Preppy people are abandoning one of their cornerstone brands

Retail earnings roundup

Ralph Lauren is struggling.

Sales were down in its most recent quarter. Retail revenue dipped 3%, consolidated comparable sales declined 6% on a reported basis, and wholesale revenue declined 5% — something that shouldn't be too surprising, considering how many department stores — from Macy's to Nordstrom — have reported negative comparable sales in recent quarters.

And, as Bloomberg's Kim Bhasin has pointed out, it is losing its positioning with preppy shoppers.

Here are three reasons Ralph Lauren is losing its status.

1. Macy's

Macy's has become notorious for messy stores and discounted apparel, which doesn't help luxury brands who sell products there.

"While RalphLauren has representation in stores like Macy's the fact that its sales areas look like a flea-market do nothing to help the brand or its revenues. This is further exacerbated by the generally weak customer traffic at department stores across the past few months," Håkon Helgesen, retail analyst at consulting firm Conlumino, wrote in a note to clients.

"In our view, decisive action is needed to put the brand on the right track. This includes withdrawing from department stores like Macy's which, in our view, are now actively damaging the RalphLauren brand, and focusing only on more upscale department stores like Nordstrom and Neiman Marcus as sales channels," he wrote.

Macy's is working to fix its problems; it is currently eliminating about 100 of its own stores.

See the struggling department stores of 2016 below:

Struggling department stores of 2016
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Struggling department stores of 2016
TORONTO, ONTARIO, CANADA - 2016/03/08: Sears store entrance, is an American chain of department stores. Known for selling high quality clothing article from shoes to shirts. (Photo by Roberto Machado Noa/LightRocket via Getty Images)
Macy's Inc. signage is displayed at a department store in New York, U.S., on Monday, Feb. 22, 2016. Macy's Inc., the largest U.S. department-store company, is scheduled to report fourth-quarter 2015 earnings before the opening of U.S. financial markets on February 23. Photographer: Michael Nagle/Bloomberg via Getty Images
J.C. Penney Co. signage is displayed outside of a store at the Gateway Shopping Center in the Brooklyn borough of New York, U.S., on Saturday, Aug. 8, 2015. J.C. Penney Co. is scheduled to release earnings figures on Aug. 14. Photographer: Michael Nagle/Bloomberg via Getty Images
UNITED STATES - JUNE 09: Customers enter the Dillards department store at Parkdale Mall, in Beaumont, Texas, Wednesday morning, June 9, 2004. A judge declared a mistrial in a lawsuit brought against Dillard's Inc. by 17 black shoppers in Texas who claimed that security guards at the department store chain harassed them because of their race. (Photo by Scott Eslinger/Bloomberg via Getty Images)
MIAMI, FL - APRIL 19: A Nordstrom sign is seen outside a store on April 19, 2016 in Miami, Florida. Nordstrom on Monday said in a cost-cutting measure they are expecting to lay off 350 to 400 people. (Photo by Joe Raedle/Getty Images)
The sign outside the Kmart store is seen in Broomfield, Colorado November 19, 2009. Sears Holdings Corp posted a narrower-than-expected quarterly loss November 19, 2009, helped by the first increase in same-store sales at its Kmart unit in four years. REUTERS/Rick Wilking (UNITED STATES BUSINESS)

2. Preppy people have new brands to buy

Helgesen points to Vineyard Vines an example of a preppy brand that has captured consumers.

The company uses real people in its catalogs, as opposed to models. Its strategy is paying off. In May,Reuters had reported that the company was looking to sell a stake to Goldman Sachs in May, which would make it worth $1 billion. When Business Insider spoke to the brand, they declined to comment on those financials.

Bhasin points to Smathers & Branson and Southern Tide as two other up-and-coming preppy brands that have managed to capture consumers.

3. It isn't relevant to young consumers

Helgesen likens Ralph Lauren's woes to those of Tiffany & Co., another brand that has struggled to be relevant to young consumers who demand speed and newness.

"Reconnecting with younger consumers is also a priority. Rather like Tiffany, RalphLauren is seen as an older, established brand that, while not actively disliked, is less relevant than it was a generation ago. Spin-offs like Club Monaco and RRL have helped to remedy this, but the company needs to put more energy and effort around extending and expanding their reach," he wrote.

The company does have someone with experience with designing for the budget-conscious fast fashion crowd. This past fall, it tapped Stefan Larsson, who helped lead Old Navy through a revival (before it tumbled again — though comparable sales were flat for the second quarter of fiscal 2016) and also worked at H&M, to be its CEO following Ralph Lauren himself stepping down.

Larsson says the brand is working on fixing its problems.

"So the core for us is what we have been known for which is classic, iconic style, and how you will see that refocus and evolving the core, the work that we're doing, how you will see that is that you will gradually see it in spring 2017 and then gradually season by season you will see the core being focused on in terms of, we will make sure that we have an updated classic, iconic style that has an effortless twist that makes it current today," Larsson said on a recent earnings call.

In June, the brand announced that it would be closing 50-plus stores and laying off about 8% of its workers.

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See Also:
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We went to Macy's and saw how the brand is neglecting stores
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SEE ALSO: ​​​​Move over, millennials — here's where the young consumers of Generation Z are spending their money

RELATED: Favorite retail brands by millennials in 2016:

Millennials' favorite retail brands
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Millennials' favorite retail brands
24. Levi's

23. Calvin Klein

Photo via Getty

22. Ralph Lauren

21. Michael Kors

Photo via Getty

20. Walmart

Photo via Shutterstock

19. Macy's
18. Vans

17. Old Navy

Photo via Shutterstock

16. Converse

15. Adidas

Photo via Shutterstock

14. Gap

13. Under Armour

Photo via Getty

12. Bath & Body Works

Photo via Getty

11. Nordstrom

10. Target

Photo via Alamy

9. Urban Outfitters 
8. J.Crew
7. H&M

6. Sephora

Photo via Shutterstock

5. Lululemon

Photo via Getty

4. Zara

Photo via Getty

3. Forever 21

Photo via Shutterstock

2. Victoria's Secret

Photo via Getty

1. Nike

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