"To head Lacoste was a dream come true. The brand is so powerful because of its heritage.
" 1
- Robert Siegel, CEO, Lacoste USA, in 2005.
Introduction
In the 1920s, René Lacoste (René), a French tennis champion,
created a white, short-sleeves tennis shirt for use on the tennis court.
The shirt instantly became a hit and revolutionized tennis fashion. Until
then, tennis players wore starched, long-sleeved shirts that were
made of woven fabric. In contrast, René's shirt was made of a more
comfortable, light cotton fabric called "jersey petit piqué". Later on,
René set up the company La Chemise Lacoste (LCL) and began
manufacturing and marketing these shirts under the brand name
'Lacoste'. The shirt had the logo of a green crocodile2 embroidered on
it. These shirts came to be known as 'polo shirts'.
Over the years, the Lacoste brand and its crocodile logo became synonymous with polo shirts, all over the world. The
Lacoste brand became established as a premium sportswear brand. When the Lacoste brand was introduced in the US
through a licensing agreement in the early 1950s, it quickly became popular, going on to become a premium sportswear
brand for men. In 1969, LCL sold its US rights to the Lacoste brand to General Mills 3 (GM). GM owned this brand until
the mid-1980s. Under GM, the brand began to lose its appeal and its premium brand image in the US.
In the early 1990s, LCL bought back the US rights to the brand and tried to restore
the brand's image in the US. However, by this time, the company was facing stiff
competition from other premium brands like Ralph Lauren. 4
In fact, the polo shirts created by Ralph Lauren had become more popular than the
Lacoste polo shirts. In 2001, Robert Siegel (Siegel) took over as the CEO of LCL's US
business, Lacoste USA. He undertook a variety of marketing initiatives which helped
re-establish Lacoste as a popular and youthful luxury brand in the US.
Background Note
The Lacoste brand and its famous logo were born in 1933, when René Lacoste
and André Gillier, the owner of a leading knitwear manufacturing firm in
France, set up the apparel company La Chemise Lacoste, and began
manufacturing white polo shirts embroidered on the chest with the picture of a
green crocodile. Reportedly, this was the first time that a brand name and logo
appeared on the outside of a garment. The Lacoste shirts became a part of popular
sportswear. Although, there was an interruption in the company's activities between
1940 and 1945 due to World War II, LCL resumed production of the shirts in 1946.
In the 1950s, LCL began exporting the shirts to overseas markets such as Italy and the US. In 1951, LCL introduced
colored polo shirts. Towards the end of the 1950s, the company also introduced a children's line of polo shirts. In 1960,
LCL launched striped polo shirts and shorts. LCL further expanded its operations in the international markets through
licensing agreements. In 1961, LCL signed a clothing manufacturing and distribution license in Spain....
Lacoste's US Journey
In 1951, DC and LCL entered into an agreement whereby DC agreed to market Lacoste polo shirts in the US. DC sold
the Lacoste polo shirts under the 'Izod Lacoste' label. Lacoste shirts were well received by American consumers and
became a big hit in the US market. The popularity of the shirts increased in the 1950s when Dwight Eisenhower, the
President of the US (1953-1961), was photographed playing golf in a Lacoste polo shirt with its crocodile logo. In 1966,
DC signed a licensing agreement with LCL to manufacture and market Lacoste shirts in the US.
Over the years, the sales of Lacoste polo shirts surged and 'Izod Lacoste' established itself as a premium sportswear
brand for men. However, the shirts also became more closely associated with Izod than with the Lacoste brand. In 1969,
GM acquired DC and thus acquired the license to the Lacoste brand and the crocodile logo. During the 1970s, GM
popularized the green crocodile logo by launching a range of clothing items like sweaters, jackets, ties, socks, etc.
Gradually, the Lacoste clothing line was extended to include womenswear and children's clothes as well.
However, the polo shirt with the green crocodile logo was still the Lacoste brand's flagship product, and it was still
perceived as menswear brand. Until 1975, GM imported Lacoste polo shirts from France. The shirts were made of fine
cotton with buttons made of mother of pearl. However, from 1975 onwards, GM started manufacturing the shirts in the
US and Asia, and the shirts were of poorer quality. Lacoste shirts were now made of a cotton/polyester blend, and their
design was different from the original Lacoste shirt...
Reviving The Lacoste Brand
Siegel, who was to be instrumental in establishing Lacoste as high-end fashion label in the US, took over as Lacoste
USA's CEO in January 2001.
He was earlier credited with creating and establishing the popular clothing brand, Dockers, for Levi Strauss & Co. in
1986.
Siegel intended to change the image of Lacoste as an older person's brand, and to make it more fashionable.
To begin with, he brought about changes in the Lacoste clothing line.
During the early 2000s, the vintage preppy look was coming back into fashion in the US. Siegel spotted an opportunity
in this, as Lacoste shirts went well with the 'preppy look'. With Lemaire, he came up with a new range of Lacoste
clothing that was more trendy and appealed to younger people, and also launched a new range of piqué polo shirts...
Lacoste's Retail Strategy
One of the reasons for Lacoste's 'cheap brand' tag in the US was its over-exposure in the market. During the 1980s,
Lacoste was available at non-luxury retailers like T.J. Maxx, Macy's, etc. When, LCL took over the brand, it restricted
its availability to luxury department stores.
When Siegel arrived at Lacoste USA, the brand was available in around 11 departmental stores and the few Lacoste
boutiques in the US. Siegel then decided to expand Lacoste's retail presence.
But since he wanted to popularize the Lacoste brand as a fashion label, it was important that it was sold only at
upscale department stores and specialty boutiques. Said Tamara Rosenthal (Rosenthal), director of marketing,
Lacoste USA, on the significance of specialty retail stores, "They have the ability to seed the brand with influencers,
because the type of people shopping in those stores are setting trends."
Lacoste's Promotional Strategy
Promotion played a major role in enhancing the brand value of Lacoste in the US. The company emphasized product
placement in popular movies and TV shows, as they influenced the fashion choices of young people to a great extent.
Lacoste USA set up a special division called Propaganda Entertainment Marketing in Los Angeles, which worked
towards getting permission from movie studios for product placements. Lacoste shirts were worn on-screen by
popular movie and TV stars like Gwyneth Paltrow in the movie The Royal Tenenbaums, Lindsay Lohan in Mean Girls,
Mathew Broderick in The Stepford Wives, and the cast of the popular TV show, The O.C. Lacoste USA also
sponsored the premiere of the movie Garden State, in 2004, which featured Natalie Portman, a popular actress. The
company also offered free Lacoste clothing to celebrities and popular figures.
Analysts commented that Lacoste USA had managed to become a 'Hollywood favorite'. Siegel believed that
endorsements by popular movie stars helped Lacoste keep the brand 'hip and relevant' in the market. Commenting on
this strategy, Rosenthal said, "If you say you're cool, you're not. It's a property that needs to be demonstrated. We
would gift product to some celebrities and then we'd literally see them wearing it in magazines." She said, "That works
really well because we know the product is going directly to them. It's worth it to us. Celebrity endorsement is huge in
the fashion industry."
Outlook
In February 2006, the BusinessWeek reported that Lacoste USA's sales had soared 1000% in the past five years. As
a result, the US became one of the largest and most profitable markets for Lacoste. This success was largely
attributed to the initiatives taken by Siegel to improve the performance of Lacoste USA.
Lacoste USA had also managed to attract more female buyers. In early 2006, 55% of Lacoste USA's consumers were
male and 45% female. Further, it was reported that Lacoste USA's sales from women's wear accounted for one third
of the total sales of the company, whereas in the 1990s, it had accounted for only around seven percent.
