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Polo Ralph Lauren and NBC Tackle Online Apparel

By Rob Spiegel
Feb 7, 2000 12:00 AM PT

Apparel giant Polo Ralph Lauren (NYSE: RL) announced an agreement today with NBC affiliates ValueVision (Nasdaq: VVTV) and NBCi (Nasdaq: NBCI) to create a multimedia initiative that will center on its Polo.com Internet retailing site.

Polo Ralph Lauren and NBC Tackle Online Apparel

NBCi will give the new Ralph Lauren Media venture anchor status on its Snap.com site, while shopping network ValueVision will provide fulfillment, distribution and customer service.

Polo.com will launch in the fourth quarter of 2000 with an assortment of men's, women's and children's apparel and related products across the Ralph Lauren and Polo brands.

Internet Apparel Takes a Bumpy Ride

Although the online apparel sector has experienced mixed results at best, strong brands have fared better than lesser known companies -- giving Polo.com an advantage in the sector. However, because customers of Polo.com will be able to return items to only 27 U.S. Polo Ralph Lauren brick-and-mortar locations, this support system may not be sufficient to satisfy customers.

"I think in the apparel industry, the bricks-and-clicks have a distinct advantage over the dot-coms," Blaine Mathieu, a senior analyst with the research firm GartnerGroup, told the E-Commerce Times. "In apparel, brand figures in heavily, and there's no question that having real stores for exchange is a great benefit."

NBC Relationship

Polo.com will launch via anchor tenancies on Snap.com and will receive promotions on CNBC and the ValueVision home shopping network. ValueVision will re-launch as Snap TV later this year.

ValueVision will also provide all customer service, distribution and fulfillment for Ralph Lauren Media on an exclusive basis. ValueVision will convert its existing 300,000 square foot Bowling Green, Kentucky distribution center into a dedicated facility for Polo.com.

"ValueVision's fulfillment capabilities will be a critical component driving the success of this venture," said Stuart Goldfarb, vice chairman of ValueVision.

Details of the Deal

Under the terms of the 30-year joint venture, Ralph Lauren will be 50 percent by owned by Polo Ralph Lauren, 25 percent by NBC, 12.5 percent by ValueVision, 10 percent by NBCi, and 2.5 percent by CNBC.com.

NBC will contribute $110 million (US$) of television and online advertising on NBC and CNBC.com properties. NBCi will contribute $40 million in online distribution and promotion, and ValueVision will contribute a cash funding commitment of $50 million.

The new company will be based in New York City and will be headed by Jeffrey D. Morgan, formerly worldwide publisher of Men's Health magazine.

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