What's going on?

It wasn�t exactly Polo In The Park as Ralph Lauren, the upmarket clothing brand, saw its stock drop as much as 10% on Tuesday after its CEO unveiled his turnaround vision for the company (although it did rebound to close down only about 2%).

What does this mean?

Ralph Lauren has struggled as clothing businesses face an industry-wide slowdown. Last year, its founder, Ralph Lauren himself, stepped down from the CEO role and installed Stefan Larsson as CEO (he was the head of Gap�s Old Navy division and a former executive of �fast fashion� retailer H&M). On Tuesday, Larsson outlined a plan to cut costs, make its supply chain more efficient and re-focus on the company�s three core brands (Ralph Lauren, Polo and Lauren � yes, we thought they were all the same thing too, but they are apparently not�).

Why should I care?

For the stock: The plan is to get more exclusive � and more expensive. Revenue this year is set to decline at least 10% versus last year as the cost of selling existing inventory, letting workers go and closing stores takes its toll. In the longer term, Larsson�s plan calls for Ralph Lauren�s products to be more selectively distributed and subject to fewer discounts. In other words, he�s going to sell less clothing but try to draw on the strength of Ralph Lauren�s brands to charge more for their products � which, he hopes, will lead to more profitable sales growth.

The bigger picture: Fashion brands might be in a better position than retailers. If you�re a Ralph Lauren aficionado, do you really care where you buy your Ralph Lauren swag? Probably not. But you still want to buy Ralph Lauren. So, in theory, a strong brand can command a premium price regardless of the fact that retailers, like Macy�s and Nordstroms, are struggling. Such retailers are, arguably, merely a platform for selling brands. And it�s probably easier for online retailers (like Amazon) to take over the platform than it is for them to replace an established brand like Ralph Lauren.