Ralph Lauren, the quintessential American designer who built a fashion empire based on sweeping fantasies of country-club prep and the Wild West, is stepping down from his post as chief executive of the company.

Taking the helm at Ralph Lauren is Stefan Larsson, a former H&M executive and president of Old Navy, Gap’s down-market brand, which he is credited with reviving. Old Navy has consistently been one of the few bright spots in Gap’s brand portfolio since Larsson, who is Swedish, took over in 2012, making him one of the most visible executives in retailing.

The change may be viewed as a move by Ralph Lauren to get its financial house in order. Earnings at the upscale apparel company, known for its Polo brand, have been pressured by a strong dollar and intense competition in the luxury space. Its latest quarterly earnings of $1.09 a share topped analyst estimates, but revenue dipped 5.3 percent on a year-over-year basis. The company’s share price has slumped by almost half this year.

In an interview, Lauren, 75, said he intended to remain active at the company he founded almost a half-century ago in roles as executive chairman and chief creative officer. Larsson will report to Lauren, though Lauren characterized their relationship as a “partnership.”

“When they start designing things I can’t understand, I’ll quit,” Lauren said, sitting with Larsson at his side at his offices on Madison Avenue, adorned with the rustic paraphernalia — a tin toy robot, cowboy boots — that Ralph Lauren’s stores have come to be known for.

“But I don’t feel like I’m stepping back now,” Lauren said.

Still, Larsson’s appointment is the start of a succession at one of America’s best-known fashion houses, which, together with the likes of Donna Karan and Calvin Klein, helped put American style on the map.

And it is the coming end of a golden era of American postwar designers: Ms. Karan stepped down from the helm of the house that bears her name this year; Mr. Klein stepped away from his namesake company in 2002.

Larsson, 41, will take over as chief executive of the Ralph Lauren Corporation in November, and will also join the company’s board.

“One of the biggest reasons for me to join is the opportunity to work side by side with someone like Ralph,” Larsson said.

Most successful fashion brands are stories of two partners — Yves Saint Laurent and Pierre Bergé, Calvin Klein and Barry Schwartz, Valentino and Giancarlo Giammetti, even Giorgio Armani and Sergio Galeotti. (Armani took over as chief executive after Galeotti died.)

Lauren was the rare designer who could do both. Previously, he had a “partner” in Roger Farah, former chief operating officer and president who retired in 2013. Mr. Farah was succeeded by Jackwyn Nemerov, another respected executive whose tenure nevertheless coincided with sluggish sales, despite steep promotions.

But Lauren’s decision to award Larsson the title of chief executive indicates that he, at least, feels it is still important to separate the roles and have a professional manager running the brand and reassuring Wall Street. Mr. Lauren is still the largest individual shareholder in his company, and is likely to have a hand in any major decisions.

Investors cheered the move, sending the stock as much as 5 percent higher in after-hours trading. The question of who might succeed Mr. Lauren after 48 years at the company’s helm had cast uncertainty over plans for the future. Mr. Lauren’s son, David, is on the board of directors and heads the company’s advertising and marketing divisions.

Asked on Tuesday whether Larsson would be a good successor, Lauren replied, “I would say so.”

Still, an appointment of a new chief executive from outside the company surprised some industry experts.

“Ralph Lauren has been a poster child of stability and has historically grown talent from within,” said William Susman, managing director at Threadstone Partners, an advisory firm that focuses on the retail sector. “Bringing in Stefan must be a reflection of the need for new thinking.”

Ralph Lauren would benefit from change, experts say. Lauren’s most recent show at New York Fashion Week was an ode to Americans in Biarritz, with his signature perfect leather tailoring, blue and white evening gowns, and stars in the front row (Jessica Chastain, Julianne Moore). But his brand has a typical luxury pyramid structure, the model for both Calvin Klein and Michael Kors, with luxury at the pinnacle casting an aspirational halo over the more accessible Polo Ralph Lauren line. Factory stores below that form the bulk of the profits.

Given Larsson’s track record in “fast fashion,” the question is whether the company will now take a different tack. Recent moves at the company, like separating out its luxury business, hiring the luxury executive Valerie Hermann and opening a lavish private members’ club in Milan, had suggested a stronger focus on luxury at the apparel company.

Larsson has made his name in budget-conscious mass-retailing, first at H&M and then at Old Navy. Though even at those mass brands, Larsson’s success, experts say, has been built on fostering a level of attention to design that sellers of low-end, family-oriented apparel had previously not put into their wares.

Whether or not changes lie ahead for the company, it is a big moment for a fashion house that Lauren began in the streets of New York, selling ties out of rented drawer space in a closet of an office in the Empire State Building. Now, on top of its men’s and women’s clothing lines, Ralph Lauren has a foothold, through licensing, in everything from cosmetics to leather goods, to footwear and eyeglass frames. The company logged sales of $7.6 billion in its last fiscal year.

Lauren’s success has made him a rich man. Though he remains a top shareholder, Lauren has sold off parts of his stake over the years. Just last week, he sold 50,000 Ralph Lauren shares, according to a filing with the Securities and Exchange Commission, worth some $5.6 million.

Susman of Threadstone said that Ralph Lauren clearly wanted to incorporate some elements of fast fashion, given Larsson’s success in that arena. Larsson will also help Ralph Lauren bolster its international presence, which has become critical as the United States market has become saturated, Susman said.

But he said that he did not expect Ralph Lauren to step away from building up the luxury side of the business.

“I don’t envision that would change,” he said. “And they still have Ralph Lauren to handle it.”

Lauren spoke of the unlikely match between his world of aspirational luxury, and that of Larsson’s, in mass retailing. A Ralph Lauren board member had spoken gushingly about a rising star in fashion, and recommended Mr. Lauren meet him.

“So I said, ‘Where’s he from?’ And they told me: ‘Old Navy and H&M.’ I said: ‘Why would I be looking for that? We’re building a great luxury company.’ ”

Even as the two met for a private dinner in New York, Mr. Lauren said, “I was thinking to myself: ‘Why am I here? It’s a waste of time.’ ”

That feeling of initial unease was mutual, Larsson said. “I was hesitating. Why was he interested in speaking with me?” Larsson said.

But the two hit it off.

“I interviewed lots of people who were in luxury. But Stefan has a great quality that made me say: ‘You can be my new C.E.O.,’ ” he said. “He’s unique as a man, a man who’s capable of building businesses and growing companies, but at the same time he’s sensitive to people’s feelings.”

And was there really something that Ralph Lauren could learn from H&M or Old Navy?

“If I thought there was nothing I could learn from Stefan,” Lauren said, “he would not be here.”

(NY Times)