From zero to hero: the tumultuous turnaround of Lacoste

Founded in 1933, the turnaround of French sportswear brand Lacoste is a business success story rarely told.
Unbeknown to most, the ubiquitous crocodile motif was once more likely to be associated with bargain buckets than high-quality, celebrity-endorsed merchandise.
Lacoste was the brainchild of tennis professional Rene Lacoste, nicknamed “The Crocodile” by fans due to his ferociousness on the courts. He was joined by designer Andre Gillier, who at the time was the president of the largest French knitwear manufacturing firm.
Claiming that the reptilian motif was the first example of a brand name appearing on the outside of an article of clothing, the company hit the ground running. Its jerseys were worn across North America, with the company licensing its products to almost every outlet and retailer that came its way.
But with stock rocketing and quality plummeting, Lacoste soon became a permanent feature of the ‘SALE’ rack, worn by the everyday white-collar worker, much less the middle-class gentleman it had intended to target.
According to Adweek, the brand had become a “running joke” among the aristocrats it greatly desired to be associated with.
The shock of its clothes being labelled ‘two for the price of one’ sparked the then-failing company’s board into life. It had one opportunity to turn Lacoste around before it was forever forgotten by the affluent. It was time to put purpose over profits.
Restructuring began in 1992. Lacoste was relaunched in the USA after withdrawing for two years. It planned to sell products in only high-profile stores and open luxury boutiques. Despite improvements, growth was modest and the company continued to struggle.
Ten years later in January 2002, the firm hired Robert Siegel as its new chief executive officer. The former Levi Strauss director was tasked with putting out the fires and inspiring the brand’s fickle audience to fall in love with Lacoste again.
Commenting on his decision to join the board in what looked like a career suicide mission, Mr Siegel said the brand had a secret weapon: heritage.
“It’s the real deal, it has a history,” said Mr Siegel, speaking to the media after joining the firm in 2002.
He was right. It took Mr Siegel just six months to lay the groundwork, revolutionising the brand’s design, retail and pricing strategy.
“The company at the time didn’t have the experience in this business that would have been allowing them to make what appeared to be tough decisions, and they were trying to be everything to everybody,” he said.
“I brought to the company a very clear direction and focus on who we should be, what kind of products we should have, who our target consumer was going to be, what our distribution strategy should be, how important retail would be to us-meaning our own retail stores-and quickly put into place a plan that really addressed each of those points.”
Mr Siegel withdrew products from even more stores, leaving “The Crocodile” in only premium premises, such as Macy’s, Bloomingdale’s and Nordstrom. The new CEO even kept a close eye on where Lacoste products were placed in relation to other brands.
Drastic changes were also observed within its flagship boutiques. “We wanted to go young and modern, we wanted to be aspirational,” said Mr Siegel, as walls were painted bright white and shelves were decluttered.
Respectively, the brand’s target market was refined. Pursuing only 18-to-34-year-olds, Mr Siegel said he wanted the brand shown in “the right movies” and “the right kind of magazines”. According to AdAge, the company spent close to $6 million on advertising in 2005 – triple the $2 million spent in 2004.
“Overexposure is really, really dangerous for any brand, and that’s how we keep our cool factor-by just being conscious of that,” Mr Siegel added.
Consequently, quality improved and the price followed. Reports suggest that Lacoste polo shirts were retailing for an indulgent $69 until 2005.
The turnaround was momentous. Sales shot up by 70 per cent in the USA alone, with the brand making its luxury presence known from west to east. Accessories, such as sunglasses, luggage and fragrance, now contributed to over 40 per cent of sales, compared to just eight per cent in 1997.
Nowadays, Lacoste – still family-owned – sells 50 million products across 110 countries worldwide, having represented tennis stars Andy Roddick, Richard Gasquet and Novak Djokovic to name just a few.
Despite global success, the brand has retained purpose. Speaking in a recent interview, now-CEO of Lacoste North America Joelle Grunberg said premium partnerships and fashions shows are a core component of the brand’s marketing strategy.
“It’s important for us to do two to three collaborations a year. It’s not that people don’t know us, but these partnerships bring something different to the table that’s difficult for us to do by ourselves,” she said.
Chasing the millennial market, Lacoste has also embraced social media to boost brand visibility and engage the next generation.
“Instead of focusing on promoting products and driving sales through social platforms such as Instagram, the label has focused its strategy on telling the stories behind its products through producing beautiful and engaging videos and artistic animations, which are published across its social media channels,” says market analyst Natalie Yiassoumi, of Launch Metrics.
Importantly, the brand vowed to never stand still again. As Mr Siegel said in 2006, Lacoste continues to reinvent itself.
 

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