The deal is for an undisclosed amount with Franklin Venture Partners, a specialized financial team within Franklin Templeton that’s focused on mid- and late-stage private companies.
In turn, Ralph Lauren will leverage the investment team’s deep experience to collaborate, develop and deploy new technologies. “The investment also provides a platform for Ralph Lauren to discuss trends and opportunities with industry peers and experts, as well as benefit from Franklin Venture Partners’ extensive network and new avenues for data, research and insights into emerging consumer technology,” the company said.
“At Ralph Lauren, the powerful combination of honoring our heritage while embracing innovation has guided our brand and business for decades,” Patrice Louvet, Ralph Lauren’s president and CEO, said. “Participating in opportunities like this one with Franklin Venture Partners is one example of how we are pursuing new pathways for innovation, and we are excited to support the growth of these companies and benefit from insights and technology that can help guide our company and our industry’s future.”
This latest move by Ralph Lauren follows the minority investment it made in August 2020 in Natural Fiber Welding Inc. (NFW), a sustainable material science start-up. NFW is on the cutting edge of revolutionizing the reuse of natural fibers. It works with cotton waste and reuses it into patented, high-performance materials.
The fashion firm will help with product development using plant-based, upcycled materials. As part of the investment, Ralph Lauren will help the start-up scale its patented process and develop it first-of-its kind performance apparel made from natural, sustainable materials. The investment in NFW also provides another benefit for the luxury fashion firm. The expansion of Ralph Lauren’s use of recycled post-consumer cotton will help advance the company’s progress toward both sourcing 100 percent of its key materials, including cotton, by 2025 and integrating zero-waste principles across its business.
Ralph Lauren also announced last year that it is open-sourcing the first phase of a new platform that it says will revolutionize the way the fashion industry dyes cotton. Color on Demand, according to the brand, will not only dramatically slash the amount of chemicals, dyes, time and energy employed in cotton dyeing, but it will also, “for the first time in the industry,” deliver a more effective and sustainable way of coloring cotton at any stage in the product manufacturing process.
The company is slated to report third-quarter earnings results on Thursday. A research note on Monday from UBS softlines analyst Jay Sole said that his company is maintaining its “Buy” rating on shares of the company’s stock, which has a target price of $168 a share from current trading range of $109. Sole said “We believe Ralph Lauren fundamentals continue to improve” and said his firm has a “bullish 12-month view,” despite supply chain challenges and a likely tougher macro environment for Fiscal Year 2023.
Ralph Lauren isn’t the only fashion company looking at investment to gain learnings to decipher and plan how it can play a role in helping create a more sustainable environment, or even learn about new consumer technology trends, including the metaverse. The company in August partnered with social app Zepeto to foster chat-room conversations and Ralph Lauren digital duds.
Teen retailer American Eagle paid $350 million in November to acquire Quiet Logistics, shelling out cash for a mission-critical supply-chain partner. American Eagle’s CEO in December said the acquisition has help the retailer reduce delivery costs amid rising inflation. The Quiet Logistics acquisition followed the teen retailer’s acquisition of AirTerra in August. AirTerra aggregates packages from multiple shippers through its own network into major metropolitan areas, an approach that—working with regional carriers and the United States Postal Service—aligns with the needs of e-commerce deliveries to finalize the last mile.