sentiment.
"It's not going to be easier to be an Apple. It's not going to be easier to be an LVMH. It's not going to be easier to be any type of retail brand in China, at least in the foreseeable future," he said.