Ralph's Rough Ride

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Lauren has always had the ability to move with his mostly boomer customers, and that skill is now getting a crucial test. When sportswear exploded, he created Polo Sport. Designer jeans? Ralph was big. When value was king, he offered the lower-priced Chaps line. His recent custom-made Purple Label commands some $2,500 for a man's suit. (Now there's something Wall Streeters should warm to.) "My job is to feel the changing times," he says.

This kudzu-like spreading of the brand, however, does carry some risk of diluting the Ralphness of it all. For yesterday's would-be Wasp, the Ralph Lauren brand signified something very clear. What is today's consumer to make of a brand comprising everything from silverware to biking gear? "His clothes are losing their historic reference points," says David Wolfe, creative director of the Doneger Group, a retail consultant. "He's not building a myth anymore."

Lauren plans to test his mythic chic with several new lines targeted directly at Generations X and Y, that $250 billion demographic of teens and twentysomethings who are increasingly driving the fashion marketplace. There Polo/RL has to fight with Hilfiger, Abercrombie & Fitch and a host of upstart brands. It's a battle in full swing. "Polo's kind of peaked," says Robert Tucker, 21, a bike messenger in New York City; "the thing right now is Pelle Pelle," an urban street-wear label. "Polo's not yesterday's brand at all," counters Nicole DeMers, 15, of Incline Village, Nev. "Certain groups wear it--the more preppie groups." For the latter, Lauren is launching Ralph, a women's line (jackets priced at about $150) aimed at 15- to 25-year-olds.

Far more ambitious is RLX, an extreme-sportswear brand for mountain bikers, runners and snowboarders. The brightly colored technical gear is a departure from the subtle tweeds and twills of Polo's yore. Lauren has taken great pains to establish RLX's credibility. The running shoes are made by Reebok; he's sponsoring a mountain-biking team, and has signed prominent snowboarders Ross Powers and Andy Hetzler. It's smart marketing, but he won't necessarily be able to buy credibility in the world of alternative sports, where shunning the Establishment is at least half the point. "Lame," critiques snowboarder Dave Solomon at the University of California, Berkeley.

Lauren has heard that kind of smug remark before, three or four Bugattis and a couple of hundred million dollars ago. The company has strengths galore: fine products, solid licensing revenue, a strong share in established markets. And it has something nobody else does: a visionary, driven CEO with his name on the door, who takes the declining share price as a personal affront. "I was 6 ft. 6 in. when this started," he jokes, stretching his 5-ft. 6-in. frame out of the chair. "I've led this company, and I've done it my own way for years and years. I've built something here, and I've got a lot more to build. I bet on myself, I bet on this company." Give him this much: so far, that's been a pretty good wager.