Ralph Lauren serves up some beef

June 27, 2014

It’s no secret that Ralph Lauren (the man) has a fabulous ranch near Telluride, CO. The Double RL ranch has been mentioned in Ralph Lauren (the company’s) 10-Ks since 2010 and has been celebrated by the likes of Oprah, who in this 4+ minute video of her visit to the ranch, is positively bubbly.

We mention this because in the proxy that Ralph Lauren Corp. filed yesterday, there was a new and interesting disclosure about that ranch near the bottom of pg. 88, that we doubt most people caught. Here’s the disclosure:

In connection with our adoption of the “RRL” trademarks, pursuant to an agreement with us, Mr. R. Lauren retained the royalty-free right to use as trademarks “Ralph Lauren,” “Double RL” and “RRL” in perpetuity in connection with, among other things, beef and living animals. The trademarks “Double RL” and “RRL” are currently used by the Double RL Company, an entity wholly owned by Mr. Lauren…In Fiscal 2014, the total aggregate amount for transactions relating to the sale of beef from Mr. R. Lauren’s Double RL Company to the Company was approximately $137,749.”

It’s the last part of the disclosure that’s new.  The company doesn’t provide any additional details, but presumably this was beef sold to the company’s two restaurants — one in Chicago and a second in Paris. Talk about vertical integration!

While we recognize that a $137K disclosure for a company whose revenues were $7.4 billion is essentially chump change, we’re always interested when companies disclose something new for the first time. After all, the Chicago restaurant has been around for 15 years now and the Paris restaurant for nearly four. Yet there’s been no similar disclosures in prior filings, which means the $137K must have met some sort of threshold test.

While Ralph Lauren stock has lost about 9% over the past six months, it’s clearly done well by investors over the long term, which may be why investors have been willing to overlook some of the related party transactions, many of which we’ve noted over the years (see here and here, for example).

The proxy also had several other interesting disclosures in them, which are available exclusively to footnotedPro subscribers.

Posted in: Disclosures

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Companies Mentioned: Ralph Lauren Corporation,
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