Business Valuation of Polo Ralph Lauren Corporation - Mark Moore ...

Debt Ratio: Polo Ralph Lauren has a low debt to capital ratio that provides financialstrength, which allows for future growth. Polo recently in 2002 paid off their revolvingline of credit of 3 million dollars to become clear of any type of bank loans or loan ablefunds.Weaknesses:Polo’s weaknesses are in its dependence on department store sales andmanufacturing.Dependence on Department Stores: Sales from department stores make up for almost onethird of Polo Ralph Lauren’s revenues. Sales in department stores can be uncertain due toshared housing with competitors and the financial stability of these stores.Dependence on Manufacturing: Competition for quotas and capacity from other clothingmanufacturers has resulted in limitations with manufacturing for situations of highdemand. Product quality is also a factor hindered by manufacturing, due to the highstandards of the Polo fashions. Polo’s designs sometimes create new methods for qualitywith manufacturing, which hinder future growth.Opportunities:Polo’s opportunities for growth include brand extension, specialty retail, andinternational expansion.Building and Extending the Brand: Polo Ralph Lauren is one of the world's premierbrands, universally recognized and associated with distinct design, luxury and quality.Polo’s integrated approach to advertising and marketing uniquely showcases the world ofRalph Lauren. Retail stores continue to be an important physical extension of its globalbrand. Success with its specialty retail business has given Ralph Lauren the confidence toapply its expertise to wholesale business, including merchandise mix, visual presentationand excellent customer service. There is more to come as Polo expands and extends the10