Business

Fashion victim

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Back in June, a payday of nearly $1 billion for Ralph Lauren seemed like a lot of money.

However, less than six months after the legendary designer executed a $955 million stock sale for estate-planning purposes, shares of his New York-based fashion empire Polo Ralph Lauren are up nearly 30 percent.

As of yesterday — when the company’s shares surged to an all-time intraday high of $109.28 and closed 7.3 percent higher at $108.28 after better-than-expected quarterly earnings — the Bronx-born haberdasher, 70, had left more than $250 million on the table, according to securities filings.

And despite the recent gains, the big rally in Polo shares isn’t over, according to Omar Saad, a retail analyst at Credit Suisse.

“Even with the stock breaking out to new highs today, we strongly believe Ralph Lauren is just beginning to enter the sweet spot of a new global growth cycle,” Saad said.

His big stock sale in June notwithstanding, Lauren is secure at the company he founded in 1967, as his family controls more than 93 percent of its preferred voting shares.

For the quarter ended Oct. 2, net income rose 16 percent to $205.2 million, or $2.09 a share, from $177.5 million, or $1.75 a share, a year earlier. Analysts had been expecting earnings of just $1.68 a share.

Sales surged 11 percent to $1.53 billion, fueled by strong purchases by department stores in the US and Europe. Both revenue and margins are benefiting from fewer markdowns, executives said.

While investors have fretted over the company’s investments as it expands into new markets like Asia, that spending “is now really starting to pay off,” according to Saad, the retail analyst.

In addition to strong demand abroad for Ralph Lauren clothing and accessories, the company’s results are beginning to reflect a more efficient operation, the analyst said.