SEC Filing | Ralph Lauren Corporation

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Filed Pursuant to Rule 424(b)(1)
Registration No. 333-24733

29,500,000 SHARES
[POLO RALPH LAUREN CORPORATION LOGO]
CLASS A COMMON STOCK
(PAR VALUE $.01 PER SHARE)
------------------------

Of the 29,500,000 shares of Class A Common Stock offered, 23,500,000 shares
are being offered hereby in the United States and 6,000,000 shares are being
offered in a concurrent international offering outside the United States. The
initial public offering price and the aggregate underwriting discount per share
will be identical for both Offerings. See "Underwriting".

Of the 29,500,000 shares of Class A Common Stock offered, 9,400,000 shares
are being sold by the Company and 20,100,000 shares are being sold by the
Selling Stockholders. See "Principal and Selling Stockholders". The Company will
not receive any of the proceeds from the sale of the shares being sold by the
Selling Stockholders. Mr. Ralph Lauren, a Lauren Family Trust, and the GS Group,
consisting of affiliates of Goldman, Sachs & Co., are Selling Stockholders. Mr.
Lauren will receive approximately $162.2 million of the gross proceeds from the
sale of shares of Class A Common Stock in the Offerings, the payment by the
Company of a dividend to Mr. Lauren and the repayment of certain indebtedness
owed to Mr. Lauren and related entities. A Lauren Family Trust will receive
approximately $351.0 million of the gross proceeds from the sale of shares of
Class A Common Stock in the Offerings. The GS Group will receive approximately
$76.5 million of the gross proceeds from the sale of shares of Class A Common
Stock in the Offerings, and the repayment of certain indebtedness owed to the GS
Group. Distributions to be made to the existing stockholders of all
undistributed earnings of the Operating Partnerships are expected to be in
excess of such stockholders' tax liabilities with respect to such entities. See
"Use of Proceeds", "Certain Relationships and Related Transactions" and
"Principal and Selling Stockholders".

Each share of Class A Common Stock and Class C Common Stock entitles its
holder to one vote, whereas each share of Class B Common Stock entitles its
holder to ten votes. All of the shares of Class B Common Stock are held by
Lauren Family Members. After consummation of the Offerings, Lauren Family
Members will beneficially own shares of Class B Common Stock having
approximately 89.8% of the outstanding voting power of the Company's Common
Stock.

Prior to the Offerings, there has been no public market for the Class A
Common Stock. For factors considered in determining the initial public offering
price, see "Underwriting".

SEE "RISK FACTORS" BEGINNING ON PAGE 15 FOR CERTAIN CONSIDERATIONS RELEVANT
TO AN INVESTMENT IN THE CLASS A COMMON STOCK.

The Class A Common Stock has been approved for listing, subject to notice of
issuance, on the New York Stock Exchange under the symbol "RL".
------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------

INITIAL PUBLIC UNDERWRITING PROCEEDS TO PROCEEDS TO SELLING
OFFERING PRICE DISCOUNT(1) COMPANY(2) STOCKHOLDERS
-------------------- -------------------- -------------------- --------------------
Per Share................... $26.00 $1.43 $24.57 $24.57
Total(3).................... $767,000,000 $42,185,000 $230,958,000 $493,857,000

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(1) The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933. See "Underwriting".

(2) Before deducting estimated expenses of $5,000,000 payable by the Company.

(3) The Company and a Selling Stockholder have granted the U.S. Underwriters
options for 30 days to purchase up to an additional 3,525,000 shares of
Class A Common Stock at the initial public offering price per share, less
the underwriting discount, solely to cover over-allotments. Additionally,
the Company and a Selling Stockholder have granted the International
Underwriters similar options with respect to an additional 900,000 shares as
part of the concurrent international offering. If such options are exercised
in full, the total initial public offering price, underwriting discount,
proceeds to Company and proceeds to Selling Stockholders will be
$882,050,000, $48,512,750, $274,446,900 and $559,090,350, respectively. See
"Underwriting".
------------------------

The shares offered hereby are offered severally by the U.S. Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to their
right to reject any order in whole or in part. It is expected that certificates
for the shares will be ready for delivery in New York, New York, on or about
June 17, 1997, against payment therefor in immediately
available funds.

GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
MORGAN STANLEY DEAN WITTER
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The date of this Prospectus is June 11, 1997.
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[PHOTOS OF MODELS, PRODUCTS AND STORES.]
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No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, and, if given or
made, such information or representations must not be relied upon as having been
authorized. This Prospectus does not constitute an offer to sell or the
solicitation of an offer to buy any securities other than the securities to
which it relates or an offer to sell or the solicitation of an offer to buy such
securities in any circumstances in which such offer or solicitation is unlawful.
Neither the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstances, create any implication that there has been no change in the
affairs of the Company since the date hereof or that the information contained
herein is correct as of any time subsequent to its date.
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TABLE OF CONTENTS

Special Note Regarding Forward- Looking
Statements.......................... 4
Prospectus Summary.................... 5
Risk Factors.......................... 15
Reorganization and Related
Transactions........................ 22
Use of Proceeds....................... 24
Dividend Policy....................... 25
Capitalization........................ 26
Dilution.............................. 27
Selected Combined Financial Data...... 29
Unaudited Pro Forma Combined Financial
Information......................... 30
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 33
Business.............................. 41
Management............................ 65
Certain Relationships and Related
Transactions........................ 79
Principal and Selling Stockholders.... 83
Description of Capital Stock.......... 84
Shares Eligible for Future Sale....... 91
Legal Matters......................... 92
Experts............................... 92
Additional Information................ 93
Index to Combined Financial
Statements.......................... F-1
Underwriting.......................... U-1

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CERTAIN PERSONS PARTICIPATING IN THE OFFERINGS MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE CLASS A COMMON
STOCK, INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN
SUCH SECURITIES, AND THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE
OFFERINGS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING".
------------------------

Through and including July 6, 1997 (the 25th day after the date of this
Prospectus), all dealers effecting transactions in the Class A Common Stock,
whether or not participating in this distribution, may be required to deliver a
Prospectus. This is in addition to the obligation of dealers to deliver a
Prospectus when acting as Underwriters and with respect to their unsold
allotments or subscriptions.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Prospectus includes forward-looking statements, including statements
regarding, among other items, (i) the Company's anticipated growth strategies,
(ii) the Company's intention to introduce new products and enter into new
licensing alliances, (iii) the Company's plans to open new retail stores, (iv)
future expenditures for capital projects, and (v) the Company's ability to
continue to maintain its brand image and reputation. These forward-looking
statements are based largely on the Company's expectations and are subject to a
number of risks and uncertainties, certain of which are beyond the Company's
control. Actual results could differ materially from these forward-looking
statements as a result of the facts described in "Risk Factors" including, among
others, (i) changes in the competitive marketplace, including the introduction
of new products or pricing changes by the Company's competitors, and (ii)
changes in the economy. The Company undertakes no obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. In light of these risks and
uncertainties, there can be no assurance that the forward-looking information
contained in this Prospectus will in fact transpire.

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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements and the notes thereto contained elsewhere
in this Prospectus. Unless otherwise indicated, the information in this
Prospectus (i) gives effect to the Reorganization and Trademark Acquisition (as
defined in "-- Reorganization and Related Transactions") and (ii) assumes the
Underwriters' over-allotment options are not exercised. As used in this
Prospectus, references to the "Company" or "Polo" mean Polo Ralph Lauren
Corporation, after giving effect to the Reorganization, including the transfer
of certain assets and interests in related entities to Polo Ralph Lauren
Corporation, as if the Reorganization had occurred at the beginning of the
periods discussed and presented herein. See "Reorganization and Related
Transactions". The Company utilizes a 52-53 week fiscal year ending on the
Saturday nearest March 31. Accordingly, fiscal years 1993, 1994, 1995, 1996 and
1997 ended on April 3, 1993, April 2, 1994, April 1, 1995, March 30, 1996 and
March 29, 1997, respectively. References to licensing partners' wholesale net
sales have been derived from information obtained from the Company's licensing
partners. Due to the collaborative and ongoing nature of the Company's
relationships with its licensees, such licensees are referred to in this
Prospectus as "licensing partners" and the relationships between the Company and
such licensees are referred to in this Prospectus as "licensing alliances".
Notwithstanding these references, however, the legal relationship between the
Company and its licensees is one of licensor and licensee, and not one of
partnership.

THE COMPANY

Polo Ralph Lauren Corporation ("Polo" or the "Company") is a leader in the
design, marketing and distribution of premium lifestyle products. For 30 years,
Polo's reputation and distinctive image have been consistently developed across
an expanding number of products, brands and international markets. The Company's
brand names, which include "Polo", "Polo by Ralph Lauren", "Polo Sport", "Ralph
Lauren", "RALPH", "Lauren", "Polo Jeans Co." and "Chaps", among others,
constitute one of the world's most widely recognized families of consumer
brands. Directed by Ralph Lauren, the internationally renowned designer, the
Company believes it has influenced the manner in which people dress and live in
contemporary society, reflecting an American perspective and lifestyle uniquely
associated with Polo and Ralph Lauren.

The Polo brand was established in 1967 when Mr. Lauren introduced a
collection of men's ties. In 1968, Polo was established as an independent
menswear company offering a line of premium quality men's clothing and
sportswear with a distinctive blend of innovation and tradition. The Company's
now famous polo player astride a horse logo and Ralph Lauren womenswear products
were introduced in 1971. In that same year, the first in-store area dedicated
exclusively to Polo Ralph Lauren products ("shop-within-shop boutique") opened
in Bloomingdale's flagship store in New York City and the first Polo store was
opened by an independent third party. See "Business -- Operations -- Domestic
Wholesale and Home Collection Customers and Service -- Shop-within-Shop
Boutiques". Commencing in 1973, womenswear products were produced and
distributed by a third party under the Company's first licensing alliance. From
these beginnings, the Polo and Ralph Lauren brands have been the foundation upon
which the Company has based its historic growth. The Company's net revenues,
which are comprised of wholesale and retail net sales and licensing revenue,
have increased from $767.3 million in fiscal 1993 to $1.2 billion in fiscal
1997, and the Company's income from operations has grown from $82.1 million in
fiscal 1993 to $157.4 million in fiscal 1997.

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(including handbags and luggage). Fragrance and skin care products are sold
under the Company's Polo, Lauren, Safari and Polo Sport brands, among others.
See "Business -- Operations -- Licensing Alliances". Worldwide wholesale net
sales of all products bearing the Company's brands, generated by both Polo and
its licensing partners, aggregated approximately $2.9 billion in fiscal 1997 and
are displayed in the chart below. Of these sales, approximately 31% occurred
outside the United States.

FISCAL 1997 WORLDWIDE WHOLESALE NET SALES OF
POLO RALPH LAUREN PRODUCTS(1)(2)
(IN MILLIONS)

[Pie chart depicting worldwide wholesale net sales of all products bearing the
Company's brands, generated by both Polo and its licensing partners during
fiscal 1997 including: Menswear, $1,411 million (48.4%), Womenswear, $476
million (16.3%), Children's Apparel, $145 million (5.0%), Accessories, $282
million (9.7%), Fragrances, $275 million (9.4%) and Home Collection, $326
million (11.2%).]

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(1) Wholesale net sales for products sold by the Company's licensing partners
have been derived from information obtained from such licensing partners.

(2) Includes transfers of products to the Company's wholly owned retail
operations at wholesale prices or, in the case of outlet stores, at cost.

Polo's business consists of four integrated operations: wholesale, Home
Collection, direct retail and licensing alliances. Wholesale operations
primarily consist of the design, sourcing, marketing and distribution of
menswear under the Polo by Ralph Lauren, Polo Sport, Polo Golf and Ralph
Lauren/Purple Label brands and of womenswear under the Ralph Lauren Collection
and Collection Classics, RALPH and Ralph Lauren Polo Sport brands. See
"Business -- Operations -- Wholesale". The Home Collection division designs,
markets and sells home products under the Company's brands for its 13 home
licensing partners from whom the Company receives royalties. See
"Business -- Operations -- Home Collection". Polo's retail sales are generated
by the Company's 28 Polo stores (including 21 stores being acquired pursuant to
the PRC Acquisition (as defined)) located in regional malls and high-street
shopping areas and its 67 outlet stores located primarily in outlet malls. See
"Business -- Operations -- Direct Retailing" and "Reorganization and Related

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Transactions". As part of its licensing alliances, Polo conceptualizes, designs
and develops the marketing for a broad range of products under its various
brands for which the Company receives royalties from 19 product licensing
partners and 14 international licensing partners. See "Business -- Licensing
Alliances". Details of the Company's net revenues are shown in the table below.

FISCAL YEAR PRO FORMA
-------------------------------------- FISCAL 1997(3)
1995 1996 1997 (UNAUDITED)
-------- ---------- ---------- --------------
(IN THOUSANDS)

Wholesale net sales(1)................ $496,876 $ 606,022 $ 663,358 $ 623,041
Retail sales.......................... 249,719 303,698 379,972 508,645
-------- ---------- ----------
Net sales........................... 746,595 909,720 1,043,330 1,131,686
Licensing revenue(1)(2)............... 100,040 110,153 137,113 137,113
-------- ---------- ----------
Net revenues........................ $846,635 $1,019,873 $1,180,443 $1,268,799
======== ========== ==========

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(1) The Company purchased certain of the assets of its former womenswear
licensing partner in October 1995 and the fiscal 1996 and 1997 net revenues
reflect the inclusion of womenswear wholesale net sales of $36,692 and
$98,759, respectively, and an elimination of licensing revenue associated
with operations of the womenswear business after the acquisition.

(2) Licensing revenue includes royalties received from Home Collection licensing
partners.

(3) Pro forma financial information presented above gives effect to the PRC
Acquisition as if it had occurred on March 31, 1996, the first day of fiscal
1997. Prior to the PRC Acquisition, the Company owned a 50% interest in Polo
Retail Corporation ("PRC") which it accounted for using the equity method,
and as such, did not consolidate PRC's operations. Accordingly, prior to the
PRC Acquisition, net revenues did not include PRC's retail sales, while
wholesale net sales reflected the Company's sales to PRC. Simultaneous with
the closing of the Offerings, the Company will complete the PRC Acquisition.
See "Reorganization and Related Transactions -- PRC Acquisition" and
"Unaudited Pro Forma Combined Financial Information".

STRATEGY

From its inception, Polo has maintained a consistent operating strategy
which has driven growth in sales and earnings. Key elements of this core
strategy are as follows:

OFFER PREMIUM QUALITY PRODUCTS AND DISTINCTIVE DESIGNS. The Company's
products reflect a timeless and innovative American style associated with
and defined by Polo and Ralph Lauren. The Company's designers work closely
with its merchandising, sales and production teams and licensing partners
to offer premium quality product collections which incorporate Polo's
distinctive lifestyle themes. Mr. Lauren, supported by Polo's design staff
of over 180 persons, has won numerous awards for Polo's designs including,
most recently, the prestigious 1996 Menswear Designer of the Year and 1995
Womenswear Designer of the Year awards, both of which were awarded by the
Council of Fashion Designers of America ("CFDA"). In addition, Mr. Lauren
was honored with the CFDA Lifetime Achievement Award in 1991, and is the
only person to have won all three of these awards. See
"Business -- Design".

PROMOTE GLOBAL BRANDS AND IMAGE. The Company strives to project a
consistent global image for its brands from product design to marketing to
point-of-sale. Portraying core lifestyle themes more often than a
particular product, Polo's distinctive advertising builds the Company's
brand names and image, season after season. In fiscal 1997, Polo and its
licensing partners spent over $130 million to advertise and promote the
Company's brands worldwide. Polo also presents seasonal fashion shows,
directs in-store events and utilizes the services of prominent athletes and
models to promote its image. See "Business -- Marketing".

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merchandising and display of Polo Ralph Lauren products. By presenting a
broad selection of Polo products in an attractive customized environment,
the shop-within-shop boutiques heighten awareness of the Company's brands
and differentiate its offerings. The Company estimates that, as of March
29, 1997, more than three million square feet of retail space worldwide
(including Polo stores and approximately 1,700 department store
shop-within-shop boutiques in the United States) were exclusively dedicated
to products sold under the Company's brands. See
"Business -- Operations -- Domestic Wholesale and Home Collection Customers
and Service".

BUILD STRATEGIC LICENSING ALLIANCES. Polo's licensing alliances have
been a key factor in the Company's ability to offer an extensive array of
products domestically and internationally. Through these alliances, Polo
combines its consumer insight and design, marketing, and imaging skills
with the specific product or geographic competencies of its licensing
partners to create and build new businesses. Important examples of these
alliances include those with industry leaders such as L'Oreal, S.A. in
fragrances, WestPoint Stevens, Inc. in bedding and bath products, and Seibu
Department Stores, Ltd. in connection with the offering of Polo products in
Japan. See "Business -- Operations -- Home Collection" and
"-- Operations -- Licencing Alliances", for a description of the Company's
material licensing alliances and the percent of revenue attributable to
each.

DEVELOP POLO RALPH LAUREN STORES. The Company enhances the sale and
merchandising of its products and builds the awareness and identity of its
brands through its Polo stores and outlet stores. The Company's two
flagship stores, located on Madison Avenue in New York City, offer unique
shopping environments which communicate the complete Polo lifestyle. Over
100 Polo stores are operated by the Company and its licensing and joint
venture partners in over 25 countries worldwide. The Company also operates
67 outlet stores which broaden its customer base and contribute to
profitability while maintaining the integrity of its primary distribution
channels. See "Business -- Operations -- Direct Retailing".

The Company believes that the ongoing implementation of these operating
strategies in combination with its growth strategies positions the Company for
continued success. Polo's growth strategies are as follows:

EXPAND THE FAMILY OF POLO BRANDS. The Company continually creates new
brands based upon the original Polo and Ralph Lauren concepts to address
new markets and consumer groups and maintain Polo's premium image. For
example, in fiscal 1994, the Polo Sport label was created to introduce a
new line of fitness apparel targeted at the growing market for functional,
performance-oriented sport and outdoor wear. In Fall 1995, Polo launched
its exclusive, limited distribution Purple Label brand of men's tailored
clothing. Representing the Company's most refined apparel perspective,
Purple Label reinforces Polo's reputation for quality, innovation and
style. In Fall 1996, Polo introduced a denim-based line of sportswear for
men, women and children under the Polo Jeans Co. brand. With price points
below those of Polo's core apparel lines and a more casual contemporary
styling, Polo Jeans Co. is designed to appeal to younger consumers. See
"Business -- Operations -- Wholesale -- Polo Ralph Lauren Menswear" and
"-- Operations -- Licensing Alliances -- Product Licensing Alliances".

DEVELOP NEW PRODUCT CATEGORIES AND BUSINESSES WITHIN EXISTING
BRANDS. Polo builds sales within its existing brands by devoting resources
to less developed product areas and adding new product categories. For
example, in Spring 1994, the Company added skin care products to its Polo
Sport fragrance line and in fiscal 1996, introduced a line of paints and
wall finishes as part of Home Collection. Similarly, while Polo has offered
footwear since 1972, the Company plans to launch a full range of athletic
footwear in 1998. See "Business -- Operations -- Licensing
Alliances -- Product Licensing Alliances".

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LEVERAGE POLO BRANDS IN INTERNATIONAL MARKETS. The Company believes
that international markets offer additional opportunities for Polo's
quintessential American designs and lifestyle image and is committed to the
global development of its businesses. International expansion opportunities
may include the roll out of new products and brands following their launch
in the U.S., the introduction of additional product lines, the entrance
into new international markets and the addition of Polo stores in these
markets. For example, following the successful launch of Polo Jeans Co. in
the United States in Fall 1996, the Company formalized its plans to
introduce the line in Canada, Europe and Asia in Fall 1997. See
"Business -- Operations -- Licensing Alliances -- International Licensing
Alliances".

CAPITALIZE ON WOMENSWEAR OPPORTUNITY. The Company believes the
womenswear market offers a significant opportunity for it to further
capitalize on its position both domestically and internationally as a
leading designer of womenswear. The Company acquired its womenswear
business from a former licensing partner in October 1995. In addition to
allowing the Company to improve the operations of its existing womenswear
designer and bridge lines, the acquisition has enabled Polo to take
important growth initiatives in additional segments of the womenswear
market. In Fall 1996, for example, the Company and a new licensing partner
launched the Lauren line of women's better sportswear and career apparel.
See "Business -- Operations -- Wholesale -- Ralph Lauren Womenswear".

CONTINUE RETAIL EXPANSION. The Company plans to expand its retail
presence by adding five or more Polo stores, including flagship stores in
London and Chicago, over the next two years. The Company also plans to add
ten to 20 new outlet stores over the next three years. In addition, in
fiscal 1998, the Company plans to test market a Polo Jeans Co. store. See
"Business -- Operations -- Direct Retailing".

REORGANIZATION AND RELATED TRANSACTIONS

In anticipation of the Offerings, the Company is effecting an internal
reorganization and certain other transactions including the PRC Acquisition and
the Trademark Acquisition (as defined), all of which will be completed prior to
or simultaneous with the closing of the Offerings. Since October 1994, the
Company has conducted its operations primarily through two operating
partnerships, Polo Ralph Lauren Enterprises, L.P. ("Enterprises") and Polo Ralph
Lauren, L.P. ("Polo LP"), and subsidiaries of Polo LP. In October 1995, the
Company purchased certain of the assets of the Company's unaffiliated former
womenswear licensing partner, Ralph Lauren Womenswear Inc., a wholly owned
subsidiary of Bidermann Industries Corp. ("Bidermann"), and formed The Ralph
Lauren Womenswear Company, L.P. ("Womenswear LP" and, together with Enterprises
and Polo LP, the "Operating Partnerships"). In May 1997, a corporation wholly
owned by Mr. Lauren through which he held certain interests in Enterprises and
Polo LP merged into Polo Ralph Lauren Corporation, a newly formed entity also
wholly owned by Mr. Lauren, pursuant to which Mr. Lauren received shares of
Class B Common Stock (as defined). Prior to the commencement of the Offerings,
the Company will declare the Dividend (as defined) and certain investment funds
affiliated with The Goldman Sachs Group, L.P. (collectively, the "GS Group")
will contribute their interests, either directly or by merger into the Company,
and Mr. Lauren and a partnership controlled by Mr. Lauren, RL Holding, L.P.
("Holding LP"), will contribute their interests, in the Operating Partnerships,
and Mr. Lauren will contribute all of the outstanding capital stock of Polo
Ralph Lauren Womenswear, Inc., a corporation wholly owned by Mr. Lauren
("PRLW"), to the Company in exchange for shares of Class B Common Stock and
Class C Common Stock (as defined) and promissory notes (the "Reorganization
Notes") of the Company (the "Reorganization"). As a result of such
contributions, Enterprises and Polo LP will dissolve by operation of law.

Simultaneous with the Reorganization, the Company will also acquire from RL
Family, L.P. ("Family LP"), a partnership of which Mr. Lauren is the sole
general partner, Family LP's sole membership interest in RL Fragrances, LLC
("Fragrances LLC"), an entity which holds the

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trademarks and rights under a licensing agreement relating to the Company's U.S.
fragrance business and the interest which the Company did not previously own in
The Polo/Lauren Company, L.P. in exchange for 1,557,503 shares of Class B Common
Stock (the "Trademark Acquisition"). The Polo/Lauren Company, L.P. is currently
majority-owned and controlled by the Company and holds the trademarks relating
to its international licensing business. The Reorganization, including the
Trademark Acquisition, will be completed prior to commencement of the Offerings.

Also simultaneous with the Reorganization and the Trademark Acquisition,
the Company entered into a new credit facility with The Chase Manhattan Bank, as
lender and agent (the "New Credit Facility"), and used the borrowings thereunder
to refinance the Polo LP credit facility and to repay in full approximately
$56.6 million in aggregate of the borrowings outstanding under the Womenswear LP
credit facility and the PRC credit facility, thereby terminating such credit
facilities. See "Reorganization and Related Transactions" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources".

Effective April 3, 1997, the Company entered into negotiated, arms-length
purchase agreements with Mr. David J. Hare, who has since become an executive
officer of the Company, and third parties including Mr. William G. Merriken and
Mr. John Slater (both employees of PRC or its subsidiaries) and Franklin Retail
Corporation, to acquire the 50% interest in PRC and minority interests in
entities related to PRC, Perkins Shearer Venture, Colorado Retail Corp. and
Perkins Shearer Polo Ltd. (collectively, "PRC Related Entities"), that the
Company did not previously own for aggregate consideration of approximately
$10.4 million, which acquisition (the "PRC Acquisition") will be completed
simultaneous with the Offerings. The consideration to be paid by the Company
includes a cash payment of $8.4 million, made on April 3, 1997, a cash payment
of $1.0 million made on May 15, 1997 and a cash payment of $0.3 million made on
June 3, 1997. The remaining $0.7 million will be paid concurrent with the
closing of the Offerings in 26,923 shares of Class A Common Stock. See
"Reorganization and Related Transactions" and "Certain Relationships and Related
Transactions".

The principal executive offices of the Company are located at 650 Madison
Avenue, New York, New York 10022. The Company's telephone number at such address
is (212) 318-7000.

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THE OFFERINGS

The offering hereby of 23,500,000 shares of Class A Common Stock, par value
$.01 per share, of the Company (the "Class A Common Stock" and, collectively
with the Class B Common Stock, par value $.01 per share (the "Class B Common
Stock") and Class C Common Stock, par value $.01 per share (the "Class C Common
Stock"), the "Common Stock") initially being offered in the United States (the
"U.S. Offering") and the offering of 6,000,000 shares of Class A Common Stock
initially being offered in a concurrent international offering outside the
United States (the "International Offering") are collectively referred to as the
"Offerings". The closing of each Offering is conditioned upon the closing of the
other Offering.

Class A Common Stock Offered:

The Company........................ 9,400,000 Shares
The Selling Stockholders........... 20,100,000 Shares
----------
Total......................... 29,500,000 Shares
==========
Common Stock to be outstanding after the
Offerings:
Class A Common Stock.................. 29,847,846 Shares(1)
Class B Common Stock.................. 45,935,021 Shares(2)
Class C Common Stock.................. 22,720,979 Shares(2)
----------
Total......................... 98,503,846 Shares(1)
==========
Use of Proceeds(3)...................... The Company intends to use the estimated net
proceeds of approximately $226.0 million from
the Offerings to repay indebtedness (including
the Subordinated Notes (as defined), the
Reorganization Notes and bank debt) and to pay
the Dividend (as defined). The Company will not
receive any proceeds from the sale of shares of
Class A Common Stock by the Selling
Stockholders. See "Use of Proceeds".

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(1) Does not include approximately 4,200,000 shares of Class A Common Stock
subject to stock options granted to certain employees simultaneous with the
commencement of the Offerings. See "Management -- 1997 Stock Incentive Plan"
and "-- 1997 Non-Employee Director Option Plan". Includes 26,923 shares of
Class A Common Stock which are expected to be issued in connection with the
PRC Acquisition and 76,923 shares of Class A Common Stock granted to Mr.
Michael J. Newman under the 1997 Stock Incentive Plan simultaneous with the
commencement of the Offerings. See "-- Reorganization and Related
Transactions -- PRC Acquisition" and "Management -- 1997 Stock Incentive
Plan".

(2) Shares of Class B Common Stock are convertible at any time into shares of
Class A Common Stock on a one-for-one basis and may not be transferred to
anyone other than a Lauren Family Member (as defined). Shares of Class C
Common Stock are convertible at any time into shares of Class A Common Stock
on a one-for-one basis and may not be transferred to anyone other than among
members of the GS Group or any successor of a member of the GS Group. See
"Certain Relationships and Related Transactions", "Principal and Selling
Stockholders" and "Description of Capital Stock".

(3) After deducting the underwriting discount and estimated expenses of the
Offerings and assuming no exercise of the Underwriters' over-allotment
options.

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12

Voting Rights........................... The holders of Class A Common Stock generally
have rights identical to holders of Class B
Common Stock and Class C Common Stock, except
that holders of Class A Common Stock and Class C
Common Stock are entitled to one vote per share
and holders of Class B Common Stock are entitled
to ten votes per share. Holders of all classes
of Common Stock generally will vote together as
a single class on all matters presented to the
stockholders for their vote or approval except
for the election and the removal of directors
and as otherwise required by applicable Delaware
law. Immediately after the closing of the
Offerings, holders of Class B Common Stock,
voting as a class, will be entitled to elect
four of the six members of the Board of
Directors. See "Description of Capital Stock --
Common Stock -- Voting Rights".
New York Stock Exchange ("NYSE")
symbol................................ RL

RISK FACTORS

See "Risk Factors" beginning on page 15 for a discussion of certain factors
that should be considered in evaluating an investment in the Class A Common
Stock. Such factors include, among others, the Company's dependence on Mr.
Lauren and other key personnel; fashion and apparel industry risks; the
Company's dependence on sales to a limited number of large department store
customers; risks relating to extending credit to customers; the Company's
dependence on licensing partners for a substantial portion of net income; risks
associated with a lack of operational and financial control over licensed
businesses; risks associated with consolidations, restructurings and other
ownership changes in the retail industry; competition; uncertainty relating to
the Company's ability to implement its growth strategy; the possible adverse
impact of unaffiliated manufacturers' inability to manufacture in a timely
manner, to meet quality standards or to use acceptable labor practices; risks
associated with changes in social, political, economic and other conditions
affecting the Company's foreign operations and sourcing; the possible adverse
impact of changes in import restrictions; trademarks; foreign currency
fluctuations; the material benefits to principal stockholders; and the control
of the Company by Lauren Family Members and the anti-takeover effect of multiple
classes of stock.

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SUMMARY HISTORICAL AND PRO FORMA COMBINED FINANCIAL DATA

The summary historical financial data presented below for each of the five
fiscal years in the period ended March 29, 1997 have been derived from the
Company's audited Combined Financial Statements. The financial data should be
read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations", the Combined Financial Statements and
Notes thereto, the unaudited Combined Financial Statements and Notes thereto and
other financial data included elsewhere in this Prospectus. The following table
also includes certain unaudited pro forma combined statement of income data for
fiscal 1997 which give effect to the Reorganization, the PRC Acquisition and
certain other adjustments as if they had occurred on March 31, 1996. In
addition, the unaudited pro forma combined balance sheet data, as adjusted, give
effect to the Reorganization, the PRC Acquisition, the New Credit Facility, the
Offerings and certain other adjustments as if they had occurred on March 29,
1997. See "Unaudited Pro Forma Combined Financial Information".

FISCAL YEAR ENDED PRO FORMA(2)
--------------------------------------------------------------- MARCH 29,
APRIL 3, APRIL 2, APRIL 1, MARCH 30, MARCH 29, 1997
1993(1) 1994 1995 1996 1997 (UNAUDITED)
--------- --------- --------- ---------- ---------- ------------
(IN THOUSANDS, EXCEPT SHARE DATA)

STATEMENT OF INCOME DATA:
Net sales................................. $ 684,923 $ 726,568 $ 746,595 $ 909,720 $1,043,330 $1,131,686
Licensing revenue......................... 82,418 84,174 100,040 110,153 137,113 137,113
-------- -------- -------- -------- ---------- --------
Net revenues............................ 767,341 810,742 846,635 1,019,873 1,180,443 1,268,799
Cost of goods sold........................ 425,322 466,525 474,999 583,546 648,597 687,003
-------- -------- -------- -------- ---------- --------
Gross profit............................ 342,019 344,217 371,636 436,327 531,846 581,796
Selling, general and administrative
expenses................................ 259,941 262,825 261,506 309,207 374,483 429,163
-------- -------- -------- -------- ---------- --------
Income from operations.................. 82,078 81,392 110,130 127,120 157,363 152,633
Interest expense.......................... 19,209 15,880 16,450 16,287 13,660 15,813
Equity in net loss of affiliate........... -- 2,837 262 1,101 3,599 --
-------- -------- -------- -------- ---------- --------
Income before income taxes.............. 62,869 62,675 93,418 109,732 140,104 136,820
Provision for income taxes(3)............. 4,960 8,778 13,244 10,925 22,804 57,464
-------- -------- -------- -------- ---------- --------
Net income.............................. $ 57,909 $ 53,897 $ 80,174 $ 98,807 $ 117,300 $ 79,356
======== ======== ======== ======== ========== ========
Per share information(4).................. $ 0.87
========
Number of common shares assumed
outstanding(4).......................... 90,824,645
========

MARCH 29, 1997
---------------------------
PRO FORMA,
AS
ADJUSTED(5)
ACTUAL (UNAUDITED)
-------- --------------
(IN THOUSANDS)

BALANCE SHEET DATA:
Working capital...................................................................... $212,372 $269,640
Inventories.......................................................................... 222,147 246,091
Total assets......................................................................... 576,743 643,663
Total debt........................................................................... 140,900 24,481
Partners' capital and stockholders' equity........................................... 260,685 427,650

- ---------------

(1) Fiscal 1993 was a 53 week year.

(2) The Company's combined statement of income has been adjusted to reflect the
PRC Acquisition, including the amortization of goodwill over 25 years
associated with such acquisition and the elimination of equity in net loss
of affiliate.

(3) Increase of $34,660 for the fiscal year ended March 29, 1997 for income
taxes based upon pro forma pre-tax income as if the Company had been subject
to additional Federal, state and local income taxes as of the beginning of
the period, based upon a pro forma effective tax rate of 42%. The entities
in the combined group include principally partnerships which are not subject
to Federal and certain state income taxes (except for certain retail
operations). However, effective with the Reorganization, the Company will be
fully subject to such taxes at the corporate level. See "Reorganization and
Related Transactions".

(Continued on following page)

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14

(4) Pro forma net income per share is based upon (a) 89,000,000 shares of Common
Stock outstanding as a result of the Reorganization and the Trademark
Acquisition, increased by (b) the sale of 1,720,799 shares of Class A Common
Stock by the Company at an initial public offering price of $26.00 per share
($24.04 net of expenses), the proceeds of which would be necessary to pay
approximately $41,368 in satisfaction of the Dividend and Reorganization
Notes; (c) 26,923 shares of Class A Common Stock expected to be issued in
connection with the PRC Acquisition; and (d) 76,923 shares of Class A Common
Stock which the Company awarded to Mr. Newman simultaneously with the
commencement of the Offerings. See "Reorganization and Related Transactions"
and "Management -- 1997 Stock Incentive Plan".

Supplementary pro forma net income per share of $0.81 is based upon the
average number of shares of Common Stock used in the calculation of pro
forma net income per share, increased by (a) the sale of 998,336 shares of
Class A Common Stock being sold by the Company, at an initial public
offering price of $26.00 per share ($24.04, net of expenses), the proceeds
of which would be necessary to repay approximately $24,000 outstanding under
the Subordinated Notes (as defined); and (b) the sale of 6,680,116 shares of
Class A Common Stock by the Company, at an initial public offering price of
$26.00 per share ($24.04, net of expenses), the proceeds of which would be
necessary to repay amounts outstanding under the Company's New Credit
Facility of approximately $160,590.

(5) The unaudited pro forma, as adjusted, balance sheet data reflects (a) the
Reorganization and the Trademark Acquisition; (b) the declaration by the
Company of the Dividend and the Reorganization Notes in the amount of
$85,792; (c) the termination of the Company's partnership status resulting
in the recording of a deferred tax asset of $25,432, in addition to
approximately $2,805 of deferred tax assets previously recorded by the
Company; (d) the expected issuance of 26,923 shares of Class A Common Stock
in connection with the PRC Acquisition; (e) the sale of 9,400,000 shares of
Class A Common Stock in the Offerings by the Company, at an initial public
offering price of $26.00 per share and no exercise of the Underwriters'
over-allotment options; and (f) the application of the estimated net
proceeds received by the Company therefrom to pay the Subordinated Notes,
the Dividend and Reorganization Notes and a portion of the amounts
outstanding under the New Credit Facility. See "Reorganization and Related
Transactions".

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15

RISK FACTORS

Prospective investors should consider carefully the following information
in conjunction with the other information contained in this Prospectus before
purchasing the Class A Common Stock offered hereby.

DEPENDENCE ON MR. RALPH LAUREN AND OTHER KEY PERSONNEL

Mr. Ralph Lauren's leadership in the design, marketing and operational
areas has been a critical element of the Company's success. The loss of the
services of Mr. Lauren and any negative market or industry perception arising
from such loss could have a material adverse effect on the Company. The
Company's other executive officers have substantial experience and expertise in
the Company's business and have made significant contributions to its growth and
success. The unexpected loss of services of one or more of these individuals
could adversely affect the Company. See "Management". The Company is not
protected by a material amount of key-man or similar life insurance for Mr.
Lauren or any of its other executive officers.

The Company has entered into employment agreements only with Mr. Lauren and
certain other of its executive officers. See "Management -- Executive
Compensation Agreements".

FASHION AND APPAREL INDUSTRY RISKS

The Company believes that its success depends in substantial part on its
ability to originate and define product and fashion trends as well as to
anticipate, gauge and react to changing consumer demands in a timely manner.
There can be no assurance that the Company will continue to be successful in
this regard. If the Company misjudges the market for its products, it may be
faced with significant excess inventories for some products and missed
opportunities with others. See "Business -- Sourcing, Production and Quality".
In addition, weak sales and resulting markdown requests from customers could
have a material adverse effect on the Company's business, results of operations
and financial condition.

The industries in which the Company operates are cyclical. Purchases of
apparel and related merchandise and home products tend to decline during
recessionary periods and also may decline at other times. While the Company has
fared well in recent years in a difficult retail environment, there can be no
assurance that the Company will be able to maintain its historical rate of
growth in revenues and earnings, or remain profitable in the future. Further,
uncertainties regarding future economic prospects could affect consumer spending
habits and have an adverse effect on the Company's results of operations.

DEPENDENCE ON SALES TO A LIMITED NUMBER OF LARGE DEPARTMENT STORE CUSTOMERS;
RISKS RELATED TO EXTENDING CREDIT TO CUSTOMERS

Certain of the Company's department store customers, including some under
common ownership, account for significant portions of the Company's wholesale
net sales. Federated Department Stores, Inc., The May Department Stores Company
and Dillard Department Stores, Inc. accounted for 17.3%, 14.2% and 12.5%,
respectively, of the Company's wholesale net sales during fiscal 1995; 16.7%,
13.2% and 13.5%, respectively, during fiscal 1996; and 17.2%, 14.2% and 13.8%,
respectively, during fiscal 1997. The Company had no other customer which
accounted for more than 10% of its wholesale net sales during any of the last
three fiscal years. The Company believes that a substantial portion of sales of
the Company's licensed products by its domestic licensing partners (including
sales made by the Company's sales force of Home Collection products) are also
made to the Company's largest department store customers. The Company's ten
largest customers accounted for approximately 66% of the Company's wholesale net
sales during fiscal 1997. The Company generally enters into a number of purchase
order commitments with its customers for each of its lines every season and does
not enter into long-term agreements with any of its

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customers. A decision by the controlling owner of a group of stores or any other
significant customer, whether motivated by competitive conditions, financial
difficulties or otherwise, to decrease the amount of merchandise purchased from
the Company or its licensing partners, or to change its manner of doing business
could have a material adverse effect on the Company's financial condition and
results of operations. See "Business -- Operations -- Domestic Wholesale and
Home Collection Customers and Service".

The Company sells its merchandise primarily to major department stores
across the United States and extends credit based on an evaluation of each
customer's financial condition, usually without requiring collateral. While
various retailers, including some of the Company's customers, have experienced
financial difficulties in the past few years which increased the risk of
extending credit to such retailers, the Company's losses due to bad debts have
been limited. However, financial difficulties of a customer could cause the
Company to curtail business with such customer or require the Company to assume
more credit risk relating to such customer's receivables. The Company had three
customers, Dillard Department Stores, Inc., Federated Department Stores, Inc.
and The May Department Stores Company, which in aggregate constituted 38%, 36%
and 48% of trade accounts receivables outstanding at April 1, 1995, March 30,
1996 and March 29, 1997, respectively. The Company's inability to collect on its
trade accounts receivable relating to any one of these customers could have a
material adverse effect on the Company's business or financial condition. See
"Business -- Credit Control".

DEPENDENCE ON LICENSING PARTNERS FOR A SUBSTANTIAL PORTION OF NET INCOME; RISKS
ASSOCIATED WITH A LACK OF OPERATIONAL AND FINANCIAL CONTROL OVER LICENSED
BUSINESSES

A substantial portion of the Company's net income is derived from licensing
revenue received from its licensing partners. Approximately 39% of the Company's
licensing revenue in fiscal 1997 was derived from three licensing partners.
These licensing partners, Seibu Department Stores, Ltd., WestPoint Stevens, Inc.
and L'Oreal S.A./Cosmair Inc., accounted for 18.1%, 18.5% and 8.5%,
respectively, of the Company's licensing revenue in fiscal 1995; 16.9%, 18.6%
and 8.7%, respectively, in fiscal 1996; and 13.8%, 17.3% and 8.4%, respectively,
in fiscal 1997. The Company had no other licensing partner which accounted for
more than 10% of the Company's licensing revenue during any of the last three
fiscal years. The risk factors associated with the Company's own products apply
to its licensed products as well, in addition to any number of possible risks
specific to a licensing partner's business, including for example risks
associated with a particular licensing partner's ability to obtain capital and
manage its labor relations. Although certain of the Company's license agreements
prohibit licensing partners from entering into licensing arrangements with the
Company's competitors, generally the Company's licensing partners are not
precluded from offering, under other brands, the types of products covered by
their license agreements with the Company. A substantial portion of sales of the
Company's products by its domestic licensing partners are also made to the
Company's largest customers. While the Company has significant control over its
licensing partners' products and advertising, it relies on its licensing
partners for, among other things, operational and financial control over their
businesses. In addition, failure by the Company to maintain its existing
licensing alliances could adversely affect the Company's financial condition and
results of operations. Although the Company believes in most circumstances it
could replace existing licensing partners if necessary, its inability to do so
for any period of time could adversely affect the Company's revenues both
directly from reduced licensing revenue received and indirectly from reduced
sales of the Company's other products. See "Business -- Operations -- Home
Collection" and "-- Operations -- Licensing Alliances".

RISKS ASSOCIATED WITH CONSOLIDATIONS, RESTRUCTURINGS AND OTHER OWNERSHIP CHANGES
IN THE RETAIL INDUSTRY

In recent years, the retail industry has experienced consolidation and
other ownership changes. In addition, some of the Company's customers have
operated under the protection of the federal

16
17

bankruptcy laws. In the future, retailers in the United States and in foreign
markets may consolidate, undergo restructurings or reorganizations, or realign
their affiliations, any of which could decrease the number of stores that carry
the Company's products or increase the ownership concentration within the retail
industry. While such changes in the retail industry to date have not had a
material adverse effect on the Company's business or financial condition, there
can be no assurance as to the future effect of any such changes.

COMPETITION

Competition is strong in the segments of the fashion and consumer product
industries in which the Company operates. The Company competes with numerous
domestic and foreign designers, brands and manufacturers of apparel,
accessories, fragrances and home furnishing products, some of which may be
significantly larger and more diversified and have greater resources than the
Company. The Company's business depends on its ability to shape, stimulate and
respond to changing consumer tastes and demands by producing innovative,
attractive and exciting products, brands and marketing, as well as on its
ability to remain competitive in the areas of quality and price. See
"Business -- Competition".

UNCERTAINTY RELATING TO ABILITY TO IMPLEMENT GROWTH STRATEGY

As part of its growth strategy, the Company seeks to create new brands,
develop new product categories and businesses within existing brands and
introduce new brands and product categories to international markets. In
addition, the Company seeks to capitalize on its position as a leading designer
of womenswear. There can be no assurance that these strategies will be
successful. The Company also intends to continue to expand its network of retail
stores. The actual number and type of such stores to be opened and their success
will depend on various factors, including the performance of the Company's
wholesale and retail operations, the ability of the Company to manage such
expansion and hire and train personnel, the availability of desirable locations
and the negotiation of acceptable lease terms for new locations and upon lease
renewals for existing locations. There can be no assurance that the Company will
be able to open and operate new stores on a timely or profitable basis. There
can be no assurance that the Company's growth strategies will be successful or
that the Company's total net revenues will increase as a result of the
implementation of such strategies. See "Business -- Strategy" and
"-- Operations".

POSSIBLE ADVERSE IMPACT OF UNAFFILIATED MANUFACTURERS' INABILITY TO MANUFACTURE
IN A TIMELY MANNER, TO MEET QUALITY STANDARDS OR TO USE ACCEPTABLE LABOR
PRACTICES

The Company does not own or operate any manufacturing facilities and is
therefore dependent upon independent third parties for the manufacture of all of
its products. The Company's products are manufactured to its specifications by
both domestic and international manufacturers. During fiscal 1997, approximately
30% (by dollar value) of men's and women's products were manufactured in the
United States and approximately 70% (by dollar value) of such products were
manufactured in Hong Kong, Saipan, Malaysia and other foreign countries. The
inability of a manufacturer to ship orders of the Company's products in a timely
manner or to meet the Company's quality standards could cause the Company to
miss the delivery date requirements of its customers for those items, which
could result in cancellation of orders, refusal to accept deliveries or a
reduction in purchase prices, any of which could have a material adverse effect
on the Company's financial condition and results of operations. Although the
Company enters into a number of purchase order commitments each season
specifying a time frame for delivery, method of payment, design and quality
specifications and other standard industry provisions, the Company does not have
long-term contracts with any manufacturer. None of the manufacturers used by the
Company produces the Company's products exclusively. Two manufacturers engaged
by the Company accounted for approximately 16% and 11% of the Company's total
production during fiscal 1997. The primary production facilities of these two
manufacturers are located in Malaysia, Sri

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18

Lanka, Hong Kong and Mauritius, in the case of the manufacturer that accounted
for approximately 16% of the Company's total production during fiscal 1997, and
in Saipan, in the case of the manufacturer that accounted for approximately 11%
of the Company's total production during fiscal 1997. No other manufacturer
accounted for more than five percent of the Company's total production in fiscal
1997.

The Company requires its licensing partners and independent manufacturers
to operate in compliance with applicable laws and regulations. While the
Company's internal and vendor operating guidelines promote ethical business
practices and the Company's staff periodically visits and monitors the
operations of its independent manufacturers, the Company does not control such
manufacturers or their labor practices. The violation of labor or other laws by
an independent manufacturer of the Company or by one of the Company's licensing
partners, or the divergence of an independent manufacturer's or licensing
partner's labor practices from those generally accepted as ethical in the United
States, could have a material adverse effect on the Company's financial
condition and results of operations. See "Business -- Sourcing, Production and
Quality".

RISK ASSOCIATED WITH CHANGES IN SOCIAL, POLITICAL, ECONOMIC AND OTHER CONDITIONS
AFFECTING FOREIGN OPERATIONS AND SOURCING; POSSIBLE ADVERSE IMPACT OF CHANGES IN
IMPORT RESTRICTIONS

A significant portion of the Company's products are currently sourced
outside the United States through arrangements with over 75 foreign
manufacturers in 24 different countries. During fiscal 1997, approximately 53%
of the Company's piece goods were purchased from sources outside the United
States, including Italy, Japan, Thailand and other foreign countries. In that
same period, approximately 30% (by dollar volume) of men's and women's products
were produced in the United States and approximately 70% (by dollar volume) of
such products were produced in Hong Kong, Saipan, Malaysia and other foreign
countries.

Risks inherent in foreign operations include changes in social, political
and economic conditions which could result in the disruption of trade from the
countries in which the Company's manufacturers or suppliers are located, the
imposition of additional regulations relating to imports, the imposition of
additional duties, taxes and other charges on imports, significant fluctuations
of the value of the dollar against foreign currencies, or restrictions on the
transfer of funds, any of which could have a material adverse effect on the
Company's financial condition and results of operations. See
"Business -- Sourcing, Production and Quality".

Sovereignty over Hong Kong is scheduled to be transferred from the United
Kingdom to The People's Republic of China effective July 1, 1997. If the
business climate in Hong Kong were to experience an adverse change as a result
of the transfer, the Company believes it could replace the merchandise currently
produced in Hong Kong with merchandise produced elsewhere without a material
adverse effect on the Company. Nevertheless, there can be no assurance that the
Company would be able to do so.

The Company's import operations are subject to constraints imposed by
bilateral textile agreements between the United States and a number of foreign
countries. These agreements, which have been negotiated bilaterally either under
the framework established by the Arrangement Regarding International Trade in
Textiles, known as the Multifiber Agreement, or other applicable statutes,
impose quotas on the amounts and types of merchandise which may be imported into
the United States from these countries. These agreements also allow the
signatories to adjust the quantity of imports for categories of merchandise
that, under the terms of the agreements, are not currently subject to specific
limits. The Company's imported products are also subject to United States
customs duties which comprise a material portion of the cost of the merchandise.
The United States and the countries in which the Company's products are produced
or sold may, from time to time, impose new quotas, duties, tariffs, or other
restrictions, or may adversely adjust prevailing quota, duty or tariff levels,
any of which could have a material adverse effect on the Company's financial
condition and results of operations. See "Business -- Government Regulation".

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TRADEMARKS

The Company believes that its trademarks and other proprietary rights are
important to its success and its competitive position. Accordingly, the Company
devotes substantial resources to the establishment and protection of its
trademarks on a worldwide basis. In the course of international expansion, the
Company has, however, experienced conflict with various third parties which have
acquired or claimed ownership rights in certain trademarks which include Polo
and/or a representation of a polo player astride a horse, or otherwise contested
the Company's rights to its trademarks. The Company has in the past successfully
resolved such conflicts through both legal action and negotiated settlements,
none of which the Company believes has had a material impact on the Company's
financial condition and results of operations. Nevertheless, there can be no
assurance that the actions taken by the Company to establish and protect its
trademarks and other proprietary rights will be adequate to prevent imitation of
its products by others or to prevent others from seeking to block sales of the
Company's products as violative of the trademarks and proprietary rights of
others. Moreover, no assurance can be given that others will not assert rights
in, or ownership of, trademarks and other proprietary rights of the Company or
that the Company will be able to successfully resolve such conflicts. In
addition, the laws of certain foreign countries may not protect proprietary
rights to the same extent as do the laws of the United States. See
"Business -- Trademarks".

FOREIGN CURRENCY FLUCTUATIONS

The Company generally purchases its products in U.S. dollars. However, the
Company sources a significant amount of its products overseas and, as such, the
cost of these products may be affected by changes in the value of the relevant
currencies. The Company's international licensing revenue generally is derived
from sales in foreign currencies including the Japanese yen and the French
franc, and such revenue could be materially affected by currency fluctuations.
In fiscal 1997, approximately 29% of the Company's licensing revenue was
received from international licensing partners. Changes in currency exchange
rates may also affect the relative prices at which the Company and foreign
competitors sell their products in the same market. The Company, from time to
time, hedges certain exposures to changes in foreign currency exchange rates
arising in the ordinary course of business. There can be no assurance that
foreign currency fluctuations will not have a material adverse impact on the
Company's financial condition and results of operations. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources" and "-- Exchange Rates".

MATERIAL BENEFITS TO PRINCIPAL STOCKHOLDERS

The Company intends to use the net proceeds of the Offerings received by it
to, among other things, repay approximately $24.0 million of Subordinated Notes
(as defined) held by Mr. Lauren and the GS Group, and pay the Dividend and the
Reorganization Notes in the amount of approximately $43.0 million, in aggregate.
Mr. Lauren and a Lauren Family Trust (as defined) are Selling Stockholders and
will receive approximately $465.4 million of gross proceeds from the sale of
shares in the Offerings. The GS Group, also a Selling Stockholder, will receive
approximately $57.2 million of gross proceeds from the sale of shares in the
Offerings. The entities comprising the GS Group are affiliates of Goldman, Sachs
& Co. which is one of the underwriters of the Offerings. See "Use of Proceeds",
"Certain Relationships and Related Transactions" and "Principal and Selling
Stockholders".

CONTROL BY LAUREN FAMILY MEMBERS AND ANTI-TAKEOVER EFFECT OF MULTIPLE CLASSES OF
STOCK

Holders of the Company's Class A Common Stock and Class C Common Stock are
entitled to one vote per share and holders of the Company's Class B Common Stock
are entitled to ten votes per share. Immediately after the Offerings, Lauren
Family Members will beneficially own all 45,935,021 shares of the Company's
outstanding Class B Common Stock representing 89.8% of the

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20

voting power of the Common Stock and the right to elect four of the initial six
directors of the Company.Accordingly, Lauren Family Members will, until they in
the aggregate sell substantially all of their Class B Common Stock, be able to
elect a majority of the Company's directors and, if they vote in the same
manner, determine the disposition of practically all matters submitted to a vote
of the Company's stockholders, including mergers, going private transactions and
other extraordinary corporate transactions and the terms thereof. See
"Management -- Board of Directors", "Principal and Selling Stockholders" and
"Description of Capital Stock".

Lauren Family Members will, until they in the aggregate sell substantially
all of their Class B Common Stock, have the ability, by virtue of their stock
ownership, to prevent or cause a change in control of the Company. Certain
provisions of the Company's Amended and Restated Certificate of Incorporation
and material agreements may be deemed to have the effect of discouraging a third
party from pursuing a non-negotiated takeover of the Company and preventing
certain changes in control of the Company. In addition, the Company's 1997 Stock
Incentive Plan provides for accelerated vesting of stock options upon a "change
in control" of the Company. See "Management -- Executive Compensation
Agreements", "-- Board of Directors", "-- 1997 Stock Incentive Plan", "Certain
Relationships and Related Transactions" and "Description of Capital Stock".

ABSENCE OF PRIOR PUBLIC MARKET FOR CLASS A COMMON STOCK;
POSSIBLE VOLATILITY OF STOCK PRICE

Prior to the Offerings, there has been no public market for the Class A
Common Stock. The initial public offering price of the Class A Common Stock has
been determined by negotiations among the Company, the Selling Stockholders and
the representatives of the Underwriters, and may not be indicative of the market
price of the Class A Common Stock after the Offerings. The Class A Common Stock
has been approved for listing, subject to notice of issuance, on the NYSE;
however, there can be no assurance that an active trading market will develop or
be sustained for the Class A Common Stock or that the Class A Common Stock will
trade in the public market at or above the initial public offering price. See
"Underwriting".

The stock market has from time to time experienced extreme price and volume
volatility. In addition, the market price of the Company's Class A Common Stock
may be influenced by a number of factors, including investor perceptions of the
Company and comparable public companies, changes in conditions or trends in the
industries in which the Company operates or in the industries of the Company's
significant customers, and changes in general economic and other conditions.
Factors such as quarter-to-quarter variations in the Company's revenues and
earnings could also cause the market price of the Class A Common Stock to
fluctuate significantly.

SHARES ELIGIBLE FOR FUTURE SALE; POTENTIAL ADVERSE EFFECT ON STOCK PRICE;
REGISTRATION RIGHTS

Sales of a substantial number of shares of Class A Common Stock in the
public market, or the perception that such sales may occur could adversely
affect prevailing market prices for the Class A Common Stock. Upon completion of
the Offerings, the Company will have outstanding a total of 29,847,846 shares of
Class A Common Stock, 45,935,021 shares of Class B Common Stock and 22,720,979
shares of Class C Common Stock. Of such shares, the 29,500,000 shares of Class A
Common Stock being sold in the Offerings (together with any shares sold upon
exercise of the Underwriters' over-allotment options) will be immediately
eligible for sale in the public market without restriction, except for shares
purchased by or issued to any affiliate (an "Affiliate") of the Company (within
the meaning of the Securities Act of 1933, as amended (the "Securities Act")).
All 45,935,021 shares of Class B Common Stock (which may be converted into Class
A Common Stock at any time) will be owned by Lauren Family Members and all
22,720,979 shares of Class C Common Stock (which may be converted into Class A
Common Stock at any time) will be owned by the GS Group. For so long as any
stockholder remains an Affiliate of the Company, any shares of Class A Common
Stock (including any shares issued upon conversion of other classes of Common
Stock) held by such person will only be available for public sale if such shares
are registered under

20
21

the Securities Act or sold in accordance with an applicable exemption from
registration, such as Rule 144, and any sales by an affiliate under Rule 144
would be subject to the volume and other limitations under such rule. In
addition, certain Lauren Family Members and the GS Group will be entitled to
registration rights with respect to the shares of Class A Common Stock issuable
upon conversion of their shares of Class B Common Stock and Class C Common
Stock, respectively. The Company, Lauren Family Members that own shares of
Common Stock, the GS Group and executive officers and directors of the Company
have agreed not to offer, sell, contract to sell or otherwise dispose of any
shares of Class A Common Stock or any securities of the Company that are
substantially similar to the Class A Common Stock, including but not limited to
any securities that are convertible into or exchangeable for, or that represent
the right to receive, Class A Common Stock or any such substantially similar
securities (other than pursuant to employee or director stock or stock option
plans existing on the date of this Prospectus or in connection with the PRC
Acquisition) for a period of 180 days after the date of this Prospectus without
the prior written consent of Goldman, Sachs & Co. as representative of the
Underwriters, except for the shares of Class A Common Stock offered in
connection with the Offerings. See "Certain Relationships and Related
Transactions -- Registration Rights Agreement", "Description of Capital Stock"
and "Shares Eligible for Future Sale".

ABSENCE OF DIVIDENDS

The Company anticipates that all of its earnings in the foreseeable future
will be retained to finance the continued growth and expansion of its business
and has no current intention to pay cash dividends on its Common Stock. See
"Dividend Policy" and "Reorganization and Related Transactions".

DILUTION

Purchasers of Class A Common Stock in the Offerings will experience
immediate dilution of $21.91 per share in the net tangible book value per share
of the Class A Common Stock from the initial public offering price. See
"Dilution".

21
22

REORGANIZATION AND RELATED TRANSACTIONS

REORGANIZATION

Since October 1994, the Company has conducted its operations primarily
through two operating partnerships, Enterprises and Polo LP, and subsidiaries of
Polo LP, including, among others, Fashions Outlet of America, Inc., Polo Ralph
Lauren Sourcing Company, Ltd., Polo Ralph Lauren UK Limited and The Polo/Lauren
Company, L.P. In October 1995, the Company purchased certain of the assets of
its former unaffiliated womenswear licensing partner, Ralph Lauren Womenswear
Inc., a wholly owned subsidiary of Bidermann, and formed Womenswear LP. At the
time of the purchase, Bidermann was in bankruptcy. Subsequent to obtaining the
approval of the Bankruptcy Court, the Company paid cash consideration of
approximately $40.3 million and assumed certain contracts, open customer orders
and open purchase orders of Bidermann. The Company believes that the purchase of
such assets was on terms as favorable as could have been obtained from a
disinterested third party.

As a result of its predominant partnership structure, prior to the
Reorganization, the earnings of the Company (other than earnings of certain
retail operations) were included in the taxable income of the Company's partners
for Federal and certain state income tax purposes, and the Company has generally
not been subject to income tax on such earnings, other than certain state and
local franchise and similar taxes. From and after the Reorganization, the
Company will be fully subject to Federal and state income taxes.

Prior to the Reorganization, (i) the Operating Partnerships will make
distributions to their partners of all or a portion of their undistributed
earnings (and the Company will then distribute to its sole stockholder the
amount received by it), (ii) the Company will distribute to its sole stockholder
any assets that it holds (other than its interests in the Operating Partnerships
and contracts relating to the PRC Acquisition) and (iii) then the Company will
declare a dividend to its sole stockholder in an anticipated amount of $22.0
million, which is the Company's estimate of its sole stockholder's share of the
undistributed earnings of the Operating Partnerships through the closing of the
Reorganization which have been or will be included in the taxable income of its
sole stockholder (the "Dividend"). The amount of the Dividend is expected to be
in excess of the sole stockholder's tax liability with respect to the Operating
Partnerships. The amount of the Reorganization Notes is expected to be $21.0
million and will equal the amount of the Dividend that the holders of the
Reorganization Notes would have received if they had owned on the record date of
the Dividend the number of shares of Common Stock that they will receive
pursuant to the Reorganization. The Dividend and the Reorganization Notes will
be paid out of a portion of the net proceeds of the Offerings. In the event the
actual amount of undistributed earnings through the closing of the
Reorganization is later determined to be in excess of the sum of the amount of
the Dividend and the Reorganization Notes, the Company will then declare and pay
a second dividend (the "Second Dividend") to the holders of the Class B Common
Stock and Class C Common Stock in the amount of the difference. The Selling
Stockholders will receive $589.6 million of the gross proceeds of the Offerings
from the sale of shares of Class A Common Stock in the Offerings, the payment of
the Dividend and the repayment of the Reorganization Notes and the Subordinated
Notes. The Reorganization is not conditioned upon the closing of the Offerings.
See "Certain Relationships and Related Transactions" and "Principal and Selling
Stockholders".

22
23

Simultaneous with the Reorganization and the Trademark Acquisition, the
Company entered into the New Credit Facility and used the funds from the New
Credit Facility to refinance the Polo LP credit facility and to repay in full
approximately $56.6 million in aggregate of the borrowings outstanding under the
Womenswear LP credit facility and the PRC credit facility, thereby terminating
such credit facilities. The New Credit Facility consists of $375 million of
revolving credit loans (the "Revolver"). The amount of the Revolver will be
reduced automatically upon completion of the Offerings to $225 million and will
mature on December 31, 2002. Interest is payable, at the Company's option, at
the lender's Base Rate (as defined) or at the London Interbank Offered Rate plus
an interest margin. See "Use of Proceeds". The agreement for the New Credit
Facility contains customary representations, warranties, covenants and events of
default for bank financings for borrowers similar to the Company, including
covenants regarding maintenance of net worth and leverage ratios, limitations on
indebtedness and incurrences of liens, and restrictions on sales of assets and
transactions with affiliates. Mr. Lauren and related entities will be obligated
under the agreement to maintain a specified minimum percentage of the voting
power of the Company's Common Stock.

TRADEMARK ACQUISITION

Simultaneous with the Reorganization, the Company will also acquire from
Family LP (i) its sole membership interest in Fragrances LLC, which holds the
trademarks and rights under a licensing agreement related to the Company's U.S.
fragrance business and (ii) the remaining interest, which the Company did not
previously own, in The Polo/Lauren Company, L.P., for 1,557,503 shares of Class
B Common Stock. The Polo/Lauren Company, L.P. is currently majority-owned and
controlled by the Company and holds the trademarks related to the Company's
international licensing business. The Trademark Acquisition is not conditioned
upon the closing of the Offerings. The terms of the Trademark Acquisition were
negotiated at arms-length and the Company believes that such terms were as
favorable as could have been obtained from unaffiliated third parties. In
connection with the Trademark Acquisition, each of the existing partners of the
Operating Partnerships (being Mr. Lauren, the GS Group and Holding LP) evaluated
and consented to the admission of Family LP as a stockholder of the Company in
consideration for the contribution to the Company by the Family LP of its
interest in Fragrances LLC. See "Certain Relationships and Related
Transactions".

PRC ACQUISITION

Effective April 3, 1997, the Company entered into negotiated arms-length
purchase agreements with Mr. Hare, who has since become an executive officer of
the Company, and third parties, including Messrs. Merriken and Slater (both
employees of PRC or its subsidiaries) and Franklin Retail Corporation, to
acquire the 50% interest in PRC and minority interests in the PRC Related
Entities that the Company did not previously own for aggregate consideration of
approximately $10.4 million, which acquisition will be completed simultaneous
with the Offerings. The consideration to be paid by the Company includes a cash
payment of $8.4 million made on April 3, 1997, a cash payment of $1.0 million
made on May 15, 1997, a cash payment of $0.3 million made on June 3, 1997, and a
payment of $0.7 million to be paid concurrent with the closing of the Offerings
with 26,923 shares of Class A Common Stock. See "Certain Relationships and
Related Transactions".

23
24

USE OF PROCEEDS

The net proceeds received by the Company from the Offerings are estimated
to be approximately $226.0 million (approximately $269.5 million if the
Underwriters' over-allotment options are exercised in full) after deducting
underwriting discounts and commissions and estimated offering expenses payable
by the Company. The Company intends to use such proceeds as follows: (i) to
repay approximately $24.0 million outstanding under the Subordinated Notes (as
defined) held by Mr. Lauren and the GS Group; (ii) to pay the Dividend and the
Reorganization Notes of approximately $43.0 million to Mr. Lauren and related
entities and the GS Group; and (iii) to repay approximately $159.0 million of
the borrowings outstanding under the Company's New Credit Facility. Any proceeds
to the Company from the exercise of the Underwriters' over-allotment options
will be used to retire remaining borrowings outstanding under the Revolver and
for general corporate purposes.

At the time of the formation of Enterprises and Polo LP, each of the GS
Group and Mr. Lauren made loans to Enterprises in the aggregate principal amount
of $7.0 million and $17.0 million, respectively (the "Subordinated Notes"). The
Subordinated Notes bear interest at the prime rate, payable quarterly, and
mature on March 1, 2001. The Reorganization Notes are non-interest bearing and
are due on the earlier of (i) the date of completion of the Offerings and (ii)
the sixtieth day following the declaration date of the Dividend. Borrowings
under the New Credit Facility will bear interest, at the Company's option, at a
Base Rate (the "Base Rate"), equal to the higher of (i) the Federal Funds Rate
as published by the Federal Reserve Bank of New York plus 1/2 of 1% and (ii) the
prime commercial lending rate of Chase in effect from time to time or at the
London Interbank Offered Rate plus an interest margin initially to be 0.3%. The
New Credit Facility consists of a $375 million Revolver. Upon the closing of the
Offerings the Company will be obligated to repay borrowings under the Revolver
to reduce the indebtedness outstanding thereunder to $225.0 million.
Indebtedness under the New Credit Facility was incurred to refinance the amounts
outstanding under the Polo LP credit facility (approximately $111.8 million at
the time of the Reorganization), to repay in full approximately $56.6 million in
aggregate of the borrowings under the Womenswear LP credit facility and the PRC
credit facility. Indebtedness under such facilities was incurred to fund, among
other things, repayment of third party indebtedness and indebtedness owed to
affiliates, distributions to partners, the PRC Acquisition and working capital
requirements. See "Reorganization and Related Transactions" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources".

The Company will not receive any of the proceeds from the sale of shares of
the Class A Common Stock by the Selling Stockholders.

24
25

DIVIDEND POLICY

Prior to the commencement of the Offerings, the Company will declare the
Dividend representing certain undistributed earnings of the Operating
Partnerships through the closing date of the Reorganization. To the extent that
undistributed earnings of the Operating Partnerships through the closing date of
the Reorganization are later determined to have exceeded the sum of the amount
of the Dividend and the Reorganization Notes, the Second Dividend representing
the difference between the actual undistributed earnings and the amount of the
Dividend and the Reorganization Notes will be paid after the closing date of the
Offerings to the holders of the Class B Common Stock and Class C Common Stock.
Purchasers of shares of Class A Common Stock in the Offerings will not receive
any portion of the Dividend or the Second Dividend, if any.

The Company anticipates that, other than with respect to the foregoing
Dividend and Second Dividend, if any, all earnings will be retained for the
foreseeable future for use in the operation of the business. The New Credit
Facility contains no restrictions on the Company's ability to pay dividends,
except for covenants relating to the maintenance of net worth and leverage
ratios. The Company's future dividend policy will depend upon the future results
of operations, capital requirements and financial condition of the Company, and
other factors considered relevant by the Board of Directors, including any
contractual or statutory restrictions on the Company's ability to pay dividends.
For certain information regarding distributions made by the Company prior to the
date hereof, see "Reorganization and Related Transactions", "Capitalization",
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations".

25
26

CAPITALIZATION

The following unaudited table sets forth (i) the actual capitalization of
the Company at March 29, 1997, (ii) the pro forma capitalization of the Company
as of such date, as adjusted to give effect to the Reorganization, the Trademark
Acquisition, the PRC Acquisition, the declaration by the Company of the Dividend
and the issuance of the Reorganization Notes, in aggregate, of $85.8 million,
$44.4 million of which will be paid from the proceeds of the New Credit
Facility, and the recording of a deferred tax asset concurrent with becoming
subject to additional Federal, state and local income taxes resulting from the
termination of the Company's partnership status and the New Credit Facility and
(iii) the pro forma capitalization of the Company as of such date as further
adjusted to reflect the sale of 9,400,000 shares of Class A Common Stock offered
by the Company hereby at an initial public offering price of $26.00 per share
and the application of the net proceeds received by the Company therefrom as
described under "Use of Proceeds". The table should be read in conjunction with
the Combined Financial Statements of the Company and the related notes thereto
included elsewhere in this Prospectus. See "Unaudited Pro Forma Combined
Financial Information" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations".

MARCH 29, 1997
-----------------------------------------
PRO FORMA,
PRO FORMA, AS FURTHER
ACTUAL AS ADJUSTED ADJUSTED
-------- ----------- ----------
(IN THOUSANDS, EXCEPT SHARE DATA)

Short-term debt:
Notes and acceptances payable -- banks..................... $ 26,777 $ 185,071 $ 24,481
Current portion of long-term debt.......................... 22,248 -- --
Current portion of subordinated notes...................... 20,000 -- --
Dividend and Reorganization Notes payable.................. -- 41,368 --
-------- -------- --------
Total short-term debt................................... 69,025 226,439 24,481

Long-term debt:
Bank....................................................... 47,875 -- --
Subordinated notes......................................... 24,000 24,000 --
-------- -------- --------
Total long-term debt.................................... 71,875 24,000 --

Partners' capital and stockholders' equity:
Class A Common Stock, par value $.01 per share; 500,000,000
shares authorized; 13,744,000 and 29,847,846 shares
issued and outstanding, pro forma as adjusted and pro
forma as further adjusted, respectively(1).............. -- 137 299
Class B Common Stock, par value $.01 per share; 100,000,000
shares authorized; 50,335,021 and 45,935,021 shares
issued and outstanding, pro forma, as adjusted and pro
forma, as further adjusted, respectively................ -- 504 459
Class C Common Stock, par value $.01 per share; 70,000,000
shares authorized; 24,920,979 and 22,720,979 shares
issued and outstanding, pro forma, as adjusted and pro
forma, as further adjusted, respectively................ -- 249 227
Additional paid-in capital 199,435 426,665
Partners' capital and retained earnings.................... 260,837 -- --
Cumulative translation adjustment.......................... (152) -- --
-------- -------- --------
Total partners' capital and stockholders' equity........ 260,685 200,325 427,650
-------- -------- --------
Total capitalization............................... $401,585 $ 450,764 $452,131
======== ======== ========

- ---------------

(1) Excludes an aggregate of 10,500,000 shares of Class A Common Stock which are
reserved for issuance under the Company's 1997 Stock Incentive Plan and 1997
Non-Employee Director Option Plan. The Company expects to grant options for
approximately 4,200,000 shares of Class A Common Stock to certain employees
of the Company at an exercise price equal to the initial public offering
price on the closing date of the Offerings. See "Management -- 1997 Stock
Incentive Plan" and "-- 1997 Non-Employee Director Option Plan".

26
27

DILUTION

The net tangible book value of the Company at March 29, 1997 was
approximately $243.2 million. Assuming the Reorganization had occurred as of
March 29, 1997, the net tangible book value of the Company as of such date would
have been approximately $2.73 per share. Net tangible book value per share
represents the amount of total tangible assets less total liabilities, divided
by the number of shares of Common Stock then outstanding. Without taking into
account any changes in net tangible book value attributable to operations after
March 29, 1997, after giving effect to the Reorganization, the sale of the Class
A Common Stock offered hereby at an initial public offering price of $26.00 per
share and the application of the net proceeds as described under "Use of
Proceeds", the pro forma net tangible book value as adjusted at March 29, 1997
would have been $403.3 million, or $4.09 per share of Common Stock. This
represents an immediate increase in pro forma net tangible book value as
adjusted of $2.13 per share of Common Stock to existing stockholders and an
immediate dilution of $21.91 per share of Common Stock to purchasers of Class A
Common Stock in the Offerings. The following table illustrates such per share
dilution:

Assumed initial public offering price per share..................... $26.00
Net tangible book value per share at March 29, 1997............... $2.73
======
Pro forma net tangible book value per share at March 29, 1997,
after giving effect to the declaration of the Dividend and the
issuance of the Reorganization Notes, the recording of a
deferred tax asset, and the PRC Acquisition.................... $1.96
Increase in net tangible book value per share attributable to
completion of the Offerings.................................... 2.13
------
Pro forma net tangible book value as adjusted per share after
giving effect to the Reorganization and the
Offerings(1)(2)(3)............................................. 4.09
------
Dilution per share to new stockholders(4)......................... $21.91
======

- ---------------

(1) Pro forma net tangible book value as adjusted per share is determined by
dividing net tangible book value of the Company (tangible assets less
liabilities) assuming the Reorganization had taken place on March 29, 1997,
by the 89,000,000 shares of Common Stock outstanding after giving effect to
the Reorganization.

(2) Reflects an aggregate of 98,503,846 shares of Common Stock that will be
outstanding upon completion of the Offerings including 26,923 shares of
Class A Common Stock expected to be issued in connection with the PRC
Acquisition and the award of 76,923 shares of Class A Common Stock granted
to Mr. Newman simultaneous with the commencement of the Offerings.

(3) Excludes an aggregate of 10,500,000 shares of Class A Common Stock reserved
for issuance under the Company's 1997 Stock Incentive Plan and 1997
Non-Employee Director Option Plan. The Company expects to grant options for
approximately 4,200,000 shares of Class A Common Stock to certain employees
of the Company at an exercise price equal to the initial public offering
price simultaneous with the commencement of the Offerings. The exercise of
such options would not result in further dilution in book value to
purchasers in the Offerings. See "Management -- 1997 Stock Incentive Plan"
and "-- 1997 Non-Employee Director Option Plan".

(4) Dilution is determined by subtracting pro forma net tangible book value per
share assuming the Reorganization had taken place on March 29, 1997, and
after giving effect to the receipt of the net proceeds of the Offerings and
the application of such proceeds as described in "Use of Proceeds", from the
initial public offering price of $26.00 per share.

27
28

The following table summarizes on a pro forma basis as of March 29, 1997
the differences between the number of shares of Common Stock purchased from the
Company, the total consideration paid, and the average price per share paid by
the existing stockholders and by the purchasers of Class A Common Stock in the
Offerings at an initial public offering price of $26.00 per share.

TOTAL
SHARES PURCHASED CONSIDERATION AVERAGE
---------------------- ------------------------ PRICE PER
NUMBER PERCENT AMOUNT PERCENT SHARE
---------- ------- ------------ ------- ---------

Existing
stockholders(1)......... 68,900,000 70% $138,011,000 15% $ 2.00
New stockholders........ 29,500,000 30 767,000,000 85 26.00
---------- ----- ----------- -----
Total......... 98,400,000 100% $905,011,000 100%
========== ===== =========== =====

- ---------------

(1) Excludes 26,923 shares of Class A Common Stock expected to be issued in
connection with the PRC Acquisition and 76,923 shares of Class A Common
Stock awarded to Mr. Newman simultaneous with the commencement of the
Offerings.

28
29

SELECTED COMBINED FINANCIAL DATA

The selected historical financial data presented below as of and for each
of the fiscal years in the five-year period ended March 29, 1997 have been
derived from the Company's audited Combined Financial Statements. The financial
data should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations", the Combined Financial
Statements and Notes thereto, the unaudited Combined Financial Statements and
Notes thereto and other financial data included elsewhere in this Prospectus.

FISCAL YEAR ENDED
--------------------------------------------------------
APRIL 3, APRIL 2, APRIL 1, MARCH 30, MARCH 29,
1993 1994 1995 1996 1997
-------- -------- -------- ---------- ----------
(IN THOUSANDS)

STATEMENT OF INCOME DATA:
Net sales.............................. $684,923 $726,568 $746,595 $ 909,720 $1,043,330
Licensing revenue...................... 82,418 84,174 100,040 110,153 137,113
-------- -------- -------- ---------- ----------
Net revenues........................... 767,341 810,742 846,635 1,019,873 1,180,443

Cost of goods sold..................... 425,322 466,525 474,999 583,546 648,597
-------- -------- -------- ---------- ----------
Gross profit........................... 342,019 344,217 371,636 436,327 531,846

Selling, general and administrative
expenses............................. 259,941 262,825 261,506 309,207 374,483
-------- -------- -------- ---------- ----------

Income from operations................. 82,078 81,392 110,130 127,120 157,363

Interest expense....................... 19,209 15,880 16,450 16,287 13,660
Equity in net loss of affiliate........ -- 2,837 262 1,101 3,599
-------- -------- -------- ---------- ----------

Income before income taxes............. 62,869 62,675 93,418 109,732 140,104
Provision for income taxes............. 4,960 8,778 13,244 10,925 22,804
-------- -------- -------- ---------- ----------

Net income............................. $ 57,909 $ 53,897 $ 80,174 $ 98,807 $ 117,300
======== ======== ======== ========== ==========

APRIL 3, APRIL 2, APRIL 1, MARCH 30, MARCH 29,
1993 1994 1995 1996 1997
-------- -------- -------- ---------- ----------
(IN THOUSANDS)

BALANCE SHEET DATA:
Working capital........................ $ 83,522 $ 84,663 $221,050 $262,844 $212,372
Inventories............................ 212,631 209,540 271,220 269,113 222,147
Total assets........................... 429,760 456,076 487,547 563,673 576,743
Total debt............................. 240,857 230,034 186,361 199,645 140,900
Partners' capital and stockholders'
equity............................... 107,832 118,037 188,579 237,653 260,685

29
30

UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

The following Unaudited Pro Forma Combined Financial Information is derived
from the Company's Combined Financial Statements. The Unaudited Pro Forma
Combined Statement of Income gives effect to the Reorganization, the PRC
Acquisition and certain other adjustments as if they occurred on March 31, 1996.
The Unaudited Pro Forma Combined Balance Sheet gives effect to the
Reorganization, the PRC Acquisition, the New Credit Facility, and certain other
adjustments as if they had occurred on March 29, 1997. The Unaudited Pro Forma
Combined Balance Sheet, as adjusted, gives further effect to the Offerings at an
initial public offering price of $26.00 per share and the application of the
estimated net proceeds received by the Company therefrom as described under "Use
of Proceeds" as if they had occurred on March 29, 1997. See "Reorganization and
Related Transactions", "Use of Proceeds", "Capitalization", and "Management's
Discussion and Analysis of Financial Condition and Results of Operations".

The pro forma adjustments are based upon available information and certain
assumptions that the Company believes are reasonable under the circumstances.
The Unaudited Pro Forma Combined Financial Information should be read in
conjunction with the Combined Financial Statements of the Company and related
notes, "Management's Discussion and Analysis of Financial Condition and Results
of Operations", and other financial information included elsewhere in this
Prospectus. This pro forma combined financial information is provided for
informational purposes only and does not purport to be indicative of the results
which would have been obtained had the Reorganization, the Offerings, and the
other adjustments been completed on the dates indicated or which may be expected
to occur in the future.

30
31

UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME

FISCAL YEAR ENDED
MARCH 29, 1997
--------------------------------------------
ACTUAL PRO FORMA PRO FORMA
COMBINED ADJUSTMENTS COMBINED
---------- ----------- -----------
(IN THOUSANDS, EXCEPT SHARE DATA)

Net sales........................................ $1,043,330 $88,356(1) $ 1,131,686
Licensing revenue................................ 137,113 137,113
--------- ---------
Net revenues..................................... 1,180,443 1,268,799
Cost of goods sold............................... 648,597 38,406(1) 687,003
--------- ---------
Gross profit..................................... 531,846 581,796
Selling, general and administrative expenses..... 374,483 53,812(1)
868(1) 429,163
--------- ---------
Income from operations........................... 157,363 152,633
Interest expense................................. 13,660 2,153(1) 15,813
Equity in net loss of affiliates................. 3,599 (3,599)(1) --
--------- ---------
Income before income taxes....................... 140,104 136,820
Provision for income taxes....................... 22,804 34,660(2) 57,464
--------- ---------
Net income....................................... $ 117,300 $ 79,356
========= =========
Per share information(3)......................... $ 0.87
=========
Number of common shares assumed outstanding(3)... 90,824,645
=========
Supplementary pro forma net income per common
share(4)....................................... $ 0.81
=========

- ---------------
(1) Adjustments to reflect the PRC Acquisition accounted for under the purchase
method. As a result of this transaction, the Company's combined statement of
income has been adjusted to reflect the consolidation of PRC's operations
from March 31, 1996, the amortization of goodwill over 25 years of $868 for
the fiscal year ended March 29, 1997, recorded as a result of the
acquisition, and the elimination of the Company's equity in net loss of PRC.

(2) Adjustment to reflect income taxes based upon pro forma pre-tax income as if
the Company had been subject to additional Federal, state and local income
taxes as of March 31, 1996, based upon a pro forma effective tax rate of
42%.

(3) Pro forma net income per share is based upon (a) 89,000,000 shares of Common
Stock outstanding as a result of the Reorganization and the Trademark
Acquisition, increased by (b) the sale of 1,720,799 shares of Class A Common
Stock by the Company at an initial public offering price of $26.00 per share
($24.04, net of expenses), the proceeds of which would be necessary to pay
approximately $41,368 in satisfaction of the Dividend and Reorganization
Notes; (c) 26,923 shares of Class A Common Stock expected to be issued in
connection with the PRC Acquisition; and (d) 76,923 shares of Class A Common
Stock granted to Mr. Newman simultaneous with the commencement of the
Offerings. See "Reorganization and Related Transactions" and
"Management -- 1997 Stock Incentive Plan".

(4) Supplementary pro forma net income per share is based upon the average
number of shares of Common Stock used in the calculation of pro forma net
income per share, increased by (a) the sale of 998,336 shares of Class A
Common Stock being sold by the Company, assuming an initial public offering
price of $26.00 per share ($24.04, net of expenses), the proceeds of which
would be necessary to repay approximately $24,000 outstanding under the
Subordinated Notes (as defined) and (b) the sale of 6,680,116 shares of
Class A Common Stock by the Company, assuming an initial public offering
price of $26.00 per share ($24.04, net of expenses), the proceeds of which
would be necessary to repay amounts outstanding under the Company's New
Credit Facility of approximately $160,590.

31
32

UNAUDITED PRO FORMA COMBINED BALANCE SHEET

AS OF MARCH 29, 1997
-------------------------------------------------------------------------
ACQUISITION,
DIVIDEND
DECLARATION,
ISSUANCE OF
REORGANIZATION
NOTES, NEW
CREDIT FACILITY PRO PRO FORMA
ACTUAL AND FORMA ADJUSTMENTS PRO FORMA,
COMBINED REORGANIZATION COMBINED OFFERING AS ADJUSTED
-------- ---------------- -------- ----------- -----------
(IN THOUSANDS)

Current assets
Cash and cash equivalents.......................... $29,599 $ 2,062(1) $31,661 $ --(6) $ 31,661
Accounts receivable, net........................... 144,303 1,769(1) 146,072 146,072
Inventories........................................ 222,147 23,944(1) 246,091 246,091
Prepaid expenses and other......................... 40,290 (20,292)(1) 38,477 38,477
1,522(1)
16,957(2)
-------- -------- -------- -------- --------
Total current assets......................... 436,339 25,962 462,301 -- 462,301
Property and equipment, net.......................... 83,240 25,488(1) 108,728 108,728
Investment in and advances to affiliate.............. 17,977 (17,977)(1) --
Other assets......................................... 39,187 24,972(1) 72,634 72,634
8,475(2)
-------- -------- -------- -------- --------
Total assets................................. $576,743 $ 66,920 $643,663 $ -- $ 643,663
======== ======== ======== ======== ========
Current liabilities
Notes and acceptances payable -- banks............. $26,777 $ 9,700(1) $185,071 $(160,590)(6) $ 24,481
148,594(3)
Current portion of long-term debt.................. 22,248 (22,248)(3) -- --
Current portion of subordinated notes.............. 20,000 (20,000)(3) -- --
Dividend and Reorganization Notes payable.......... -- (44,424)(3) 41,368 (41,368)(6) --
85,792(4)
Accounts payable................................... 89,417 3,761(1) 93,178 93,178
Accrued expenses and other......................... 65,525 10,844(1) 76,369 (1,367)(6) 75,002
-------- -------- -------- -------- --------
Total current liabilities.................... 223,967 171,019 395,986 (203,325) 192,661
Long-term debt....................................... 47,875 12,629(1) -- --
(60,504)(3)
50,000(3)
Other noncurrent liabilities......................... 20,216 3,136(1) 23,352 23,352
Subordinated notes................................... 24,000 -- 24,000 (24,000)(6) --
Partners' capital and stockholders' equity
Common stock....................................... -- 890(5) 890 95(6) 985
Additional paid-in capital......................... -- 199,435(5) 199,435 227,230(6) 426,665
Partners' capital and retained earnings............ 260,837 25,432(2)
(200,477)(5)
(85,792)(4) -- --
Cumulative translation adjustment.................. (152) 152(5) -- --
-------- -------- -------- -------- --------
Total partners' capital and stockholders'
equity..................................... 260,685 (60,360) 200,325 227,325 427,650
-------- -------- -------- -------- --------
Total liabilities and partners' capital and
stockholders' equity....................... $576,743 $ 66,920 $643,663 $ -- $ 643,663
======== ======== ======== ======== ========

- ---------------
(1) Adjustments to reflect the PRC Acquisition accounted for under the purchase
method. As a result of this transaction, the Company's combined balance
sheet has been adjusted to reflect the consolidation of PRC's balance sheet,
the elimination of the Company's investment in PRC, the elimination of the
Company's receivables due from PRC ($20,292) and the recording of the excess
of the purchase price ($10,400) over net assets acquired which has been
allocated to goodwill ($21,708). The Company will amortize goodwill over 25
years.

(2) Adjustments to record a deferred tax asset of $25,432, in addition to
approximately $2,805 of certain Federal, state and local deferred tax assets
previously recorded, which the Company will record concurrently with the
termination of its partnership status. The deferred income taxes will
reflect the net tax effect of temporary differences, primarily uniform
inventory capitalization, depreciation, allowance for doubtful accounts and
other accruals, between the carrying amounts of assets and liabilities for
financial reporting and the amounts used for income tax purposes.

(3) Reflects the proceeds of $185,071 under the New Credit Facility, used for
the repayment of $139,905 under the Polo LP credit facility, the repayment
of $31,119 under the Womenswear LP credit facility and the repayment of
$14,047 under the PRC credit facility.

(4) Reflects that portion of the Dividend and the Reorganization Notes
representing undistributed net earnings through March 29, 1997.

(5) Reflects the reclassification of partners' capital and retained earnings and
cumulative translation adjustment to additional paid-in capital as a result
of the Reorganization.

(6) Represents the estimated net proceeds of $225,958 from the sale of Class A
Common Stock offered by the Company, the issuance of 26,923 shares of Class
A Common Stock in connection with the PRC Acquisition, the issuance of
76,923 shares of Class A Common Stock granted to Mr. Newman, the repayment
of the Dividend and Reorganization Notes payable of $41,368, the repayment
of the Subordinated Notes of $24,000 and the repayment of amounts
outstanding under the New Credit Facility of $160,590.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with
the "Selected Combined Financial Data" and the Company's combined financial
statements and the related notes thereto which are included elsewhere in this
Prospectus. The Company utilizes a 52-53 week fiscal year ending on the Saturday
nearest March 31. Accordingly, fiscal years 1993, 1994, 1995, 1996 and 1997
ended on April 3, 1993, April 2, 1994, April 1, 1995, March 30, 1996 and March
29, 1997, respectively.

OVERVIEW

The Company began operations in 1968 as a designer and marketer of premium
quality men's clothing and sportswear. Since inception, Polo, through internal
operations and in conjunction with its licensing partners, has grown through
increased sales of existing product lines, the introduction of new brands and
products, expansion into international markets and development of its retail
operations. Over the last five years, revenues have increased from $767.3
million in fiscal 1993 to $1.2 billion in fiscal 1997, while income from
operations has grown from $82.1 million in fiscal 1993 to $157.4 million in
fiscal 1997. Polo's net revenues are generated from its four integrated
operations: wholesale, Home Collection, direct retail and licensing alliances.
Licensing revenue includes royalties received from Home Collection licensing
partners.

FISCAL YEAR PRO FORMA
------------------------------------------------------------ FISCAL 1997(4)
1993(3) 1994 1995 1996 1997 (UNAUDITED)
-------- -------- -------- ---------- ---------- --------------
(IN THOUSANDS)

Wholesale net sales(1)(2)................. $432,984 $508,402 $496,876 $ 606,022 $ 663,358 $ 623,041
Retail sales(2)........................... 251,939 218,166 249,719 303,698 379,972 508,645
-------- -------- -------- -------- ---------- ----------
Net sales............................... 684,923 726,568 746,595 909,720 1,043,330 1,131,686
Licensing revenue(1)...................... 82,418 84,174 100,040 110,153 137,113 137,113
-------- -------- -------- -------- ---------- ----------
Total net revenues...................... $767,341 $810,742 $846,635 $1,019,873 $1,180,443 $1,268,799
======== ======== ======== ======== ========== ==========

- ---------------

(2) In February 1993, the Company entered into a joint venture to combine
certain of its retail operations with those of its joint venture partner,
Perkins Shearer Venture, to form PRC. Prior to such date, retail sales
include sales by 19 retail stores, subsequently transferred to PRC.
Subsequent to such date, the Company accounted for its investment in PRC
using the equity method and as such, did not consolidate PRC's operations.
Accordingly, PRC's net revenues are excluded from retail sales for fiscal
1994 through fiscal 1997, while wholesale net sales reflect the Company's
sales to PRC during these periods. Simultaneous with the closing of the
Offerings, the Company will consummate the PRC Acquisition. See
"Reorganization and Related Transactions -- PRC Acquisition".

(3) Fiscal 1993 was a 53 week year.

(4) Pro forma financial information presented above gives effect to the PRC
Acquisition as if it had occurred on March 31, 1996, the first day of fiscal
1997. See "Reorganization and Related Transactions" and "Unaudited Pro Forma
Combined Financial Information".

Wholesale net sales result from the sale by the Company of men's and
women's apparel to wholesale customers, principally to major department stores,
specialty stores and non-Company operated Polo stores located throughout the
United States. Net sales for the wholesale division have increased from $433.0
million in fiscal 1993 to $663.4 million in fiscal 1997. This increase is a
result of growth in sales of the Company's menswear products driven by the
introduction of new brands such as Polo Sport and growth in sales of products
under existing brands. The fiscal 1996 and 1997 wholesale net sales include
womenswear wholesale net sales of $36.7 million and $98.8 million, respectively,
since the date of the acquisition of certain assets of its former unaffiliated
womenswear licensing partner.

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34

Polo's retail sales are generated from the Polo stores and outlet stores
operated by the Company. Since the beginning of fiscal 1994, the Company has
added four Polo stores and 27 outlet stores (net of nine outlet store closings).
At March 29, 1997, the Company operated six Polo stores and 65 outlet stores.
Retail sales have grown from $218.2 million in fiscal 1994 to $380.0 million in
fiscal 1997.

Prior to February 1993, the Company operated 22 Polo stores. In February
1993, the Company entered into a joint venture to combine 19 of its Polo stores
with those of its joint venture partner to form PRC. As of March 29, 1997, PRC
operated 21 Polo stores located throughout the United States. On March 21, 1997,
the Company entered into an agreement effective April 3, 1997 to acquire the
remaining 50% interest from its joint venture partner. Prior to the PRC
Acquisition, the Company accounted for its interest in PRC under the equity
method. Effective for fiscal 1998, the Company will consolidate PRC and account
for the transaction under the purchase method. Accordingly, on a pro forma
basis, wholesale net sales by the Company to PRC are eliminated and PRC net
revenues are reflected as retail sales. Assuming the PRC Acquisition had taken
place at March 31, 1996, pro forma wholesale net sales and retail sales in
fiscal 1997 would have been $623.0 million and $508.7 million, respectively. The
Company believes the PRC Acquisition did not have a material impact on pro forma
operating income for fiscal 1997. See "Reorganization and Related
Transactions -- PRC Acquisition".

Licensing revenue consists of royalties paid to the Company under its
licensing alliances. During fiscal 1997, product, international, and home
licensing alliances accounted for 37.3%, 29.3% and 33.4%, respectively, of total
licensing revenue. Through these alliances, Polo combines its core skills with
the product or geographic competencies of its partners to create and develop
specific businesses. Polo develops the products and marketing for, and in
conjunction with, its 19 product and 14 international licensing partners who
manufacture, advertise, sell and distribute the particular products for which
the Company is paid royalties. These royalties generally range from five to
eight percent of licensing partners' sales of licensed products. Examples of
Polo's licensed products include sheets and towels, fragrances and men's
sportswear. While product licensing partners may employ their own designers,
pursuant to their license agreements with the Company, the Company oversees the
design of all its products. Polo works closely with licensing partners to
coordinate marketing and distribution strategies and the design and construction
of shop-within-shop boutiques, and participates in the long-range planning and
development of its licensing partners' Polo businesses. See
"Business -- Licensing Alliances". In addition to performing these functions,
pursuant to the terms of its license agreements, Polo acts as sales and
marketing agent for its domestic Home Collection licensing partners. The
Company's license agreements with its domestic Home Collection licensing
partners generally contain provisions which allow the Company to exercise
control over, among other things, marketing and advertising and typically
require such licensing partners to provide samples of licensed products for the
Company's Home Collection showroom and sales force. Together with its Home
Collection licensing partners, representatives of the Company's design,
merchandising, production and sales staffs collaborate to conceive, develop and
merchandise the various products as a complete home furnishing collection.
Polo's personnel market and sell the products to domestic customers and certain
international accounts. As a result, Polo generally receives a higher royalty
rate from Home Collection licensing partners relative to other licensing
alliances, which rates generally range from 15% to 25%. Under these alliances,
Polo is less exposed to financial risk than if the Company invested in the
infrastructure and operation of these businesses directly. The growth of
existing and development of new businesses under licensing alliances has
resulted in an increase in licensing revenue from $82.4 million in fiscal 1993
to $137.1 million in fiscal 1997.

Prior to the Offerings, the Company will complete the Trademark Acquisition
whereby the Company will acquire from an entity under common control the
trademarks and rights under a licensing agreement related to its U.S. fragrance
business and the interest it did not already own in another related entity that
holds the trademarks relating to its international licensing business. See
"Reorganization and Related Transactions -- Trademark Acquisition".

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35

Prior to the Reorganization, the Company's operations were conducted
predominantly through a partnership structure. Accordingly, the earnings of the
Company (other than earnings of certain retail operations) were included in the
taxable income of the Company's partners for Federal and certain state income
tax purposes, and the Company has generally not been subject to income tax on
such earnings, other than certain state and local franchise and similar taxes.
In connection with the Reorganization, the Company will become subject to such
taxes. In addition, as a result of the Reorganization, the Company will record a
deferred tax asset and a corresponding tax benefit in its statement of income in
accordance with the provisions of Statement of Accounting Standards No. 109,
Accounting for Income Taxes. Assuming the Offerings had occurred at March 29,
1997, the deferred tax asset and corresponding tax benefit would have been
approximately $25.4 million. The Company's pro forma effective tax rate,
excluding the non-recurring tax benefit discussed above, for fiscal 1997 was
42%. The effect of taxes in Results of Operations is not discussed below because
the historic taxation of the operations of the Company is not meaningful with
respect to periods following the Reorganization.

In connection with the Company's growth strategy, the Company plans to
introduce new products and brands and expand its retail operations, including
the opening of flagship stores. Implementation of these strategies may require
significant investments for advertising, furniture and fixtures, infrastructure,
design and additional inventory. There can be no assurance, notwithstanding the
Company's investments, that its growth strategies will be successful.

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, the percentage
relationship to net revenues of certain items in the Company's combined
statements of income for the periods shown below:

FISCAL YEAR ENDED
-------------------------
1995 1996 1997
----- ----- -----

Net sales........................................................ 88.2% 89.2% 88.4%
Licensing revenue................................................ 11.8 10.8 11.6
----- ----- -----
Net revenues..................................................... 100.0 100.0 100.0
----- ----- -----
Gross profit..................................................... 43.9 42.8 45.1
Selling, general and administrative expenses..................... 30.9 30.3 31.8
----- ----- -----
Income from operations........................................... 13.0% 12.5% 13.3%
===== ===== =====

FISCAL 1997 COMPARED TO FISCAL 1996

NET SALES. Net sales increased 14.7% to $1.043 billion in fiscal 1997 from
$909.7 million in fiscal 1996. Wholesale net sales increased 9.5% to $663.4
million in fiscal 1997 from $606.0 million in fiscal 1996. This increase
primarily reflects the benefit of a full year of womenswear sales in fiscal 1997
compared to five and one-half months in fiscal 1996. Retail sales increased by
25.1% to $380.0 million in fiscal 1997 from $303.7 million in fiscal 1996. Of
this increase, $58.8 million is attributable to the opening of three new Polo
stores and seven new outlet stores (net of four outlet store closings) in fiscal
1997 and the benefit of a full year of operations for seven outlet stores opened
in fiscal 1996. Comparable store sales in fiscal 1997 increased by 6.3% or $17.5
million. Comparable store sales represent net sales of stores open in both
reporting periods for the full portion of such periods.

LICENSING REVENUE. Licensing revenue increased 24.4% to $137.1 million in
fiscal 1997 from $110.2 million in fiscal 1996. This increase reflects the
launch of Polo Jeans Co. in fiscal 1997 and an overall increase in sales of
licensed products, particularly Chaps, accessories and Home Collection.

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36

GROSS PROFIT. Gross profit as a percentage of net revenues increased to
45.1% in fiscal 1997 from 42.8% in fiscal 1996. The increase was primarily
attributable to the increase, as a percentage of total net revenues, in net
sales of the Company's higher margin retail sales (relative to wholesale sales)
and to increased licensing revenue. In fiscal 1997 wholesale gross margins
improved slightly while retail gross margins increased significantly due to a
reduction in markdowns as compared to fiscal 1996. Licensing revenue has no
associated cost of goods sold.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative ("SG&A") expenses increased to $374.5 million or 31.8% of net
revenues in fiscal 1997 from $309.2 million or 30.3% of net revenues in fiscal
1996. This increase as a percentage of net revenues was primarily attributable
to investment in organizational infrastructure to support growth, increased
advertising, marketing and public relations expenditures to support the
Company's brands, and personnel and start-up costs associated with the opening
of three Polo stores in fiscal 1997. Additionally, SG&A expenses in fiscal 1997
include a full year of womenswear SG&A expenses as compared to five and one-half
months in the prior period.

INTEREST EXPENSE. Interest expense decreased to $13.7 million in fiscal
1997 from $16.3 million in fiscal 1996 due to lower average borrowing levels as
a result of a reduction in overall inventory levels. Cash flows from operations
were used to reduce average debt levels throughout fiscal 1997.

EQUITY IN NET LOSS OF AFFILIATE. Equity in net loss of affiliate represents
the Company's 50% equity interest in PRC. Such losses increased to $3.6 million
in fiscal 1997 from $1.1 million in fiscal 1996, primarily as a result of lost
revenues and expenses associated with temporary store closings for renovations
in fiscal 1997.

FISCAL 1996 COMPARED TO FISCAL 1995

NET SALES. Net sales increased 21.8% to $909.7 million in fiscal 1996 from
$746.6 million in fiscal 1995. Wholesale net sales increased 22.0% to $606.0
million in fiscal 1996 from $496.9 million in fiscal 1995. Wholesale growth
reflects increased menswear sales of 14.6% to $569.3 million in fiscal 1996 from
$496.9 million in fiscal 1995 resulting primarily from growth in existing
brands, particularly Polo Sport, as well as increased sales under the Company's
basic stock replenishment program. Under this program, Polo offers certain basic
styles year round which are generally shipped within one to five days of order
receipt. See "Business -- Domestic Wholesale and Home Collection Customers and
Service -- Basic Stock Replenishment Program". Increased sales under this
program are due to the introduction of new products and a higher percentage of
order fulfillment. Additionally, the increase reflects the inclusion of
womenswear sales of $36.7 million subsequent to the October 1995 acquisition.
Retail sales increased 21.6% to $303.7 million in fiscal 1996 from $249.7
million in fiscal 1995. Of this increase, $42.2 million is attributable to four
new outlet stores opened in fiscal 1996 (net of three outlet store closings) and
the benefit of a full year of operations for nine outlet stores opened in fiscal
1995. Comparable store sales in fiscal 1996 increased 5.4% or $11.8 million.

LICENSING REVENUE. Licensing revenue increased 10.2% to $110.2 million in
fiscal 1996 from $100.0 million in fiscal 1995. This increase is primarily a
result of additional sales of Home Collection products and the expansion of the
European and Asian businesses. This increase was partially offset by a reduction
in womenswear licensing revenue as a result of Polo's acquisition of that
business from a former licensing partner.

GROSS PROFIT. Gross profit as a percentage of net revenues decreased to
42.8% in fiscal 1996 from 43.9% in fiscal 1995. This decrease was primarily
attributable to a decline in wholesale gross margins in fiscal 1996 resulting
from a decrease in menswear gross margins associated with the sale of excess
inventory. The decrease in gross profit as a percentage of net revenues also
resulted from a decrease in licensing revenue as a percentage of total net
revenues. Retail gross margins were constant in fiscal 1996 as compared to the
prior year.

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37

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. SG&A expenses increased to
$309.2 million in fiscal 1996 from $261.5 million in fiscal 1995. As a
percentage of net revenues, SG&A expenses decreased to 30.3% in fiscal 1996 from
30.9% in fiscal 1995. This improvement reflects overall declines in SG&A
expenses resulting from cost containment efforts in certain expense areas and
expense leverage associated with the Company's growth. The dollar increase in
SG&A expenses primarily reflects costs associated with the expansion of retail
operations and the inclusion of womenswear SG&A expenses following the
acquisition. Additionally, advertising, marketing and public relations
expenditures increased to support the Company's brands and image.

INTEREST EXPENSE. Interest expense decreased to $16.3 million in fiscal
1996 from $16.5 million in fiscal 1995 primarily due to lower average
outstanding borrowing levels.

EQUITY IN NET LOSS OF AFFILIATE. Equity in net loss of affiliate increased
to $1.1 million in fiscal 1996 from $0.3 million in fiscal 1995 primarily as a
result of costs associated with six store closings in fiscal 1996.

LIQUIDITY AND CAPITAL RESOURCES

The Company's main sources of liquidity historically have been cash flows
from operations, credit facilities and partners' financing. The Company's
capital requirements primarily result from working capital needs, investing
activities including construction and renovation of shop-within-shop boutiques,
retail expansion and other corporate activities.

Net cash provided by operating activities increased to $203.6 million in
fiscal 1997 from $91.3 million in fiscal 1996, primarily as a result of reduced
inventories and improved operating results. The decrease in inventories is a
direct result of increased fulfillment of customer orders and improved supply
chain management. The net cash used for investing activities decreased to $38.6
million in fiscal 1997 from $49.0 million in fiscal 1996, principally reflecting
the use of $39.7 million in cash to acquire the operations of the Company's
former womenswear licensing partner, Ralph Lauren Womenswear, Inc., a wholly
owned subsidiary of Bidermann, in fiscal 1996. See "Reorganization and Related
Transactions -- Reorganization". This decrease was partially offset by a
substantial increase in capital expenditures in fiscal 1997. Net cash used in
financing activities increased to $149.0 million in fiscal 1997 from $33.9
million in fiscal 1996. This increase was primarily due to a substantial
reduction in short-term borrowings in fiscal 1997 associated with the Company's
reduced level of inventories and an increase in partner distributions.

Prior to the Reorganization, the earnings of the Company (except for
earnings of certain retail operations) were included in the taxable income of
the Company's partners for Federal and certain state income tax purposes, and
the Company has generally not been subject to income tax on such earnings, other
than certain state and local franchise and similar taxes. As a result of the
Offerings, the Company's immediate cash flow needs will reflect the elimination
of distributions to the partners. Partially offsetting these changes will be the
application of funds for the payment of additional Federal, state and local
income taxes.

Simultaneous with the closing of the Reorganization, the Company entered
into the New Credit Facility and used the borrowings under the New Credit
Facility to refinance the amounts outstanding under the Polo LP credit facility,
(approximately $111.8 million at the time of the Reorganization) and to repay in
full approximately $56.6 million in aggregate of the borrowings outstanding
under the Womenswear LP credit facility and the PRC credit facility, thereby
terminating such credit facilities. The New Credit Facility consists of a $375
million Revolver which will be reduced automatically upon completion of the
Offerings to $225 million. The Revolver will mature on December 31, 2002.
Interest is payable, at the Company's option, at the Base Rate or at the London
Interbank Offered Rate plus an interest margin. See "Use of Proceeds". The
agreement for the New Credit Facility contains customary representations,
warranties, covenants and events of default for bank financings for borrowers
similar to the Company, including covenants regarding maintenance of net worth
and leverage ratios, limitations on indebtedness and incurrences of liens, and
restrictions on sales of

37
38

assets and transactions with affiliates. Mr. Lauren and related entities are
obligated under the agreement to maintain a specified minimum percentage of the
voting power of the Company's Common Stock. See "Reorganization and Related
Transactions".

As of May 15, 1997, the Company had Subordinated Notes payable to its
partners in the amount of $24.0 million which bear interest at the prime rate
(8.5% at May 15, 1997) and are payable on March 1, 2001. The Company will use a
portion of the net proceeds it receives from the Offerings to prepay the amounts
due on March 1, 2001. See "Use of Proceeds".

Capital expenditures were $35.3 million, $5.6 million and $4.9 million in
fiscal 1997, fiscal 1996 and fiscal 1995, respectively. The increase in capital
expenditures in fiscal 1997 represents expenditures associated with the
Company's shop-within-shop boutique development program which includes new
shops, renovations and expansions. The Company plans to invest approximately
$150.0 million over the next two years for its retail stores including flagship
stores, shop-within-shop boutique development program and other capital
projects. See "Business -- Operations -- Wholesale -- Shop-within-Shop
Boutiques" and "-- Direct Retailing".

The Company extends credit to its customers, including those which have
accounted for significant portions of its net revenues. The Company had three
customers, Dillard Department Stores, Inc., Federated Department Stores, Inc.
and The May Department Stores Company, which in aggregate constituted 38%, 36%
and 48% of trade accounts receivable outstanding at April 1, 1995, March 30,
1996 and March 29, 1997, respectively. Additionally, the Company had three
licensing partners, WestPoint Stevens, Inc., Seibu Department Stores, Ltd. and
L'Oreal S.A./Cosmair Inc., which in aggregate constituted approximately 45%, 43%
and 39% of licensing revenue in fiscal 1995, 1996 and 1997, respectively.
Accordingly, the Company may have significant exposure in collecting accounts
receivable from its customers. The Company has credit policies and procedures
which it uses to manage its credit risk. See "Risk Factors -- Dependence on
Sales to a Limited Number of Large Department Store Customers; Risks Related to
Extending Credit to Customers".

Management believes that cash from ongoing operations and funds available
under its credit agreements will be sufficient to satisfy the Company's capital
requirements for the next 12 months.

SEASONALITY AND QUARTERLY FLUCTUATIONS

The Company's business is affected by seasonal trends, with higher levels
of wholesale sales in its second and fourth quarters and higher retail sales in
its second and third quarters. These trends result primarily from the timing of
seasonal wholesale shipments to retail customers and key vacation travel and
holiday shopping periods in the retail industry. As a result of the PRC
Acquisition and growth in the Company's retail operations and licensing revenue,
historical quarterly operating trends and working capital requirements may not
accurately reflect future performance. In addition, fluctuations in sales and
operating income in any fiscal quarter may be affected by the timing of seasonal
wholesale shipments and other events affecting retail.

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39

The following table sets forth certain unaudited quarterly information for
fiscal 1996 and fiscal 1997:

FOR THE QUARTERS ENDED
---------------------------------------------------------------------------------------------
JULY 1, SEPT. 30, DEC. 30, MAR. 30, JUNE 29, SEPT. 28, DEC. 28, MAR. 29,
1995 1995 1995 1996 1996 1996 1996 1997
--------- --------- --------- --------- --------- --------- --------- ---------
(IN MILLIONS)

Net sales(1).......... $ 179.8 $ 242.6 $ 245.4 $ 241.9 $ 199.3 $ 296.5 $ 268.6 $ 278.9
Licensing revenue(1).. 21.9 30.8 29.2 28.3 24.5 35.7 37.9 39.0
------ ------ ------ ------ ------ ------ ------ ------

Net revenues.......... 201.7 273.4 274.6 270.2 223.8 332.2 306.5 317.9

Gross profit.......... 90.8 118.7 114.4 112.4 103.6 147.5 137.8 143.0

Income from
operations.......... 24.2 40.7 30.3 31.9 21.3 58.2 34.9 43.0

- ---------------

(1) The Company purchased certain of the assets of its former womenswear
licensing partner, Ralph Lauren Womenswear Inc., a wholly owned subsidiary
of Bidermann, in October 1995 and, commencing with the fiscal quarter ended
December 30, 1995, net revenues reflect the inclusion of womenswear
wholesale sales and an elimination of licensing revenue associated with the
operations of the womenswear business after the acquisition.

EXCHANGE RATES

Inventory purchases from contract manufacturers in the Far East are
primarily denominated in United States dollars; however, purchase prices for the
Company's products may be affected by fluctuations in the exchange rate between
the United States dollar and the local currencies of the contract manufacturers,
which may have the effect of increasing the Company's cost of goods sold in the
future. During the last two fiscal years, exchange rate fluctuations have not
had a material effect on the Company's inventory cost. Additionally, certain
international licensing revenue could be materially affected by currency
fluctuations. From time to time, the Company hedges certain exposures to foreign
currency exchange rate changes arising in the ordinary course of business. See
"Risk Factors -- Foreign Currency Fluctuations".

NEW ACCOUNTING STANDARDS

In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 123, Accounting for Stock-Based
Compensation. This Statement will be effective in fiscal 1998 upon the
establishment of the Stock Incentive Plan by the Company in connection with the
Offerings. The Company will adopt only the disclosure provision of SFAS No. 123
and account for stock based compensation in accordance with Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, which
recognizes compensation cost based on the intrinsic value of the equity
instrument awarded.

SFAS No. 128, Earnings Per Share, effective for interim and annual periods
beginning after December 15, 1997, establishes standards for computing and
presenting earnings per share ("EPS") and simplifies the standards for computing
EPS currently found in Accounting Principles Board ("APB") Opinion No. 15,
Earnings Per Share. Common stock equivalents under APB Opinion No. 15, with the
exception of contingently issuable shares (shares issuable for little or no cash
consideration), are no longer included in the calculation of primary or basic
EPS. Under SFAS No. 128, contingently issuable shares are included in the
calculation of diluted EPS. Early adoption of this Statement is not permitted.
As the Company does not currently report EPS, it has not determined the impact
of adopting this Statement.

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SFAS No. 129, Disclosure of Information about Capital Structure, effective
for periods ending after December 15, 1997, establishes standards for disclosing
information about an entity's capital structure. This Statement requires
disclosure of the pertinent rights and privileges of various securities
outstanding (stock, options, warrants, preferred stock, debt and participation
rights) including dividend and liquidation preferences, participant rights, call
prices and dates, conversion or exercise prices and redemption requirements.
Adoption of this Statement will have no effect on the Company as it currently
discloses the information specified.

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BUSINESS

Polo Ralph Lauren Corporation is a leader in the design, marketing and
distribution of premium lifestyle products. For 30 years, Polo's reputation and
distinctive image have been consistently developed across an expanding number of
products, brands and international markets. The Company's brand names, which
include "Polo", "Polo by Ralph Lauren", "Polo Sport", "Ralph Lauren", "RALPH",
"Lauren", "Polo Jeans Co." and "Chaps", among others, constitute one of the
world's most widely recognized families of consumer brands. Directed by Ralph
Lauren, the internationally renowned designer, the Company believes it has
influenced the manner in which people dress and live in contemporary society,
reflecting an American perspective and lifestyle uniquely associated with Polo
and Ralph Lauren.

The Polo brand was established in 1967 when Mr. Lauren introduced a
collection of men's ties. In 1968, Polo was established as an independent
menswear company offering a line of premium quality men's clothing and
sportswear with a distinctive blend of innovation and tradition. The Company's
now famous polo player astride a horse logo and Ralph Lauren womenswear products
were introduced in 1971. In that same year, the first shop-within-shop boutique
dedicated to Polo Ralph Lauren products opened in Bloomingdale's flagship store
in New York City and the first Polo store was opened by an independent third
party. Commencing in 1973, womenswear products were produced and distributed by
a third party under the Company's first licensing alliance. From these
beginnings, the Polo and Ralph Lauren brands have been the foundation upon which
the Company has based its historic growth. The Company's net revenues, which are
comprised of wholesale and retail net sales and licensing revenue, have
increased from $767.3 million in fiscal 1993 to $1.2 billion in fiscal 1997, and
the Company's income from operations has grown from $82.1 million in fiscal 1993
to $157.4 million in fiscal 1997.

Polo combines its consumer insight and design, marketing and imaging skills
to offer, along with its licensing partners, broad lifestyle product collections
in four categories: apparel, home, accessories and fragrance. Apparel products
include extensive collections of menswear, womenswear and children's clothing.
The Ralph Lauren Home Collection offers coordinated products for the home
including bedding and bath products, interior decor and tabletop and gift items.
Accessories encompass a broad range of products such as footwear, eyewear,
jewelry and leather goods (including handbags and luggage). Fragrance and skin
care products are sold under the Company's Polo, Lauren, Safari and Polo Sport
brands, among others. Worldwide wholesale net sales of all products bearing the
Company's brands, generated by both Polo and its licensing partners, aggregated
approximately $2.9 billion in fiscal 1997 and are displayed in the chart below.
Of these sales, approximately 31% occurred outside the United States.

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FISCAL 1997 WORLDWIDE WHOLESALE NET SALES OF POLO RALPH LAUREN PRODUCTS(1)(2)
(IN MILLIONS)

(1) Wholesale net sales for products sold by the Company's licensing partners
have been derived from information obtained from such licensing partners.

(2) Includes transfers of products to the Company's wholly owned retail
operations at wholesale prices or, in the case of outlet stores, at cost.

Polo's business consists of four integrated operations: wholesale, Home
Collection, direct retail and licensing alliances. Wholesale operations
primarily consist of the design, sourcing, marketing and distribution of
menswear under the Polo by Ralph Lauren, Polo Sport, Polo Golf and Ralph
Lauren/Purple Label brands and of womenswear under the Ralph Lauren Collection
and Collection Classics, RALPH and Ralph Lauren Polo Sport brands. The Home
Collection division designs, markets and sells home products under the Company's
brands for its 13 home licensing partners from whom the Company receives
royalties. Polo's retail sales are generated by the Company's 28 Polo stores
(including 21 stores being acquired pursuant to the PRC Acquisition) located in
regional malls and high-street shopping areas and its 67 outlet stores located
primarily in outlet malls. See "Reorganization and Related Transactions -- PRC
Acquisition". As part of its licensing alliances, Polo conceptualizes, designs
and develops the marketing for a broad range of products under its various
brands for which the Company receives royalties from 19 product licensing

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partners and 14 international licensing partners. Details of the Company's net
revenues are shown in the table below.

FISCAL YEAR PRO FORMA
-------------------------------------- FISCAL 1997(3)
1995 1996 1997 (UNAUDITED)
-------- ---------- ---------- --------------
(IN THOUSANDS)

- ---------------

(2) Licensing revenue includes royalties received from Home Collection licensing
partners.

(3) Pro forma financial information presented above gives effect to the PRC
Acquisition as if it had occurred on March 31, 1996, the first day of fiscal
1997. Prior to the PRC Acquisition, the Company owned a 50% interest in PRC
which it accounted for using the equity method, and as such, did not
consolidate PRC's operations. Accordingly, prior to the PRC Acquisition, net
revenues did not include PRC's retail sales, while wholesale net sales
reflected the Company's sales to PRC. Simultaneous with the closing of the
Offerings, the Company will complete the PRC Acquisition. See
"Reorganization and Related Transactions -- PRC Acquisition" and "Unaudited
Pro Forma Combined Financial Information".

STRATEGY

From its inception, Polo has maintained a consistent operating strategy
which has driven growth in sales and earnings. Key elements of this core
strategy are as follows:

OFFER PREMIUM QUALITY PRODUCTS AND DISTINCTIVE DESIGNS. The Company's
products reflect a timeless and innovative American style associated with
and defined by Polo and Ralph Lauren. The Company's designers work closely
with its merchandising, sales and production teams and licensing partners
to offer premium quality product collections which incorporate Polo's
distinctive lifestyle themes. Mr. Lauren, supported by Polo's design staff
of over 180 persons, has won numerous awards for Polo's designs including,
most recently, the prestigious 1996 Menswear Designer of the Year and 1995
Womenswear Designer of the Year awards, both of which were awarded by the
CFDA. In addition, Mr. Lauren was honored with the CFDA Lifetime
Achievement Award in 1991, and is the only person to have won all three of
these awards. See "-- Design".

CONTROL AND CUSTOMIZE DISTRIBUTION. Polo's reputation for quality and
style is also reflected in the distribution of its products. The Company's
products are sold through leading upscale department and specialty stores
and Polo stores throughout the world. Polo was a pioneer in utilizing
shop-within-shop boutiques in major department stores to encourage the
effective merchandising and display of Polo Ralph Lauren products. By
presenting a broad selection of Polo products in an attractive customized
environment, the shop-within-shop boutiques heighten awareness of the
Company's brands and differentiate its offerings. The Company

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estimates that, as of March 29, 1997, more than three million square feet
of retail space worldwide (including Polo stores and approximately 1,700
department store shop-within-shop boutiques in the United States) were
exclusively dedicated to products sold under the Company's brands. See
"-- Domestic Wholesale and Home Collection Customers and Service".

BUILD STRATEGIC LICENSING ALLIANCES. Polo's licensing alliances have
been a key factor in the Company's ability to offer an extensive array of
products domestically and internationally. Through these alliances, Polo
combines its consumer insight and design, marketing, and imaging skills
with the specific product or geographic competencies of its licensing
partners to create and build new businesses. Important examples of these
alliances include those with industry leaders such as L'Oreal, S.A. in
fragrances, WestPoint Stevens, Inc. in bedding and bath products, and Seibu
Department Stores, Ltd. in connection with the offering of Polo products in
Japan. See "-- Operations -- Home Collection" and
"-- Operations -- Licensing Alliances" for a description of the Company's
material licensing alliances and the percent of revenue attributable to
each.

DEVELOP POLO RALPH LAUREN STORES. The Company enhances the sale and
merchandising of its products and builds the awareness and identity of its
brands through its Polo stores and outlet stores. The Company's two
flagship stores, located on Madison Avenue in New York City, offer unique
shopping environments which communicate the complete Polo lifestyle. Over
100 Polo stores are operated by the Company and its licensing partners and
joint ventures in over 25 countries worldwide. The Company currently also
operates 67 outlet stores which broaden its customer base and contribute to
profitability while maintaining the integrity of its primary distribution
channels. See "-- Operations -- Direct Retailing".

EXPAND THE FAMILY OF POLO BRANDS. The Company continually creates new
brands based upon the original Polo and Ralph Lauren concepts to address
new markets and consumer groups and maintain Polo's premium image. For
example, in fiscal 1994, the Polo Sport label was created to introduce a
new line of fitness apparel targeted at the growing market for functional,
performance-oriented sport and outdoor wear. In Fall 1995, Polo launched
its exclusive, limited distribution Purple Label brand of men's tailored
clothing. Representing the Company's most refined apparel perspective,
Purple Label reinforces Polo's reputation for quality, innovation and
style. In Fall 1996, Polo introduced a denim-based line of sportswear for
men, women and children under the Polo Jeans Co. brand. With price points
below those of Polo's core apparel lines and a more casual contemporary
styling, Polo Jeans Co. is designed to appeal to younger consumers. See
"-- Operations -- Wholesale -- Polo Ralph Lauren Menswear" and
"-- Operations -- Licensing Alliances -- Product Licensing Alliances".

DEVELOP NEW PRODUCT CATEGORIES AND BUSINESSES WITHIN EXISTING
BRANDS. Polo builds sales within its existing brands by devoting resources
to less developed product areas and adding new product categories. For
example, in Spring 1994, the Company added skin care products to its Polo
Sport fragrance line and in fiscal 1996, introduced a line of paints and
wall finishes as part of Home Collection. Similarly, while Polo has offered
footwear since 1972, the Company plans to launch a full range of athletic
footwear in 1998. See "-- Operations -- Licensing Alliances -- Product
Licensing Alliances".

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and the addition of Polo stores in these markets. For example, following
the successful launch of Polo Jeans Co. in the United States in Fall 1996,
the Company formalized its plans to introduce the line in Canada, Europe
and Asia in Fall 1997. See "-- Operations -- Licensing
Alliances -- International Licensing Alliances".

CAPITALIZE ON WOMENSWEAR OPPORTUNITY. The Company believes the
womenswear market offers a significant opportunity for it to further
capitalize on its position both domestically and internationally as a
leading designer of womenswear. The Company acquired its womenswear
business from a former licensing partner in October 1995. In addition to
allowing the Company to improve the operations of its existing womenswear
designer and bridge lines, the acquisition has enabled Polo to take
important growth initiatives in additional segments of the womenswear
market. In Fall 1996, for example, the Company and a new licensing partner
launched the Lauren line of women's better sportswear and career apparel.
See "-- Operations -- Wholesale -- Ralph Lauren Womenswear".

CONTINUE RETAIL EXPANSION. The Company plans to expand its retail
presence by adding five or more Polo stores, including Polo Stores in Palm
Beach and Las Vegas and flagship stores in London and Chicago, over the
next two years. The Company also plans to add ten to 20 new outlet stores
over the next three years. In addition, in fiscal 1998, the Company plans
to test market a Polo Jeans Co. store. See "-- Operations -- Direct
Retailing".

OPERATIONS

Polo's business consists of four integrated operations: wholesale, Home
Collection, direct retail and licensing alliances. Each is driven by the
Company's guiding philosophy of style, innovation and quality.

WHOLESALE

Polo's wholesale business is subdivided into two divisions: Polo Ralph
Lauren Menswear and Ralph Lauren Womenswear. In both of its wholesale divisions,
the Company offers discrete brand offerings to compete at various price levels.
See "-- Domestic Wholesale and Home Collection Customers and Services". The
Company's total wholesale net sales for fiscal 1997 were $663.4 million.

POLO RALPH LAUREN MENSWEAR

The Menswear division designs, sources, markets and distributes menswear
under its Polo by Ralph Lauren, Polo Sport, Ralph Lauren/Purple Label Collection
and Polo Golf brands. Each line is directed by a team consisting of design,
merchandising, sales and production staff who work together to conceive, develop
and merchandise product groupings organized to convey a variety of design
concepts. Generally, there are four annual seasonal presentations for each line:
Fall, Cruise/Holiday, Spring and Summer. Within each line, the Company offers
core and recurring styles complemented by fashion forward items reflecting
contemporary trends. Polo is recognized worldwide as one of the premier men's
designer collections, and Mr. Lauren was named 1996 Menswear Designer of the
Year by the CFDA. The wholesale net sales of menswear products increased from
$433.0 million in fiscal 1993 to $564.6 million in fiscal 1997.

POLO BY RALPH LAUREN. The Polo by Ralph Lauren menswear collection is a
complete men's wardrobe consisting of products related by theme, style, color
and fabric. Products include pants, dress and casual shirts, the famous knit
shirts with the polo player logo, ties, outerwear and sweaters, as well as
tailored suits, sport coats, top coats, tailored trousers and formal wear, which
are produced by licensing partners. The line is characterized by traditional and
classic elements reflecting the distinctive American style of Polo Ralph Lauren.
Polo by Ralph Lauren menswear is generally priced at a range of price points
within the men's premium ready-to-wear apparel market. For example, suggested
retail prices typically range from $49.50 to $59.50 for a basic knit shirt,

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$59.50 to $89.50 for a dress shirt and $58.50 for chino pants. This line is
currently sold through approximately 1,600 department store, specialty store and
Polo store doors in the United States, including approximately 1,050 department
store shop-within-shop boutiques.

POLO SPORT. The Polo Sport line of activewear and sportswear is designed to
meet the growing consumer demand for functional sport and outdoor apparel. Polo
Sport products include apparel and accessories for skiing, golfing, running,
tennis, cycling, rock-climbing, cross-training, snowboarding and nautical
sports, and often feature highperformance fabrics and construction. While the
line is designed to meet the performance requirements of these activities, Polo
Sport products also appeal to consumers who seek designer styling combined with
technical authenticity in sportswear. Polo Sport is offered at a range of price
points generally consistent with prices for the Polo by Ralph Lauren line, and
is distributed through approximately 1,300 department store, specialty store,
Polo Sport store and Polo store doors in the United States, including
approximately 145 department store shop-within-shop boutiques.

RALPH LAUREN/PURPLE LABEL COLLECTION. In Fall 1995, the Company introduced
its Purple Label Collection of men's tailored clothing. Made from luxurious
fabrics, Purple Label presents the Company's most refined perspective on men's
clothing. Prominently featured in the Company's advertising, Purple Label
reinforces the exclusive image of the Company's brands and communicates central
themes of quality, innovation and style. The Company believes its exclusively
distributed brands, including Purple Label Collection, not only build the
Company's image, but also enhance sales of its other products. To complement the
tailored clothing line, the Company recently launched and will distribute its
Purple Label sportswear line for retail sale in Fall 1997. Purple Label
Collection tailored clothing is manufactured and distributed by a licensee, and
dress shirts and ties are sourced and distributed by the Company. Suggested
retail prices typically range from $1,600 to $3,000 for a suit, $165 to $225 for
a dress shirt, and $95 to $125 for a tie. The Purple Label lines are sold
through a limited number of premier fashion retailers, currently numbering
approximately 30 doors in the United States.

POLO GOLF. The Polo Golf line is targeted at the golf and resort markets.
The line includes products similar to those in the Polo by Ralph Lauren line
with features tailored to the needs of the golf and resort consumer. For
example, club logos or names can be embroidered on certain Polo Golf apparel
products. Price points are similar to those charged for products in the Polo
Sport line. The Polo Golf line is presently sold in the United States through
approximately 1,500 leading golf clubs, pro shops and resorts, in addition to
department, specialty and Polo stores.

RALPH LAUREN WOMENSWEAR

The Womenswear division designs, sources, markets and distributes
womenswear under its Ralph Lauren Collection and Collection Classics,
RALPH/Ralph Lauren, Ralph (Polo Player Design) Lauren and Ralph Lauren Polo
Sport brands. Representatives from each of the design, merchandising, sales and
production staffs work together to conceive, develop and sell product groupings
organized to convey a variety of design concepts. Each of the women's apparel
lines (except Ralph Lauren Collection) consists of core, recurring styles,
complemented by more fashion-oriented items which reflect contemporary trends.
Mr. Lauren introduced his first womenswear products in 1971 and subsequently
licensed the line in 1973.

In October 1995, to capitalize further on its position, both domestically
and internationally, as a leading designer of womenswear, Polo acquired the
business of its former licensing partner and commenced its own womenswear
wholesale operations. Since acquiring control of these operations, the Company
has centralized control of its womenswear design, merchandising and sales
activities and focused its efforts on improving the quality, production and
delivery of its products. In addition, the Company has sought to build its
womenswear business by capitalizing on the relationships developed with its
menswear customers and by devoting resources to creating and renovating
shop-within-shop boutiques and other exclusively fixtured areas within
department

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stores. In fiscal 1997, the Company's wholesale net sales of womenswear products
were $98.8 million.

The womenswear industry's four basic selling seasons are Fall,
Cruise/Holiday, Spring and Summer. The women's ready-to-wear apparel market in
the United States is divided into five segments defined by price levels, ranging
from lowest to highest, as follows: budget, moderate, better, bridge, and
designer. The Company competes directly in the bridge and designer segments of
the womenswear industry, and competes through its licensing partner for the
Lauren line in the better segment.

RALPH LAUREN COLLECTION AND COLLECTION CLASSICS. The Ralph Lauren
Collection, sold under the Purple Label and the Custom Collection Label (the
"Collection"), expresses the Company's up-to-the-moment fashion vision for
women. Made with luxury fabrics and high quality construction and detailing, the
Collection plays an important strategic role for the Company by reinforcing the
Polo Ralph Lauren image of style and high fashion. Each of the Spring and Fall
collections is introduced at major fashion shows which generate extensive
international media coverage. The Collection is recognized as one of the premier
women's designer collections, and Mr. Lauren was named 1995 Womenswear Designer
of the Year by the CFDA.

Collection Classics include timeless versions of the Company's most
successful Collection styles, as well as newly-designed classic signature styles
which tend to remain in a women's wardrobe for several seasons. The Collection
Classics line uses similar quality fabrics and construction to those used to
produce the Collection line. Beginning in Spring 1997, the Collection Classics
line will be sold under Ralph Lauren's Black Label.

Collection and Collection Classics are offered for limited distribution to
premier fashion retailers and through Polo stores. Price points are at the upper
end or luxury ranges. The suggested retail prices for a Collection jacket and
pant typically range from $995 to $2,500, and from $450 to $1,395, respectively.
The suggested retail prices for a Collection Classics jacket and pant typically
range from $695 to $1,495 and from $395 to $650, respectively. The lines are
currently sold through over 110 doors in the United States and 20 international
doors.

RALPH/RALPH LAUREN. The RALPH/Ralph Lauren brand was established in 1994
and presents a distinct and more casual fashion identity for the bridge market,
while retaining a strong association with the Ralph Lauren Collection designer
image. Younger in attitude and lower in price than the Collection, the RALPH
line consists of a mix of classic and fashion items ranging from career wear to
casual weekend apparel. The line is sold through approximately 140 doors in the
United States and Canada. The suggested retail prices for a RALPH/Ralph Lauren
jacket and pant typically range from $350 to $595, and from $125 to $325,
respectively.

RALPH LAUREN POLO SPORT. Similar to its men's counterpart, the Ralph Lauren
Polo Sport line for women includes activewear for a variety of sports, as well
as fashion athletic and sportswear basics. Introduced in Spring 1997, the Polo
Sport line for women broadens the Company's potential customer base. Certain
core sportswear items continue to be sold under the Ralph (Polo Player Design)
Lauren label which until recent years was the label under which most Ralph
Lauren women's sportswear was sold. The Ralph Lauren Polo Sport line is
currently carried by approximately 400 doors in the United States, including
approximately 130 shop-within-shop boutiques, and sells at a wide range of
bridge prices. For example, the suggested retail price for a t-shirt is $28,
while the suggested retail price for outerwear ranges from $115 to $425.

HOME COLLECTION

With the introduction of the Ralph Lauren Home Collection in 1983, Polo
became one of the first major apparel designers to extend its design principles
and brands to a complete line of home furnishings. Today, in conjunction with
its licensing partners, Polo offers an extensive collection of home products
which both draw upon, and add to, the design themes of the Company's other

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product lines, contributing to Polo's complete lifestyle concept. New seasonal
lines are presented for the Fall and Spring selling seasons while classic items
remain a continuing part of the Home Collection. Products are sold under the
Ralph Lauren Home Collection brands in three primary categories: bedding and
bath, interior decor, and tabletop and gift.

The table below details wholesale net sales of Home Collection products
worldwide by the Company's licensing partners, for which the Company receives
licensing revenue, for the stated fiscal years.

FISCAL YEAR
--------------------------------------------------
1993 1994 1995 1996 1997
------ ------ ------ ------ ------
(IN MILLIONS)

Home Collection wholesale net sales........ $109.3 $144.7 $206.9 $265.9 $325.5

In addition to developing the Home Collection, Polo acts as sales and
marketing agent for its domestic Home Collection licensing partners. Together
with its nine domestic home product licensing partners, representatives of the
Company's design, merchandising, production and sales staffs collaborate to
conceive, develop and merchandise the various products as a complete home
furnishing collection. Polo's personnel market and sell the products to domestic
customers and certain international accounts. Polo's licensing partners, many of
which are leaders in their particular product category, manufacture, own the
inventory and ship the products. As compared to its other licensing alliances,
Polo performs a broader range of services for its Home Collection licensing
partners, which, in addition to sales and marketing, include operating showrooms
and incurring advertising expenses, and, consequently, generally receives a
higher royalty rate from its Home Collection licensing partners, which rates
generally range from 15% to 25%. Home Collection licensing alliances generally
have three to five-year terms and often grant the licensee conditional renewal
options.

Home Collection products are positioned at the upper tiers of their
respective markets and are offered at a range of price levels. Consistent with
its strategy of developing its brands and products in tiered price categories,
in Fall 1996 the Company introduced its luxurious White Label Collection of high
thread-count bed and bath products offered through approximately 40 doors.

The Company's home furnishings products generally are distributed through
department stores, specialty furniture stores, interior design showrooms,
customer catalogs and home centers. As with its other products, the use of
shop-within-shop boutiques is central to the Company's distribution strategy.
Certain licensing partners, including those selling furniture, wall coverings,
blankets, bed pillows, tabletop, flatware, home fragrance and paint, also sell
their products directly through their own staffs to reach additional customer
markets.

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The home furnishings products offered by the Company and its domestic
licensing partners are listed below.

CATEGORY PRODUCT LICENSING PARTNER
- ------------------- ---------------------------------------- --------------------------

Bedding and Bath Towels, sheets, pillowcases and matching WestPoint Stevens, Inc.
bedding accessories
Blankets, bed pillows, comforters and Pillowtex Corporation
other decorative bedding accessories,
excluding those matched to sheets

Bath rugs Newmark & James

Interior Decor Upholstered furniture and case goods Henredon Furniture
Industries, Inc.

Interior and exterior paints, stains and The Sherwin-Williams
special finishes Company

Fabric and wallpaper P. Kaufmann, Inc.
Table and Giftware Sterling, silverplate and stainless Reed and Barton
steel flatware and picture frames Corporation

Crystal and glass tableware and RJS Scientific, Inc.
giftware, ceramic dinnerware and
giftware, home fragrances (potpourri,
scented candles, etc.) and Polo bears

Placemats, tablecloths, napkins Designers Collection, Inc.

The Company's three most significant Home Collection licensing partners
based on aggregate licensing revenue paid to the Company are WestPoint Stevens,
Inc., Pillowtex Corporation and Henredon Furniture Industries, Inc. WestPoint
Stevens, Inc. accounted for approximately 52% of Home Collection licensing
revenue in fiscal 1997. See "Risk Factors -- Dependence on Licensing Partners
for a Substantial Portion of Net Income; Risks Associated with a Lack of
Operational and Financial Control Over Licensed Businesses".

DOMESTIC WHOLESALE AND HOME COLLECTION CUSTOMERS AND SERVICE

GENERAL. Consistent with the appeal and distinctive image of its products
and brands, the Company sells its menswear, womenswear and Home Collection
products primarily to leading upscale department stores, specialty stores, golf
and pro shops and Polo stores located throughout the United States which have
the reputation and merchandising expertise required for the effective
presentation of Polo products. The Company believes that Polo is a core resource
for its major accounts, often being one of their largest-selling brands. As
such, Polo generally receives priority in location, display and management
attention.

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The Company's wholesale and home furnishings products are distributed
through the primary distribution channels listed in the table below. In
addition, the Company also sells excess and out-of-season products through
secondary distribution channels.

APPROXIMATE NUMBER OF
DOORS AS OF MARCH 29, 1997
---------------------------------------
MENSWEAR WOMENSWEAR HOME COLLECTION
-------- ---------- ---------------

Department Stores.................................. 1,300 310 1,300
Specialty Stores................................... 340 105 50
Polo Stores........................................ 40 40 35
Golf & Pro Shops................................... 1,520 350 --

Department stores represent the largest customer group of each wholesale
division and of the Home Collection. Major department store customers include
Federated Department Stores, Inc., Dillard Department Stores, Inc., The May
Department Stores Company and Dayton Hudson Corporation. During fiscal 1997,
Federated Department Stores, The May Department Store Company and Dillard
Department Stores accounted for 17.2%, 14.2% and 13.8%, respectively, of the
Company's wholesale net sales. See "Risk Factors--Dependence on Sales to a
Limited Number of Large Department Store Customers; Risks Related to Extending
Credit to Customers".

The Company seeks to assist its retail customers in achieving a high
sell-through of Polo products at full price. Polo supports these retail
customers with account executives, sales coordinators and retail analysts who
work closely with stores to assist in purchasing, merchandising, stocking and
advertising. In addition, the Company employs approximately 80 merchandising
coordinators devoted to menswear, womenswear and Home Collection to conduct
training of customers' sales staffs, enforce the Company's merchandising and
design standards, and monitor product stock flow. Instore seminars, trunk and
fashion shows and other training events are also conducted by the Company's
staff to further educate retail customers' sales staffs, develop customer
loyalty and strengthen sales.

Menswear, womenswear and Home Collection wholesale products are primarily
sold through their respective sales forces aggregating approximately 140
salespersons employed by Polo. The menswear division maintains its primary
showroom at Polo's New York City executive headquarters. Regional showrooms for
menswear are located in Atlanta, Chicago, Dallas and Los Angeles. An independent
sales representative promotes sales to U.S. military exchanges. The womenswear
and Home Collection divisions maintain their primary showrooms in New York City.
Regional sales representatives for the Home Collection are located in the
Company's showrooms in Atlanta, Chicago, Dallas and Los Angeles and in London.
The Company also operates a separate tabletop showroom in New York City.

SHOP-WITHIN-SHOP BOUTIQUES. The Company constantly seeks to ensure that its
products are offered to the consumer in a visually attractive setting that is
consistent with Polo's marketing philosophy and image. As a critical element of
its distribution to department stores, the Company and its licensing partners
utilize shop-within-shop boutiques to enhance brand recognition, permit more
complete merchandising of the Company's lines and differentiate the presentation
of products. In these shops, a broad assortment of Polo products is presented in
a combination of wallcase and free-standing fixtures, as well as "concept"
tables, in order to create both powerful visual presentations and, by grouping
similar patterns and models together, an efficient shopping environment. The
boutiques include seasonal visual guides, such as props, display photos, niche
liners and counter cards, which enhance the image and identity of particular
themes. Polo was a pioneer in the establishment of these boutiques. The Company
believes shop-within-shop boutiques stimulate longer term commitment by the
retailer to the Company's products and encourage each store to carry a
representative cross-section of the product line for each season. The Company
believes that the Company's shop-within-shop boutiques significantly improve
sales productivity and has focused its efforts on increasing the number and size
of shop-within-shop boutiques where appropriate. The

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Company intends to add approximately 210 shop-within-shop boutiques and
refurbish approximately 195 shop-within-shop boutiques in fiscal 1998. At March
29, 1997, department store customers in the United States had installed over
1,700 shop-within-shop boutiques dedicated to Polo products. The size of Polo
shop-within-shop boutiques (excluding significantly larger shop-within-shop
boutiques in key department store locations) typically ranges from approximately
2,000 to 3,000 square feet for menswear, from approximately 800 to 1,000 square
feet for womenswear, and from approximately 800 to 1,200 square feet for home
furnishings. The Company estimates that, in total, approximately 1.6 million
square feet of department store space in the United States is dedicated to Polo
shop-within-shop boutiques. In addition to shop-within-shop boutiques, the
Company utilizes exclusively fixtured areas in department stores.

BASIC STOCK REPLENISHMENT PROGRAM. The menswear and womenswear programs
allow products such as knit shirts, chino pants, oxford cloth shirts and navy
blazers to be ordered at any time through basic stock replenishment programs.
For customers who reorder basic products, Polo generally ships these products
within one to five days of order receipt. These products accounted for
approximately 17% of menswear wholesale sales and approximately 7% of womenswear
wholesale sales in fiscal 1997. The Company has also implemented a seasonal
quick response program to allow replenishment of products such as lambswool
sweaters, corduroy trousers and down jackets which can be ordered for only a
portion of each year. Certain Home Collection licensing partners also offer a
basic stock replenishment program which includes towels, bedding and tabletop
products. Basic stock products accounted for approximately 73% of net sales of
Home Collection licensing partners in fiscal 1997.

DIRECT RETAILING

The Company operates two types of retail stores dedicated to the sale of
Polo products. Located in prime retail areas, the Company's 28 Polo stores
(which include the 21 stores being acquired by the Company in the PRC
Acquisition) operate under the Polo Ralph Lauren and Polo Sport names. The
Company's 67 outlet stores are generally located in outlet malls and operate
under the Polo Ralph Lauren Factory Store name. The Company's retail sales for
fiscal 1997, exclusive of PRC sales, were $380.0 million.

In addition to its own retail operations, the Company has granted licenses
to independent parties to operate 14 stores in the United States and more than
65 stores internationally. The Company receives the proceeds from the sale of
its menswear and womenswear products, which are included in wholesale net sales,
to these stores and also receives royalties, which are included in licensing
income, from its licensing partners who sell to these stores. The Company
generally does not receive any other compensation from these licensed store
operators. See "--Licensing Alliances".

POLO STORES

In addition to generating sales of Polo Ralph Lauren products, Polo stores
set, reinforce and capitalize on the image of Polo's brands. Depending on their
size and location, the stores present lifestyle collections of Polo Ralph Lauren
apparel, accessories, home and fragrance products. The stores are designed and
fixtured to create a distinctive Polo environment and store associates are
trained to maintain high standards of visual presentation, merchandising and
customer service. The result is a complete statement at retail of Polo's central
themes of quality, style and innovation.

The Company's two flagship stores located on Madison Avenue in New York
City showcase Polo products and demonstrate Polo's most refined merchandising
techniques. Opened in 1986, the Company's Polo Ralph Lauren Store in the
five-story Rhinelander Mansion embodies the Polo lifestyle in over 20,000 square
feet. The store has been critically acclaimed for the quality of its design and
presentation and the Company received the 1986 Retailer of the Year award from
the CFDA in connection with its opening. Opened in 1993 in conjunction with
development of the Polo

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Sport brand, the 10,000 square foot flagship Polo Sport store is designed to
convey the active spirit and complete product line of this brand.

In 1993, Polo combined the operations of a majority of its then owned
stores with those of an experienced licensing partner to form a joint venture,
PRC, in order to improve the stores' performance. In addition to operating the
stores, PRC has acquired and opened additional stores while closing unproductive
stores. Simultaneously with the closing of the Offerings, Polo will complete the
acquisition of the interest of its joint venture partner in PRC. See
"Reorganization and Related Transactions -- PRC Acquisition".

Following the PRC Acquisition, in addition to its New York flagship stores,
Polo will operate 26 other Polo stores. Ranging in size from approximately 2,000
to over 14,000 square feet, the non-flagship stores are situated in upscale
regional malls and major high street locations generally in the largest urban
markets in the United States. Polo has also operated a Polo store on New Bond
Street in London since 1983. In aggregate, the Company will operate 24 Polo
Ralph Lauren stores, two Polo Sport stores and two Polo Country stores (offering
primarily leisure and weekend apparel). Stores are generally leased for initial
periods of ten years with renewal options.

The Company plans to continue to invest in Polo stores. In fiscal 1997, new
Polo stores were opened in Waikiki, Hawaii, Troy, Michigan and Roosevelt Field
Mall in Garden City, New York, and in fiscal 1998 a new Polo store was opened in
Oakbrook, Illinois. Among other locations, new stores are planned for Palm
Beach, Florida and Las Vegas, Nevada, and new flagship stores are planned for
Chicago and London. Following successful major renovations and expansions of its
San Francisco and Atlanta stores in fiscal 1997, Polo plans to renovate or
relocate its stores in Houston, Texas, Phoenix, Arizona, Manhasset, New York and
Short Hills, New Jersey, in fiscal 1998. Also in fiscal 1998, the Company plans
to test market a Polo Jeans Co. store as part of the development of its Polo
Jeans Co. brand.

Effective March 31, 1997, the Company entered into a joint venture
agreement with a nonaffiliated partner to acquire real property in New York
City. The Company and its partner expect to own and operate a concept store in
New York City and are discussing a restaurant and other possible concepts for
such location. Concurrent with the signing of the agreement, the Company made an
initial contribution for its 50% interest in the joint venture in the amount of
$5.0 million.

OUTLET STORES

Polo extends its reach to additional consumer groups through its 67 Polo
Ralph Lauren Factory Stores. Offering Polo products at 15% to 50% below
suggested retail prices in an outlet mall environment, the outlet stores target
consumers who favor value-oriented retailers. Geographically positioned to
minimize potential overlap with the Company's primary customers, the outlet
stores add sales in regions where Polo products are not readily available. The
outlet stores also serve to liquidate excess, irregular and out-of-season Polo
Ralph Lauren products outside of the Company's primary distribution channels.

Outlet stores offer selections of the Company's menswear, womenswear,
children's apparel, accessories, home furnishings and fragrances. Ranging in
size from 5,000 to 13,000 square feet, with an average of over 7,900 square
feet, the stores are generally located in major outlet centers in 31 states and
Puerto Rico. The Company believes that the outlet stores maintain fixturing,
visual presentation and service standards superior to those typically associated
with outlet stores.

Outlet stores purchase products from Polo, its licensing partners and its
suppliers and from Polo stores in the United States. Outlet stores purchase
products from Polo generally at cost and from Polo's domestic product licensing
partners and Polo stores at negotiated prices. Outlet stores also source basic
products and styles directly from the Company's suppliers often utilizing Polo's
excess fabric. In fiscal 1997, the outlet stores purchased approximately 35%,
30% and 35% of products from the Company, licensing partners and other
suppliers, respectively.

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Given the broad appeal of Polo's brands and the relatively high sales
productivity of these stores, the Company believes it is a desired tenant among
outlet store developers and, as such, Polo has received significant landlord
concessions which have minimized its initial investment and provided other
favorable lease terms. The stores are generally leased for an initial period of
five or more years with subsequent renewal options. The Company plans to add ten
to 20 new outlet stores (net of anticipated store closings) over the next three
years. In addition, in fiscal 1998 the Company plans to test three or more
factory outlet concept stores which will carry only certain Polo brands and
products and will be smaller than typical outlet stores. There can be no
assurance that the Company will continue to receive landlord concessions or
other favorable lease terms.

LICENSING ALLIANCES

Through licensing alliances, Polo combines its consumer insight and design,
marketing and imaging skills with the specific product or geographic
competencies of its licensing partners to create and build new businesses. The
Company's licensing partners, who are often leaders in their respective markets,
generally contribute the majority of product development costs, provide the
operational infrastructure required to support the business and own the
inventory. Since the Company is, in most cases, paid a royalty based upon
wholesale sales by its licensing partners, Polo is less exposed to certain
operating risks influencing profitability than if it owned and operated the
business directly. Further, extension of the Company's brands into new product
categories and regions, coupled with associated marketing campaigns,
incrementally enhance and build awareness of the Company's brands generally.

Product and international licensing partners are granted the right to
manufacture and sell at wholesale specified products under one or more of Polo's
trademarks. Generally, product licenses encompass the production and sale of a
complete product line for sale in the United States and may also include
provisions for international sales, either directly or through the Company's
international licensing partners. International licenses typically grant the
licensing partner the right to distribute a broad range of Polo Ralph Lauren
products within a defined international market. International licensing partners
produce and source products independently and in conjunction with the Company
and its product licensing partners. As compensation for the Company's
contributions under these agreements, each licensing partner pays royalties to
the Company based upon its sales of Polo Ralph Lauren products, subject
generally, to payment of a minimum royalty. With the exception of Home
Collection licenses, these payments generally range from five to eight percent
of the licensing partner's sales of the licensed products. See "-- Home
Collection" for a description of royalty arrangements for Home Collection
products. In addition, licensing partners are required to allocate between two
and four percent of their sales to advertise Polo products. Larger allocations
are required in connection with launches of new products or in new territories.
Licensing alliance agreements generally have three- to five-year terms and often
grant the licensee renewal options if specified sales thresholds are met. In
those few instances where the Company has granted long term licenses, the
Company has generally obtained the right to buy the licensed business from its
licensing partner under certain circumstances.

Polo works in close collaboration with its licensing partners to ensure
that products are developed, marketed and distributed to address the intended
market opportunity and present consistently to consumers worldwide the
distinctive perspective and lifestyle associated with the Company's brands.
While product licensing partners may employ their own designers, the Company
oversees the design of all its products. Polo works closely with licensing
partners to coordinate marketing and distribution strategies and the design and
construction of shop-within-shop boutiques, and participates in the long-range
planning and development of its licensing partners' Polo businesses. Virtually
all aspects of the design, production quality, packaging, merchandising,
distribution, advertising and promotion of Polo products are subject to the
Company's prior approval and ongoing oversight. The result is a consistent
identity for Polo products across product categories and international markets.

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Polo has 19 product and 14 international licensing partners. A substantial
portion of the Company's net income is derived from licensing revenue received
from its licensing partners. The Company's three largest licensing partners by
licensing revenue, Seibu Department Stores, Ltd., WestPoint Stevens, Inc. and
L'Oreal S.A./Cosmair, Inc. accounted for 13.8%, 17.3 and 8.4%, respectively, of
licensing revenues in fiscal 1997. See "Risk Factors -- Dependence on Licensing
Partners for a Substantial Portion of Net Income; Risks Associated with a Lack
of Operational and Financial Control over Licensed Businesses". Details of
wholesale net sales of the Company's licensing partners (excluding sales of Home
Collection products) are presented below.

FISCAL YEAR
------------------------------------------------------------
1993 1994 1995 1996 1997
-------- -------- -------- -------- --------
(IN MILLIONS)

Product......................... $ 570.8 $ 582.2 $ 640.8 $ 648.2 $ 929.9
International................... 685.7 667.0 796.2 867.4 870.8
-------- -------- -------- -------- --------
Total................. $1,256.5 $1,249.2 $1,437.0 $1,515.6 $1,800.7
======== ======== ======== ======== ========

PRODUCT LICENSING ALLIANCES

Polo has agreements with 19 product licensing partners relating to men's
and women's sportswear, men's tailored clothing, children's apparel,
personalwear, accessories and fragrances.

CASUAL APPAREL AND SPORTSWEAR

CHAPS BY RALPH LAUREN. Through a licensing partner, Polo offers a line of
moderately priced men's sportswear under the Chaps by Ralph Lauren brand
("Chaps"). Originally introduced in 1974, Chaps has become a broad casual
sportswear line featuring knit and woven shirts, sweaters, casual pants and
outerwear. Chaps addresses a younger and more price-conscious fashion consumer
than does the Polo by Ralph Lauren brand. Chaps is distributed primarily through
a broad base of better department stores where the line is often sold through
areas outfitted with customized Chaps fixturing. As Chaps has expanded its
product line and distribution, U.S. wholesale net sales by Polo's licensing
partner have grown from approximately $70 million in fiscal 1993 to over $180
million in fiscal 1997. Warnaco, Inc. has been the Company's Chaps licensing
partner since 1976.

POLO JEANS CO. Recognizing an opportunity in the younger contemporary
sportswear market, the Company created the Polo Jeans Co. brand. Targeted at 16-
to 28-year old men and women, the denim-based line is founded upon a more casual
and contemporary design perspective than the Company's core menswear and
womenswear brands. The Polo Jeans Co. collection features a large selection of
both basic and fashion jeans with a broad complement of casual sportswear,
including chambray shirts, t-shirts, sweatshirts, chino pants and outerwear.
Suggested retail prices include $48 for basic jeans, $50 for a chambray shirt
and $60 for a sweatshirt. The Polo Jeans Co. brand is intended to become a core
offering for department stores' younger, more fashion-forward customers. Polo
Jeans Co. products are also sold through retailers catering to the young men's
and women's markets. Launched in the United States in Fall 1996, Polo Jeans Co.
products are currently offered through over 2,000 men's and women's doors. The
Company expects to test market a Polo Jeans Co. store in fiscal 1998. The
Company's licensing partner for Polo Jeans Co. in the United States is Sun
Apparel, Inc.

LAUREN BY RALPH LAUREN. Introduced in Fall 1996, the Lauren by Ralph Lauren
brand ("Lauren") marked Polo's entry into the women's better sportswear market,
a market significantly larger than that addressed by the Company's designer and
bridge collections. Embodying the traditional classic styling associated with
the Ralph Lauren brands, Lauren offers an extensive collection of women's better
apparel suitable for both career and social environments. Representative items
and suggested retail price points include tailored jackets at $250, career
skirts at $120, cotton shirts at $55 and chino pants at $55. Launched in
approximately 250 department store doors,

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Lauren is expected to be sold through approximately 650 doors by the Fall 1997
season. Lauren is currently offered exclusively in better department stores
where it is merchandised through shop-within-shop boutiques. Lauren will add
petite sizes, suits and a broadened assortment of coats for Fall 1997. The
Company's licensing partner for Lauren is Jones Apparel Group, Inc.

MEN'S TAILORED CLOTHING

Consistent with its strategy of segmenting its menswear business by style
and price point, the Company offers men's tailored clothing under its Purple
Label, Polo by Ralph Lauren and Chaps brands. The product offering consists of
suits, sport coats, tailored trousers and top coats. In fiscal 1997, total U.S.
wholesale net sales of men's tailored clothing by the Company's licensing
partners exceeded $70 million.

Representative suggested retail prices for Polo's licensed men's tailored
clothing brands and the licensing partners of such brands are listed below.

SUGGESTED RETAIL
PRICES FOR A
BRAND LICENSING PARTNER SUIT
------------------------ ------------------------ ----------------

Purple Label Chester Barrie, Ltd. $1,600 to $3,000
Polo by Ralph Lauren Pietrafesa & Co. $600 to $1,200
Chaps Peerless Inc. $300 to $500

CHILDREN'S APPAREL

In the children's apparel market, Polo offers products for boys, infants
and toddlers, and girls. Polo's children's apparel lines are sold through better
department stores, Polo stores and other specialty stores, often through
shop-within-shop boutiques. The Company's licensing partners had U.S. wholesale
net sales of children's apparel in fiscal 1997 of over $85 million.

POLO FOR BOYS. Introduced in 1978, the Polo for Boys product line consists
of premium quality casual apparel, outerwear, tailored clothing and furnishings
for boys in sizes 4 through 20. Products are offered under the Polo by Ralph
Lauren and Polo Sport brands and include children-sized versions of core
menswear styles and incorporate their distinctive design themes and features.
Polo for Boys is licensed to Oxford Industries, Inc.

RALPH LAUREN INFANTS AND TODDLERS AND GIRLS. Introduced in 1995, the Ralph
Lauren Infants and Toddlers collection brings Polo's signature style and
products to boys and girls in sizes layette to 4T. Products are offered under
the Ralph Lauren, Polo Sport and Polo Jeans Co. brands and are generally
consistent in terms of style and quality with the Polo for Boys collection. The
infants and toddlers collection is licensed to S. Schwab Company, Inc. with whom
Polo plans to introduce a new line of apparel for girls in sizes 4 to 6X in
Spring 1998.

PERSONALWEAR

In order to capitalize fully on its opportunity in the large personalwear
market, Polo recently restructured its licensing arrangements. In 1988, Polo
entered into its first licensing alliance in the men's underwear category which
resulted in a limited line of men's underwear under the Ralph Lauren brand.
Recognizing the potential to extend its brands into additional personalwear
categories, in 1996 Polo entered into a new licensing arrangement with Sara Lee
Corporation. As a result, Polo, in collaboration with Sara Lee Corporation, has
developed extensive personalwear lines for both men and women. Scheduled for
retail sale in Fall 1997, the men's personalwear line includes underwear,
loungewear, sleepwear and robes offered under the Purple Label, Polo by Ralph
Lauren and Polo Sport brands. Also expected to debut in Fall 1997, the women's
personalwear line includes underwear, foundations, loungewear, sleepwear and
robes under the Company's Collection, Ralph Lauren and Polo Sport brands.

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ACCESSORIES -- FOOTWEAR AND OTHERS

Through its licensing partners, Polo offers a wide range of accessories
designed to complement its men's and women's apparel lines, further enhance the
distinctive images of its brands and build its business. In aggregate, U.S.
wholesale net sales of accessories offered under the Company's brands exceeded
$200 million in fiscal 1997.

DRESS AND CASUAL FOOTWEAR. In order to capitalize more fully on its
opportunity in the footwear market, Polo restructured its licensing arrangements
in 1996 for dress and casual footwear. In 1972, Polo introduced its first
footwear products. The Ralph Lauren Footwear line currently consists of a broad
collection of premium quality dress and casual shoes for men and women offered
under the Company's brands. Recognizing the potential to expand this business,
in 1996 Polo entered into a licensing agreement with Reebok International Ltd.'s
subsidiary, The Rockport Company, Inc. ("Reebok/Rockport") upon Rockport's
acquisition of control of the operations of Polo's then existing footwear
licensing partner. Under their licensing alliance, Polo, in combination with the
substantial expertise and other resources of Reebok/Rockport, is working to
develop further its dress and casual shoe business and expects to expand the
assortment in terms of style and price point and enhance in-store merchandising
and presentation.

PERFORMANCE ATHLETIC FOOTWEAR. As part of its licensing agreement with
Reebok/Rockport, in 1998, Polo will enter the athletic footwear market. Polo
plans to offer an extensive collection of performance-oriented cross-training,
running, tennis, cycling, hiking, boating and golf shoes for men and women under
the Polo Sport brand.

OTHER ACCESSORIES. Additional accessories offered by the Company and its
licensing partners under Polo's brands are listed below.

ACCESSORY CATEGORY LICENSING PARTNER
- ---------------------------------------- ---------------------

Handbags and luggage Wathne, Inc.

Eyewear Safilo USA, Inc.

Men's, women's and children's hosiery Hot Sox, Inc.

Belts and other small leather goods New Campaign, Inc.

Scarves for men and women Echo Scarves, Inc.

Jewelry Carolee, Inc.

Men's, women's and children's gloves Swany, Inc.

FRAGRANCE AND SKIN CARE PRODUCTS

Polo entered the fragrance market in 1978. This global product market
allows the Company to address a broad consumer base and facilitates wide
communication of Polo's essential themes and imagery. The extensive advertising
and promotion which accompany these products have continually reinforced
awareness of the Company's brands and lifestyle image.

From introduction of the Polo fragrance for men and Lauren fragrance for
women in 1978, the Company has continued to expand its offering in the fragrance
and skin care category. In 1990, for example, Polo introduced its Safari
fragrance for women, followed by the Safari fragrance for men in 1992. In
addition to fragrances, these lines include personal care products such as bath
gels, shaving cream and other grooming products. As a complement to Polo's
active apparel, the Company launched Polo Sport for Men, the Fitness Fragrance
in 1994. Polo has continued to build upon this product line with the addition of
innovative Face Fitness and other skin care products. Polo Sport for Women was
launched in fiscal 1996. The Company's strategy is to continue to add products
to its fragrance and skin care line. Worldwide wholesale net sales of Polo
fragrances and skin care products exceeded $270 million in fiscal 1997. L'Oreal
S.A. and its subsidiary, Cosmair

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Inc., have been the Company's fragrance and skin care licensing partners since
1984, and have worldwide distribution rights in perpetuity in the fragrance and
skin care category.

INTERNATIONAL LICENSING ALLIANCES

The Company believes that international markets offer additional
opportunities for Polo's quintessential American designs and lifestyle image and
is committed to the global development of its businesses. International
expansion opportunities may include the roll out of new products and brands
following their launch in the U.S., the introduction of additional product
lines, the entrance into new international markets and the addition of Polo
stores in these markets. For example, following the successful launch of Polo
Jeans Co. in the U.S. in Fall 1996, the Company formalized its plans to
introduce the line in Canada, Europe and Asia in Fall 1997. Polo works with its
14 international licensing partners to facilitate this international expansion.
International licensing partners also operate more than 65 Polo stores.

Polo's first international manufacturing and distribution licensing
alliance was granted to Seibu Department Stores, Ltd. of Japan in 1976 in the
belief that a regional distributor could more effectively develop Polo's
business in its locale given its familiarity and expertise within the market.
The Company's first European license was granted in 1983. Polo's most recent
efforts with regard to international operations include recent extensions of its
licensing alliances for Japan and Europe. In January 1997, the Company concluded
a licensing alliance for Israel and plans to launch its business there with the
opening of three Polo stores in Fall 1997. The Company is also pursuing plans
for expansion in other countries in the Middle East and Eastern Europe.

International licensing partners typically acquire the right to source,
produce, market and sell some or all Polo products in a given geographical area.
International licensing partners are generally subject to the same economic
arrangements as those of domestic product licensing partners. For example,
royalty fees generally range from five to eight percent of the international
licensing partner's sales and advertising expenditures range from two to four
percent of sales. The Company requires each international licensing partner to
distribute products and present an image consistent with that of the Company's
products in the United States. As a result of the Company's requirements of
uniformity, significant information sharing and cooperation is necessary between
the Company and all of its licensing partners, both product and international.
Licensed products are typically designed by the Company, either alone or in
collaboration with its domestic licensing partners. Domestic licensees generally
provide international licensing partners with patterns, piece goods,
manufacturing locations and other information and assistance necessary to
achieve product uniformity, for which they are, in many cases, compensated.

The most significant international licensing partners by royalties in
fiscal 1997 were Seibu Department Stores, Ltd., which oversees distribution of
virtually all of the Company's products in Japan, L'Oreal S.A., which
distributes fragrances and toiletries outside of the United States and Poloco,
S.A., which distributes men's and boys' apparel and certain accessories in
Europe. The Company's ability to maintain and increase royalties under foreign
licenses is dependent upon certain factors not within the Company's control,
including fluctuating currency rates, currency controls, withholding
requirements levied on royalty payments, governmental restrictions on royalty
rates, political instability and local market conditions. See "Risk
Factors -- Foreign Currency Fluctuations" and "-- Dependence on Licensing
Partners for a Substantial Portion of Net Income; Risks Associated with a Lack
of Operational and Financial Control Over Licensed Businesses".

DESIGN

The Company's products reflect a timeless and innovative American style
associated with and defined by Polo and Ralph Lauren. The Company's consistent
emphasis on innovative and distinctive design has been an important contributor
to the prominence, strength and reputation of the Polo Ralph Lauren brands. For
30 years the Company's designers have influenced, anticipated

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and responded to evolving consumer tastes within the context of Polo's defining
aesthetic principles. Mr. Lauren, supported by Polo's design staff, has won
numerous awards for Polo's designs including, most recently, the prestigious
1996 Menswear Designer of the Year award and 1995 Womenswear Designer of the
Year award, both of which were awarded by the CFDA. In addition, Mr. Lauren was
honored with the CFDA Lifetime Achievement Award in 1991, and is the only person
to have won all three of these awards.

Design teams are formed around the Company's brands and product categories
to develop concepts, themes and products for each of Polo's businesses. These
teams work in close collaboration with merchandising, sales and production staff
and licensing partners in order to gain market and other input. Product
merchandisers, for example, provide designers with market trend and other
information and potential business opportunities at initial stages of the design
process. Prior to deliveries each season, design teams work with merchandisers
to edit lines and with advertising and publicity, visual display and sales
staffs to complete a full marketing program for each product line.

All Polo Ralph Lauren products are designed by or under the direction of
Mr. Ralph Lauren and the Company's design staff of approximately 180, which is
divided into three departments. The Menswear Design department is headed by Mr.
Jerome Lauren, Executive Vice President of Menswear Design, who has overseen
menswear design since joining the Company in 1973, and by Mr. John Varvatos,
Senior Vice President of Menswear Design since 1995. Ms. Rosanne Birrittella,
Senior Vice President of Womenswear Design and Advertising, heads the womenswear
design department. She has worked with the Company since 1971 in several senior
creative capacities. Polo's Senior Vice President of Home Design is Ms. Nancy
Vignola, who has worked with the Company since 1976 and has overseen Home
Collection design since its inception in 1982.

The Company operates a research, development and testing facility in
Greensboro, North Carolina, testing labs in New Jersey and Singapore and pattern
rooms in New York and New Jersey.

MARKETING

Polo's marketing program communicates the themes and images of the Polo
Ralph Lauren brands and is an integral feature of its product offering.
Worldwide marketing is managed on a centralized basis through the Company's
advertising and public relations departments in order to ensure consistency of
presentation.

The Company creates the distinctive image advertising for all Polo Ralph
Lauren products, conveying the particular message of each brand within the
context of Polo's core themes. Advertisements generally portray a lifestyle
rather than a specific item and often include a variety of Polo products offered
by both the Company and its licensing partners. Polo's primary advertising
medium is print, with multiple page advertisements appearing regularly in a
range of fashion, lifestyle and general interest magazines including Elle,
Esquire, GQ, The New York Times Magazine, Town and Country, Vanity Fair and
Vogue. Major print advertising campaigns are conducted during the Fall and
Spring retail seasons with additions throughout the year to coincide with
product deliveries. In addition to print, certain product categories utilize
television and outdoor media in their marketing programs.

The Company's licensing partners contribute a percentage (usually between
two and four percent) of their sales of Polo products for advertising. The
Company directly coordinates advertising placement for domestic product
licensing partners. During fiscal 1997, Polo and its licensing partners
collectively spent more than $130 million worldwide to advertise and promote
Polo products.

Polo conducts a variety of public relations activities. Each of the Spring
and Fall womenswear collections is introduced at major fashion shows in New York
which generate extensive domestic and international media coverage. In
recognition of the increasing role menswear plays in the

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fashion industry, each of the Spring and Fall menswear collections is introduced
at fashion presentations organized for the fashion press. In addition, Polo
sponsors professional golfers, organizes in-store appearances by its models and
sponsors sports teams.

SOURCING, PRODUCTION AND QUALITY

The Company's apparel products are produced for the Company by
approximately 160 different manufacturers worldwide. The Company contracts for
the manufacture of its products and does not own or operate any production
facilities. During fiscal 1997, approximately 30% (by dollar volume) of men's
and women's products were produced in the United States and approximately 70%
(by dollar volume) of such products were produced in Hong Kong, Saipan, Malaysia
and other foreign countries. Two manufacturers engaged by the Company accounted
for approximately 16% and 11%, respectively, of the Company's total production
during fiscal 1997. The primary production facilities of these two manufacturers
are located in Malaysia, Sri Lanka, Hong Kong and Mauritius, in the case of the
manufacturer that accounted for approximately 16% of the Company's total
production during fiscal 1997, and in Saipan, in the case of the manufacturer
that accounted for approximately 11% of the Company's total production during
fiscal 1997. No other manufacturer accounted for more than five percent of the
Company's total production in fiscal 1997.

Production is divided broadly into purchase of finished products, where the
supplier is responsible for the purchasing and carrying of raw materials, and
cut, make and trim ("CMT") purchasing, where the Company is responsible for the
purchasing and movement of raw materials to finished product assemblers located
throughout the world. CMT arrangements typically allow the Company more latitude
to incorporate unique detailing elements and to develop specialty items. The
Company uses a variety of raw materials, principally consisting of woven and
knitted fabrics and yarns.

The Company must commit to manufacture the majority of its garments before
it receives customer orders. In addition, the Company must commit to purchase
fabric from mills well in advance of its sales. If the Company overestimates the
demand for a particular product which it cannot sell to its primary customers,
it may use the excess for distribution in its outlet stores or sell the product
through secondary distribution channels. If the Company overestimates the need
for a particular fabric or yarn, that fabric or yarn can be used in garments
made for subsequent seasons or made into past season's styles for distribution
in its outlet stores.

The Company has been working closely with suppliers in recent years to
reduce lead times to maximize fulfillment (i.e., shipment) of orders and to
permit re-orders of successful programs. In particular, the Company has
increased the number of deliveries within certain brands each season so that
merchandise is kept fresh at the retail level. Currently there are, for example,
eight and ten annual deliveries, respectively, of men's Polo Sport and Polo by
Ralph Lauren sportswear, with fewer deliveries for other lines.

Suppliers operate under the close supervision of Polo's product management
department in the United States, and in the Far East under that of a wholly
owned subsidiary which performs buying agent functions for the Company and third
parties. All garments are produced according to Polo's specifications.
Production and quality control staff in the United States and in the Far East
monitor manufacturing at supplier facilities in order to correct problems prior
to shipment of the final product to Polo. While final quality control is
performed at Polo's distribution centers, procedures have been implemented under
Polo's vendor certification program, so that quality assurance is focused as
early as possible in the production process, allowing merchandise to be received
at the distribution facilities and shipped to customers with minimal
interruption.

The Company retains independent buying agents in Europe and South America
to assist the Company in selecting and overseeing independent third-party
manufacturers, sourcing fabric and other products and materials, monitoring
quota and other trade regulations, as well as performing

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some quality control functions. The Company does not enter into written
agreements with its independent buying agents and none of these agents represent
the Company exclusively.

COMPETITION

Competition is strong in the segments of the fashion and consumer product
industries in which the Company operates. The Company competes with numerous
designers and manufacturers of apparel and accessories, fragrances and home
furnishing products, domestic and foreign, some of which may be significantly
larger and have substantially greater resources than the Company. The Company
competes primarily on the basis of fashion, quality, and service. The Company's
business depends on its ability to shape, stimulate and respond to changing
consumer tastes and demands by producing innovative, attractive, and exciting
products, brands and marketing, as well as on its ability to remain competitive
in the areas of quality and price. See "Risk Factors -- Competition".

DISTRIBUTION

To facilitate distribution, men's products are shipped from manufacturers
to the Company's distribution center in Greensboro, North Carolina for
inspection, sorting, packing and shipment to retail customers. The Company's
distribution/customer service facility is designed to allow for high density
cube storage and utilizes bar code technology to provide inventory management
and carton controls. Product traffic management is coordinated from this
facility in conjunction with the Company's product management and buying agent
staffs. Womenswear distribution is provided by a "pick and pack" facility in
Kearney, New Jersey under a warehousing distribution agreement with an
unaffiliated third party. This agreement provides that the warehouse distributor
will perform storage, quality control and shipping services for the Company. In
return, the Company must pay the warehouse distributor a per unit rate and
special processing charges for services such as ticketing, bagging and steaming.
The warehouse distribution agreement may be terminated by either party on 90
days prior written notice. Outlet store distribution and warehousing is
principally handled through the Greensboro distribution center as well as a
satellite center also located in North Carolina. Polo store distribution is
provided by a facility in Columbus, Ohio and a facility in New Jersey which
services the Company's stores in New York City and East Hampton, New York. The
Company's licensing partners are responsible for the distribution of licensed
products, including Home Collection products. The Company is currently
evaluating warehousing and distribution facilities for its retail stores.

MANAGEMENT INFORMATION SYSTEM

The Company's management information system is designed to provide, among
other things, comprehensive order processing, production, accounting and
management information for the marketing, manufacturing, importing and
distribution functions of the Company's business. The Company has installed
sophisticated point-of-sale registers in its Polo stores and outlet stores that
enable it to track inventory from store receipt to final sale on a real-time
basis. The Company believes its merchandising and financial system, coupled with
its point-of-sale registers and software programs, allow for rapid stock
replenishment, concise merchandise planning and real-time inventory accounting
practices.

In addition, the Company has introduced an electronic data interchange
("EDI") system to facilitate the processing of replenishment and fashion orders
from its wholesale customers, the movement of goods through distribution
channels, and the collection of information for planning and forecasting. The
Company has EDI relationships with customers who represent a significant
majority of its wholesale business and is working to expand its EDI capabilities
to include most of its suppliers.

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CREDIT CONTROL

The Company manages its own credit and collection functions. The Company
sells its merchandise primarily to major department stores across the United
States and extends credit based on an evaluation of the customer's financial
condition, usually without requiring collateral. The Company monitors credit
levels and the financial condition of its customers on a continuing basis to
minimize credit risk. The Company does not factor its accounts receivables or
maintain credit insurance to manage the risks of bad debts. The Company's bad
debt write-offs were less than 1% of net sales for fiscal 1997. See "Risk
Factors -- Dependence on Sales to a Limited Number of Large Department Store
Customers; Risks Related to Extending Credit to Customers".

BACKLOG

The Company generally receives wholesale orders for apparel products
approximately three to five months prior to the time the products are delivered
to stores. All such orders are subject to cancellation for late delivery. At
March 29, 1997, backlog was $323.3 million and $44.1 million, as compared to
$261.9 million and $30.5 million at March 30, 1996 for men's and women's
apparel, respectively. The Company's backlog depends upon a number of factors,
including the timing of the market weeks for its particular lines, during which
a significant percentage of the Company's orders are received, and the timing of
shipments. As a consequence, a comparison of backlog from period to period is
not necessarily meaningful and may not be indicative of eventual shipments.

TRADEMARKS

The Company is the owner of the "Polo", "Ralph Lauren" and the famous polo
player astride a horse trademarks in the United States. As part of the
Reorganization, the Company acquired certain trademarks and related rights
pertaining to fragrances and cosmetics. See "Reorganization and Related
Transactions". Additional trademarks owned by the Company include, among others,
"Chaps", "Polo Sport", "Lauren/Ralph Lauren", "RALPH" and "RRL". In connection
with the adoption of the "RRL" trademarks by the Company, pursuant to an
agreement with the Company, Mr. 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 addition, Mr. Lauren engages in personal projects involving
non-Company related film or theatrical productions through RRL Productions,
Inc., a Company wholly owned by Mr. Lauren. See "Certain Relationships and
Related Transactions -- Other Agreements, Transactions and Relationships".

The Company's trademarks are the subject of registrations and pending
applications throughout the world for use on a variety of items of apparel,
apparel-related products, home furnishings and beauty products, as well as in
connection with retail services, and the Company continues to expand its
worldwide usage and registration of related trademarks. The Company regards the
license to use the trademarks and its other proprietary rights in and to the
trademarks as valuable assets in the marketing of its products and, on a
worldwide basis, vigorously seeks to protect them against infringement. As a
result of the appeal of its trademarks, Polo's products have been the object of
counterfeiting. The Company has a broad enforcement program which has been
generally effective in controlling the sale of counterfeit products in the
United States and in major markets abroad.

In markets outside of the United States, the Company's rights to some or
all of its trademarks may not be clearly established. In the course of its
international expansion, the Company has experienced conflicts with various
third parties which have acquired ownership rights in certain trademarks which
include "Polo" and/or a representation of a polo player astride a horse which
would have impeded the Company's use and registration of its principal
trademarks. While such conflicts are common and may arise again from time to
time as the Company continues its

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international expansion, the Company has in the past successfully resolved such
conflicts through both legal action and negotiated settlements with third-party
owners of such conflicting marks. See "Risk Factors -- Trademarks".

Two agreements by which the Company resolved conflicts with third-party
owners of other trademarks impose current restrictions or monetary obligations
on the Company. In one, the Company reached an agreement with a third party
which owned competing registrations in numerous European and South American
countries for the trademark "Polo" and a symbol of a polo player astride a
horse. By virtue of the agreement, Polo has acquired that third party's
portfolio of trademark registrations, in consideration of the payment (capped as
set forth below) of 30% of the Company's European and Mexican royalties and 50%
of its South American royalties (solely in respect of the Company's use of
trademarks which include "Polo" and the polo player symbol, and not, for
example, "Ralph Lauren" alone, "Lauren/Ralph Lauren", "RRL", etc.). Remittances
to this third party are not reflected in licensing revenue in the Company's
financial statements and will cease no later than 2008, or sooner, when the
remittances with respect to Europe and Mexico to this third party aggregate
$15.0 million. As of March 29, 1997, the Company has paid approximately $6.6
million to this third party. The Company's obligation to share royalties with
respect to Central and South America and parts of the Caribbean expires in 2013,
but the Company also has the right to terminate this obligation at any time by
paying $3.0 million. The second agreement was reached with a third party which
owned conflicting registrations of the trademarks "Polo" and a polo player
astride a horse in the U.K., Hong Kong, and South Africa. Pursuant to the
agreement, the third party retains the right to use its "Polo" and polo player
symbol marks in South Africa and certain other African countries, and the
Company agreed to restrict use of those Polo marks in those countries to
fragrances and cosmetics (as to which the Company's use is unlimited) and to the
use of the Ralph (polo player symbol) Lauren mark on women's and girls' apparel
and accessories. By agreeing to those restrictions, the Company secured the
unlimited right to use its trademarks (without payment of any kind) in the
United Kingdom and Hong Kong, and the third party is prohibited from
distributing products under those trademarks in those countries.

Although the Company has not in the past suffered any material inhibition
from doing business in desirable markets, there can be no assurance that
significant impediments will not arise in the future as it expands product
offerings and additional trademarks to new markets.

EMPLOYEES

As of March 29, 1997, the Company had approximately 4,000 employees,
including 3,760 in the United States and 240 in foreign countries. Of the total,
approximately 45 employees hold executive and administrative positions, 180 are
engaged in design, 100 are engaged in advertising, public relations and creative
services, 160 are engaged in production, 220 are engaged in wholesale sales and
merchandising, 2,000 are engaged in retail sales, 600 are engaged in
distribution and the remaining employees are engaged in other aspects of the
business. Approximately 30 of the Company's United States production and
distribution employees in the womenswear business are members of the Union of
Needletrades, Industrial & Textile Employees under an industry association
collective bargaining agreement which the Company's womenswear subsidiary has
adopted. This contract was extended to June 1997 and is currently under
renegotiation. The Company considers its relations with both its union and
non-union employees to be good.

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PROPERTIES

The Company does not own any real property except an undeveloped parcel of
land adjacent to its leased Greensboro, North Carolina distribution facility.
Certain information concerning the Company's principal facilities in excess of
100,000 rentable square feet and of its existing flagship stores of 20,000
rentable square feet or more, all of which are leased, is set forth below:

APPROXIMATE CURRENT LEASE
LOCATION USE SQ. FT. TERM EXPIRATION
-------------------------- ----------------------- ------------- ------------------

Greensboro, N.C. Distribution 330,000 January 31, 2006

650 Madison Avenue, NYC Executive, corporate 170,000 December 31, 2004
and design offices,
men's showrooms

Lyndhurst, N.J. Corporate and retail 143,000 February 28, 2003
administrative offices

Winston-Salem, N.C. Distribution 115,000 June 30, 1998

867 Madison Avenue, NYC Direct Retail 27,000 December 31, 2004

During fiscal 1997, the Company signed leases for its two new flagship
stores in Chicago and London. The Chicago lease is for approximately 37,000
square feet of rentable space and expires in 2017, and the London store lease is
for approximately 45,000 square feet of rentable space for office, showroom and
retail use and expires in 2021.

The leases for the Company's non-retail facilities (approximately 18 in
all) provide for aggregate annual rentals of $15.1 million in fiscal 1997. The
Company anticipates that it will be able to extend those leases which expire in
the near future on terms satisfactory to the Company or, if necessary, locate
substitute facilities on acceptable terms.

As of March 29, 1997, the Company operated six Polo stores and 65 outlet
stores in leased premises not including the 21 stores operated by PRC. Aggregate
annual rent paid for retail space by the Company in fiscal 1997 totaled $10.7
million, and aggregate annual rent paid for retail space by PRC in fiscal 1997
totaled $7.5 million. Except for approximately three outlet stores for which the
Company will not seek renewal upon lease expiration, the Company anticipates
that it will be able to extend those leases which expire in the near future on
satisfactory terms or to relocate to more desirable locations. See
" -- Operations -- Direct Retailing" for descriptions of the store properties.

The Company is currently re-evaluating its warehousing and distribution
needs for its retail operations. The Company believes that its existing
facilities are well maintained and in good operating condition, and are
otherwise adequate for its present and foreseeable level of operations for the
next few years.

GOVERNMENT REGULATION

The Company's import operations are subject to constraints imposed by
bilateral textile agreements between the United States and a number of foreign
countries. These agreements, which have been negotiated bilaterally either under
the framework established by the Arrangement Regarding International Trade in
Textiles, known as the Multifiber Agreement, or other applicable statutes,
impose quotas on the amounts and types of merchandise which may be imported into
the United States from these countries. These agreements also allow the
signatories to adjust the quantity of imports for categories of merchandise
that, under the terms of the agreements, are not currently subject to specific
limits. The Company's imported products are also subject to United States
customs duties which comprise a material portion of the cost of the merchandise.
See "Risk Factors--Risks Associated with Changes in Social, Political, Economic
and Other Conditions

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Affecting Foreign Operations and Sourcing; Possible Adverse Impact of Changes in
Import Restrictions".

Apparel products are subject to regulation by the Federal Trade Commission
in the United States. Regulations relate principally to the labeling of the
Company's products. The Company believes that it is in substantial compliance
with such regulations, as well as applicable federal, state, local, and foreign
rules and regulations governing the discharge of materials hazardous to the
environment. There are no significant capital expenditures for environmental
control matters either estimated in the current year or expected in the near
future. The Company's licensed products and licensing partners are, in addition,
subject to additional regulation. The Company's agreements require its licensing
partners to operate in compliance with all laws and regulations, and the Company
is not aware of any violations which could reasonably be expected to have a
material adverse effect on the Company's business.

LEGAL PROCEEDINGS

The Company is involved from time to time in routine legal claims,
involving trademark and intellectual property, licensing, employee relations and
other matters incidental to its business. See "-- Trademarks". Currently, the
Company is a party to an arbitration proceeding which it initiated in San
Francisco to resolve a dispute with The Magnin Company, Inc., an independent
free-standing retail licensee which operates a Polo store in Beverly Hills,
California. This licensee had previously claimed that the Company breached its
license agreement when the Company refused last year to authorize the opening of
a free-standing Polo concession at Los Angeles International Airport by the
licensee. The Company believes it was acting within its contractual rights when
it rejected the licensee's proposal. The Company initiated the arbitration
proceeding in November 1996 under the rules of the American Arbitration
Association in accordance with the terms of its license agreement for a
declaration of rights under such agreement. The licensee in a counterclaim has
sought compensatory and punitive damages in excess of $5 million. In the opinion
of the Company's management, the resolution of any matter currently pending will
not have a material adverse effect on the Company's financial condition or
results of operations.

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MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The names of the directors and executive officers of the Company upon
completion of the Offerings and their respective ages and positions are as
follows:

NAME AGE POSITION
- ------------------------------ --- --------------------------------------------

Ralph Lauren.................. 57 Chairman, Chief Executive Officer and
Director
Michael J. Newman............. 51 Vice Chairman, Chief Operating Officer and
Director
Donna A. Barbieri............. 50 Group President, Retail Outlet Stores and
Creative Services
David J. Hare................. 52 Group President, Polo Ralph Lauren Stores
John D. Idol.................. 38 Group President, Product Licensing including
Home Collection
F. Lance Isham................ 52 Group President, Menswear
Cheryl L. Sterling Udell...... 47 Group President, Womenswear
Victor Cohen.................. 43 Senior Vice President, General Counsel and
Secretary
Nancy A. Platoni Poli......... 41 Vice President and Chief Financial Officer
Karen L. Rosenbach............ 42 Senior Vice President, Human Resources and
Administration
Richard A. Friedman........... 39 Director

Shortly after the Offerings, the Company will add another three directors.

RALPH LAUREN, the Company's Chairman and Chief Executive Officer, and a
Director of the Company, founded Polo in 1968 and has provided leadership in the
design, marketing and operational areas since such time.

MICHAEL J. NEWMAN is a Director of the Company and has been Vice Chairman
and Chief Operating Officer of the Company since 1995 and is responsible for its
day-to-day operations. He was President and Chief Operating Officer of the
Menswear operations from 1991 to 1994, and Executive Vice President from 1989 to
1991. Mr. Newman joined Polo as Vice President of Finance and Chief Financial
Officer in 1987. Prior to joining the Company, Mr. Newman was Senior Vice
President of Finance at Kaiser-Roth Apparel.

DONNA A. BARBIERI has been Group President, Retail Outlet Stores and
Creative Services since September 1995. Ms. Barbieri joined Polo in 1992 as a
Vice President, Director of Stores for Fashions Outlet of America, Polo's outlet
store operation, and the Retail operations. Before joining the Company, she was
a Vice President and General Merchandise Manager for women's apparel for
Bloomingdale's and Federated Department Stores, Inc.

DAVID J. HARE has been Group President, Polo Ralph Lauren Stores since
April 1997 and was, prior to such time, President and Chief Executive Officer of
PRC since 1993. Mr. Hare assumed responsibility for PRC's operations when Polo
merged certain of its Polo store operations with Perkins Shearer, Inc. to form
PRC in 1993. Prior to that, he had been President and Chief Executive Officer of
Perkins Shearer, Inc. since 1969.

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JOHN D. IDOL has been Group President, Product Licensing, including Home
Collection operations since 1996. Mr. Idol oversees development, marketing and
sales planning of all domestic licensed products. He joined the Company in 1984
as Vice President, Sales, of Home Collection operations, and was appointed
President of that division in 1991.

F. LANCE ISHAM has been Group President, Menswear since 1995. Mr. Isham is
responsible for the day-to-day operations of sales, merchandising, retail
development, production, manufacturing services and distribution for menswear.
He joined Polo in 1982, and has held a variety of sales positions in the Company
including Executive Vice President of Sales and Merchandising.

CHERYL L. STERLING UDELL has been Group President, Womenswear since 1995.
Prior to that time, she was President and Chief Operating Officer of the
Licensing and Retail divisions. Ms. Sterling Udell joined Polo in 1978 and has
held various management positions in the Company.

VICTOR COHEN has been Senior Vice President, General Counsel and Secretary
for the Company since 1996. Mr. Cohen joined Polo in 1983 as its senior legal
officer responsible for all legal and corporate affairs. Prior to joining the
Company, he was associated with the law firm of Skadden, Arps, Slate, Meagher &
Flom.

NANCY A. PLATONI POLI has been Chief Financial Officer of the Company since
1996. Ms. Poli was Vice President and Controller from 1989 to 1996, and assumed
responsibility for treasury functions in addition to her controller functions in
1995. Prior to that, she was Controller of Retail Finance. Ms. Poli joined the
Company in 1984.

KAREN L. ROSENBACH has been Senior Vice President, Human Resources and
Administration since 1996. Ms. Rosenbach joined the Company in 1988 as Vice
President of Human Resources. Prior to joining the Company, she was Vice
President of Human Resources, Real Estate Group at Chemical Bank.

RICHARD A. FRIEDMAN has been a member of the Advisory Board of Enterprises
since 1994 and will become a director of the Company prior to commencement of
the Offerings. Mr. Friedman is a Managing Director of Goldman, Sachs & Co., and
head of the Principal Investment Area. He joined Goldman, Sachs & Co. in 1981.
Mr. Friedman is a member of the board of directors or advisory committee of AMF
Group, Inc., Diamond Cable Communications PLC, Globe Manufacturing Co. and
Marcus Cable Company, L.P.

BOARD OF DIRECTORS

The Company's Board of Directors will initially consist of six members
(including the three directors to be added after completion of the Offerings).
After this initial selection, four of the directors will be elected by the
holders of Class B Common Stock (the "Class B Directors"), one of the directors
will be elected by the holders of Class C Common Stock (the "Class C Director")
and one of the directors will be elected by the holders of Class A Common Stock
(the "Class A Director"). While shares of Class A Common Stock, Class B Common
Stock and Class C Common Stock are outstanding and while the number of
outstanding shares of Class B Common Stock on the record date of any meeting of
stockholders of the Company is at least 10% of the number of outstanding shares
of all classes of Common Stock outstanding immediately upon the consummation of
the Offerings (subject to appropriate adjustments for stock splits, reverse
stock splits, stock dividends and similar transactions), if the size of the
Board (exclusive of Preferred Directors(as defined)) is increased, all
additional members entitled to be elected by the holders of Common Stock will be
Class B Directors with the following exceptions: (i) an additional Class A
Director will be added if the Board (exclusive of Preferred Directors) is
increased to ten members and again if the Board (exclusive of Preferred
Directors) is increased to 19 members; and (ii) an additional Class C Director
will be added if the Board (exclusive of Preferred Directors) is increased to 13
members. Accordingly, while the number of outstanding shares of Class B Common
Stock on the record date of any meeting of stockholders of the Company is at
least 10% of the aggregate number of shares of Common Stock outstanding
immediately upon the consummation of the Offerings (subject to appropriate
adjustments for stock splits, reverse stock splits, stock dividends and

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similar transactions), the holders of Class B Common Stock will elect at least
two-thirds of the members of the Board of Directors entitled to be elected by
the holders of Common Stock. If on the record date for any meeting of
stockholders of the Company the number of outstanding shares of Class B Common
Stock is less than 10% of the aggregate number of shares of Common Stock
outstanding immediately upon the consummation of the Offerings (subject to
appropriate adjustments for stock splits, reverse stock splits, stock dividends
and similar transactions), directors that would have been elected by a separate
vote of that class will instead be elected by the holders of Class A Common
Stock and the holders of Class B Common Stock, voting together, with holders of
Class A Common Stock having one vote per share and holders of Class B Common
Stock having ten votes per share. If on the record date for any meeting of
stockholders of the Company the number of outstanding shares of Class C Common
Stock is less than 10% of the aggregate number of shares of Common Stock
outstanding immediately upon the consummation of the Offerings (subject to
appropriate adjustments for stock splits, reverse stock splits, stock dividends
and similar transactions), the Class C Common Stock is automatically converted
into Class A Common Stock and the director or directors that would have been
elected by the holders of the Class C Common Stock will instead be elected by
the holders of Class A Common Stock, voting as a separate class, or, if on the
record date for any meeting of stockholders of the Company the amount of Class B
Common Stock is less than 10% of the aggregate number of shares of Common Stock
outstanding immediately upon the consummation of the Offerings (subject to
appropriate adjustments for stock splits, reverse stock splits, stock dividends
and similar transactions), by the holders of Class A Common Stock and Class B
Common Stock, voting together, with the holders of Class A Common Stock having
one vote per share and the holders of Class B Common Stock having ten votes per
share. Because of the disproportionate voting rights of the Class B Common
Stock, in certain instances holders of Class B Common Stock will still be able
to elect a majority of the Board of Directors entitled to be elected by the
holders of Common Stock when the number of outstanding shares of Class B Common
Stock is less than 10% of the aggregate number of shares of Common Stock
outstanding immediately upon the consummation of the Offerings (subject to
appropriate adjustments for stock splits, reverse stock splits, stock dividends
and similar transactions). See "Risk Factors--Control by Lauren Family Members
and Anti-Takeover Effect of Multiple Classes of Stock" and "Description of
Capital Stock".

COMPENSATION OF DIRECTORS

Each non-employee director will receive an annual retainer of $25,000 and
will be eligible to receive stock option grants under the Company's 1997
Non-Employee Director Option Plan. See "--1997 Non-Employee Director Option
Plan". Non-employee directors also will be entitled to receive $1,000 for each
board or committee meeting attended. Directors who are also employees of the
Company will receive no additional compensation for service as a director.

COMMITTEES OF THE BOARD OF DIRECTORS

Within 90 days of the closing of the Offerings, the Board of Directors will
establish an Audit Committee. The Audit Committee will consist of independent
directors selected by the Board of Directors. The functions of the Audit
Committee will be to recommend annually to the Board of Directors the
appointment of the independent auditors of the Company, discuss and review in
advance the scope and the fees of the annual audit and review the results
thereof with the independent auditors, review and approve non-audit services of
the independent auditors, review compliance with existing major accounting and
financial reporting policies of the Company, review the adequacy of the
financial organization of the Company, and review management's procedures and
policies relating to the adequacy of the Company's internal accounting controls
and compliance with applicable laws relating to accounting practices.

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The Board of Directors does not currently have a Compensation Committee but
anticipates establishing one within 90 days of the closing of the Offerings.
Prior to the Offerings, the Company's senior management was directly involved in
setting compensation for the Company's executives. The functions of the
Compensation Committee will be to review and approve annual salaries, bonuses,
and grants of stock options pursuant to the Company's 1997 Stock Incentive Plan,
and to review and approve the terms and conditions of all material employee
benefit plans or changes thereto. The Company anticipates that following the
closing of the Offerings, its Compensation Committee will implement compensation
policies that could be based on any number of a variety of factors including
compensation policies of comparable companies, achievement of net earnings
targets by the Company and/or by divisions and the attainment of individual
performance goals. The Compensation Committee will consist of directors selected
by the Board of Directors.

Transactions between the Company and Mr. Lauren on the one hand, and
between the Company and the GS Group on the other hand, will be approved by the
Board of Directors or a committee of directors not affiliated with Mr. Lauren or
the GS Group, as applicable.

EXECUTIVE COMPENSATION

The following table sets forth, for the year ended March 29, 1997, the cash
compensation paid to the Company's Chief Executive Officer and its four most
highly-paid executive officers (collectively, the "Named Executive Officers")
for services rendered in all capacities in which they served during such year:

SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION(1)
------------------------------ ALL OTHER
SALARY BONUS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($)
- ---------------------------------------------- ---- ---------- ---------- ------------

Ralph Lauren.................................. 1997 $2,700,000 $ 0 $1,074,845(2)
Chairman of the Board and Chief Executive
Officer
Michael J. Newman............................. 1997 $ 800,000 $5,167,000 $ 577,785(3)
Vice Chairman and Chief Operating Officer
John D. Idol.................................. 1997 $ 725,000 $ 654,300 $ 457,601(4)
Group President, Product Licensing including
Home Collection
Cheryl L. Sterling Udell...................... 1997 $ 630,000 $ 630,000 $ 309,076(5)
Group President, Womenswear
F. Lance Isham................................ 1997 $ 500,000 $ 500,000 $ 331,706(6)
Group President, Menswear

- ---------------

(1) Other annual compensation did not exceed $50,000 or 10% of the total salary
and bonus for any of the Named Executive Officers.

(2) The amount reported under "All Other Compensation" in fiscal 1997 for Mr.
Lauren includes the estimated dollar value of the benefit to the executive
officer of Company-paid premiums on split-dollar life insurance policies on
the lives of the executive and his spouse in the amount of $1,064,162. The
estimated dollar value of the benefit of Company-paid premiums on such
split-dollar life insurance policies in fiscal 1995 and fiscal 1996 were
$1,030,372 and $1,037,085, respectively. The Company will recover all
premiums paid by it at the time death benefits are paid thereon, and may
recover such amounts earlier under certain circumstances. The maximum
potential value is calculated as if the fiscal 1997 premiums were advanced
to Mr. Lauren without interest until the time the Company expects to recover
the premium (i.e., upon death of the executive officer). The amount reported
also includes the value of insurance premiums paid by the Company in the
amount of $10,683 with respect to supplementary medical benefits. See
"Certain Relationships and Related Transactions -- Other Agreements,
Transactions and Relationships".

(Continued on following page)

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(3) Reflects (i) the estimated dollar value of the benefit to the executive
officer of Company-paid premiums on split-dollar life insurance (calculated
on the same basis as disclosed in note (2)) and supplementary medical
benefits in the amounts of $5,805 and $2,337, respectively, (ii) $322,159
for contributions to the Company's Wealth Plan (as defined) and $246,561 for
the Executive Deferred Compensation Trusts (as defined) and (iii) matching
benefits of $923 paid under the 401K Plan (as defined).

(4) Reflects (i) the estimated dollar value of the benefit to the executive
officer of Company-paid premiums on split-dollar life insurance (calculated
on the same basis as disclosed in note (2)) and supplementary medical
benefits in the amounts of $2,029 and $2,271, respectively, (ii) $97,882 for
contributions to the Company's Wealth Plan and $352,319 for the Executive
Deferred Compensation Trusts and (iii) matching benefits of $3,100 paid
under the 401K Plan.

(5) Reflects (i) the estimated dollar value of the benefit to the executive
officer of Company-paid premiums on split-dollar life insurance (calculated
on the same basis as disclosed in note (2)) and supplementary medical
benefits in the amounts of $4,149 and $5,956, respectively, (ii) $89,728 for
contributions to the Company's Wealth Plan and $204,743 for the Executive
Deferred Compensation Trusts and (iii) matching benefits of $4,500 paid
under the 401K Plan.

(6) Reflects (i) the estimated dollar value of the benefit to the executive
officer of Company-paid premiums on split-dollar life insurance (calculated
on the same basis as disclosed in note (2)) and supplementary medical
benefits in the amounts of $7,003 and $5,023, respectively, (ii) $78,629 for
contributions to the Company's Wealth Plan and $236,551 for the Executive
Deferred Compensation Trusts and (iii) matching benefits of $4,500 paid
under the 401K Plan.

EXECUTIVE COMPENSATION AGREEMENTS

DEFERRED COMPENSATION AGREEMENTS. The Company has entered into deferred
compensation agreements with each of Messrs. Newman, Idol and Isham and Ms.
Sterling Udell (effective as of April 1, 1993, April 3, 1994, April 1, 1995 and
April 1, 1993, respectively, and expiring on March 31, 2003, March 31, 2014,
March 31, 2005 and March 31, 2003, respectively) as well as with certain other
executives of the Company (each a "Deferred Compensation Agreement").

The Deferred Compensation Agreements generally provide that the Company
will, on a monthly basis, contribute to trusts established by the Company (the
"Executive Deferred Compensation Trusts"), and credit a book reserve account in
the executive's name (the "Deferred Compensation Account"), an amount equal to,
in most cases, 20% of the executive's monthly base salary, and, in the case of
Messrs. Idol and Isham, 20% of the executive's monthly base salary and any
incentive or bonus payments received by him during such month, provided that the
executive is employed with the Company on the last day of such month. Amounts
contributed to the Executive Deferred Compensation Trusts and credited to the
executive's Deferred Compensation Account will be invested and reinvested by the
trustee of the Executive Deferred Compensation Trusts (the "Trustee") in one or
more mutual funds managed by the Vanguard Group of Investment Companies, at the
executive's election. This deferred compensation arrangement is unfunded for tax
purposes and for purposes of Title I of the Employee Retirement Income Security
Act of 1974, as amended, any funds invested under the Executive Deferred
Compensation Trusts continue to be part of the general funds of the Company.

The executive's interest in his or her Deferred Compensation Account will
vest at the rate of 20% per year on the anniversary date of the effective date
of the Deferred Compensation Agreement (or, in the case of Mr. John Idol, 60% as
of April 1, 1995 and thereafter, at the rate of 10% on each of the four
anniversaries thereof), but only if the executive has remained continuously
employed by the Company as of each anniversary date. However, in the event that
the executive's employment is terminated by disability or by the Company other
than for "cause" or if the executive terminates his or her employment for "good
reason", the executive will be 100% vested. On the earlier date of the
expiration of the term of the Deferred Compensation Agreement (or, in the case
of Mr. Idol, April 1, 2004) or the earliest date practicable following the
executive's termination of employment with the Company for any reason, the
Company is obligated to make a lump sum payment to the executive equal to the
vested amount credited to his Deferred Compensation Account. In addition, with
respect to Mr. Idol only, if such executive officer is still employed by the
Company as of April 1, 2004, contributions to the Executive Deferred
Compensation Trust shall begin anew and the Company is obligated to make a lump
sum payment to Mr. Idol equal to the vested amount credited to his Deferred
Compensation Account on the earlier date of April 1, 2014 or the earliest date
practicable following termination of Mr. Idol's employment with the Company.

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RALPH LAUREN'S EMPLOYMENT AGREEMENT. Prior to the commencement of the
Offerings, the Company expects to enter into an employment agreement with Mr.
Lauren (the "Lauren Agreement"). The Lauren Agreement provides for Mr. Lauren's
employment as Chairman of the Board of Directors and Chief Executive Officer of
the Company for a term of five years (the "Term"), subject to automatic,
successive one-year extensions thereafter unless either party gives the other 90
days prior written notice that the Term will not be extended.

The Lauren Agreement provides for an annual base salary of $1,000,000 and
annual bonus payments based upon Company performance with a range of $2,000,000
to $5,000,000, with $3,500,000 payable for achieving 100% of targeted
performance goals; provided that Mr. Lauren's entitlement to receive the annual
bonus during any period when compensation payable pursuant to the Lauren
Agreement is subject to the deduction limitations of section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"), will be subject to
shareholder approval of a plan or arrangement evidencing such annual bonus
opportunity that complies with the requirements of section 162(m) of the Code.
Upon commencement of the Offerings, Mr. Lauren will receive an initial grant of
options to purchase 500,000 shares of Class A Common Stock (the "Initial Lauren
Options"), each with an exercise price equal to the initial public offering
price. The Initial Lauren Options will be fully vested on the date of grant. In
addition, with respect to at least each of the first three fiscal years
occurring after the commencement of the Offerings, Mr. Lauren will receive
options to purchase 250,000 shares of Class A Common Stock (the "Annual Lauren
Options") at an exercise price per share equal to the fair market value per
share of Class A Common Stock as of the date of grant. The Annual Lauren Options
will vest and become exercisable ratably over three years on each of the first
three anniversaries of the date of grant. Mr. Lauren will be eligible to
continue to participate in all employee benefit plans and arrangements of the
Company for its senior executive officers in which he currently participates and
will be eligible to participate in any future employee benefit plans and
arrangements established for senior officers of the Company on terms no less
favorable than are provided to any other senior executive officer of the
Company. In addition, the Company has agreed to maintain, and make premium
contributions with respect to, certain split dollar and other life insurance
arrangements between the Company and Mr. Lauren, his family and/or life
insurance trusts for the benefit of any of them, that are currently maintained
or contributed to by the Company. See "Management -- Executive
Compensation -- Summary Compensation Table".

The Company may terminate Mr. Lauren's employment in the event of his death
or disability, in which case Mr. Lauren or his estate will be entitled to a lump
sum cash payment equal to the sum of: (i) his base salary through the date on
which his death or termination due to disability occurred; (ii) any accrued and
unpaid compensation for any prior fiscal year; and (iii) a pro-rata portion of
the annual bonus he would otherwise have received for the fiscal year in which
his death or termination due to disability occurred. In addition, any unvested
options will vest immediately.

If Mr. Lauren resigns with "Good Reason", or if the Company terminates Mr.
Lauren's employment without "Cause", or if the Company elects not to extend the
Term, then Mr. Lauren is entitled to receive an immediate lump sum cash payment
equal to the sum of: (i) his base salary otherwise payable through the later of
(a) the fifth anniversary of the commencement of the Offerings, or (b) three
years from the date of termination (the "Severance Period"); (ii) any accrued
but unpaid compensation for any prior fiscal year; and (iii) bonus compensation
for each full or partial fiscal year that occurs during the Severance Period
equal to the average annual bonus paid to Mr. Lauren in each of the immediately
preceeding two fiscal years; provided that the amount of bonus compensation for
any partial fiscal year beyond the third fiscal year following the date of Mr.
Lauren's termination will be pro-rated. In addition, any unvested options will
continue to vest on schedule, provided that Mr. Lauren complies with certain
non-competition and other restrictive covenants and during the Severance Period
the Company will (i) continue to provide Mr. Lauren with office facilities and
secretarial assistance; (ii) continue to maintain and make premium contributions
with respect to the split dollar and life insurance arrangements described above
and

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(iii) continue to provide Mr. Lauren with welfare and medical plan coverage and
certain other fringe benefits.

If Mr. Lauren resigns without Good Reason or if the Company terminates Mr.
Lauren's employment for Cause or if Mr. Lauren elects not to renew the Term,
then Mr. Lauren is entitled to an immediate lump sum cash payment equal to the
sum of: (i) his base salary through the date of termination; and (ii) any
accrued but unpaid compensation for any prior fiscal year. Mr. Lauren will also
receive the pro-rata portion of his annual bonus for the fiscal year in which
termination occurred to be paid when bonuses are normally paid. In addition, any
unvested options will be forfeited.

"Good Reason", for the purposes of the Lauren Agreement and the Newman
Agreement (as defined), as amended by the Newman Amendment (as defined), means:
(i) a material diminution in the executive's duties or the assignment to the
executive of a title or duties inconsistent with his position; (ii) a reduction
in base salary or annual incentive bonus opportunity; (iii) a failure by the
Company to comply with any material provision of the executive's employment
agreement; or (iv) the executive's ceasing to be entitled to the payment of an
annual incentive bonus as a result of the failure of the Company's shareholders
to approve a plan or arrangement evidencing such annual incentive bonus in a
manner that complies with the requirements of section 162(m) of the Code;
provided that the events described in clauses (i), (ii) and (iii) will not
constitute Good Reason unless and until such diminution, reduction or failure
(as applicable) has not been cured within thirty days after notice of such
noncompliance has been given to the Company. "Cause" means: (i) the willful and
continued failure by the executive to substantially perform his or her duties;
(ii) a conviction of or plea of nolo contendere to a crime constituting any
felony; or (iii) willful gross misconduct relating to the executive's employment
that is materially injurious to the Company or subjects the Company to public
ridicule or embarrassment.

Pursuant to the Lauren Agreement, Mr. Lauren cannot compete with the
Company during the term of his employment. In addition, if Mr. Lauren resigns
his employment without Good Reason, then Mr. Lauren cannot compete with the
Company in violation of the Lauren Agreement until the later of: (i) the
expiration of the Term, or (ii) two years from the date of termination of
employment. If Mr. Lauren resigns with Good Reason or if the Company terminates
Mr. Lauren's employment without Cause, then Mr. Lauren cannot compete with the
Company for two years from the date of termination of employment. If Mr.
Lauren's employment is terminated for Cause, the Company may elect to prohibit
Mr. Lauren from competing with the Company for up to two years in consideration
for the payment of an amount equal to Mr. Lauren's base salary and bonus (equal
to the average annual incentive bonus over the preceding two years) for each
year that Mr. Lauren is prohibited from competing with the Company.

MICHAEL NEWMAN'S EMPLOYMENT AGREEMENT. The Company has entered into an
employment agreement with Mr. Newman (the "Newman Agreement"), which provides
for his employment as Vice Chairman and Chief Operating Officer of the Company.
The terms of the Newman Agreement are substantially similar to the employment
agreement terms for other executive officers described below under
" -- Employment Agreements with other Executives." However, prior to the
commencement of the Offerings, the Company expects to enter into an amendment to
the Newman Agreement (the "Newman Amendment") which provides for certain
modifications to the terms of the Newman Agreement, most of which will become
effective only following the commencement of the Offerings. Following the
commencement of the Offerings, the Newman Agreement as amended by the Newman
Amendment will have a term of five years (the "Newman Term"), subject to
automatic, successive one year extensions thereafter unless either party gives
the other twelve months prior notice that the Newman Term will not be extended.
In addition, Mr. Newman's base salary will not be less than $900,000 and Mr.
Newman will be eligible to earn an annual incentive bonus calculated as a
percentage of the Company's Income Before Taxes ("IBT") in excess of $75
million. For IBT of $75 million to $150 million, Mr. Newman will receive 1.75%
of IBT in excess of $75 million. For IBT of $150 million to $200 million, Mr.
Newman will receive 1% of IBT in excess of $150 million. For IBT over $200
million, Mr. Newman will receive 0.5% of IBT in excess of $200 million. Under
the Newman Amendment, Mr. Newman's total incentive bonus may not exceed $3
million per

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year and Mr. Newman's entitlement to payment of an incentive bonus during any
period when the compensation payable pursuant to the Newman Agreement is subject
to the deduction limitations of section 162(m) of the Code will be subject to
shareholder approval of a plan or arrangement evidencing such annual incentive
bonus opportunity that complies with the requirements of section 162(m) of the
Code.

Upon commencement of the Offerings, Mr. Newman was granted restricted
shares of Class A Common Stock with a fair market value (based upon the initial
public offering price of the Class A Common Stock) equal to $2 million. The
restricted shares will vest immediately with respect to one third of the shares,
and will vest ratably with respect to the remaining shares on each of the second
and third anniversaries of the commencement of the Offerings, subject to Mr.
Newman's continued employment with the Company. Upon commencement of the
Offerings, Mr. Newman will also be granted options to acquire 350,000 shares of
Class A Common Stock with an exercise price equal to the initial public offering
price. In addition, with respect to at least each of the first three fiscal
years occurring after the commencement of the Offerings, in each fiscal year
occurring after the commencement of the Offerings, Mr. Newman will be granted
options to purchase 150,000 shares of Class A Common Stock at an exercise price
equal to the fair market value per share of Class A Common Stock as of the date
of grant. All of Mr. Newman's options will vest ratably over three years on each
of the first three anniversaries of the date of grant.

Pursuant to the Newman Amendment, if Mr. Newman resigns for Good Reason or
if the Company terminates his employment without Cause, then Mr. Newman will
receive a pro-rata portion of his incentive bonus for the year of termination
plus an amount, payable over a three-year period, equal to the sum of: (i) the
greater of (x) three and (y) five, less the number years (including fractions
thereof) that shall have elapsed since the commencement of the Offerings, times
his annual base salary, plus (ii) two times his average annual incentive bonus
paid over the preceding two years. Any unvested restricted shares or options
will continue to vest as scheduled, provided that Mr. Newman continues to comply
with certain non-competition and other restrictive covenants. In addition, Mr.
Newman will be entitled to (i) continued participation in the Company's health
benefit plans during such three-year period, (ii) continued use of the Company
automobile until the then existing lease expires and (iii) waiver of the
collateral interest securing return to the Company of premiums paid for Mr.
Newman's split dollar insurance policy. If a change of control of the Company
occurs prior to Mr. Newman's termination of employment, then he will be entitled
to elect to receive the cash severance payments described above in two equal
lump sum installments payable within 30 days after the date of termination and
one year after the date of termination, respectively.

If the Company elects not to extend the Newman Term, then Mr. Newman will
receive an amount, payable over a one-year period, equal to the sum of (i) his
annual base salary, plus (ii) his average annual incentive bonus paid over the
preceding two years and any unvested restricted shares or options will continue
to vest as described in the preceding paragraph. If Mr. Newman resigns without
Good Reason or if the Company terminates his employment for Cause or if Mr.
Newman elects not to renew the Newman Term, the Company will pay Mr. Newman his
full salary through the date of termination and any unvested restricted shares
and options will be forfeited. In the event of Mr. Newman's termination due to
his death or disability, Mr. Newman will be entitled to any payments due to him
through the date of his death or termination due to disability including a
payment of a pro-rata portion of his annual incentive bonus for the year of
termination. In the event of Mr. Newman's death or termination due to
disability, any unvested restricted shares and options held by him will vest.

Pursuant to the Newman Amendment, Mr. Newman may not compete with the
Company during the term of Mr. Newman's employment. If Mr. Newman resigns his
employment without Good Reason, then he cannot compete with the Company in
violation of the Newman Agreement and Newman Amendment for the later of (i) five
years from the date of the commencement of the Offerings and (ii) two years
after his employment ends. If Mr. Newman resigns for Good Reason or the Company
terminates his employment without Cause, then he cannot compete with the Company

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for two years from the date of termination of his employment. If Mr. Newman's
employment is terminated for Cause, the Company may elect to prohibit Mr. Newman
from competing with the Company for up to two years in consideration for the
payment of an amount equal to Mr. Newman's base salary and bonus (equal to the
average annual incentive bonus over the preceding two years) for each year that
Mr. Newman is prohibited from competing with the Company.

EMPLOYMENT AGREEMENTS WITH OTHER EXECUTIVES. The Company has entered into
employment agreements with each of Messrs. Idol and Isham and Ms. Sterling Udell
as well as certain other executives of the Company (the "Employment
Agreements").

The Employment Agreements provide that the Company will pay the executive
an annual salary determined by the Board of Directors and a bonus or incentive
compensation in any fiscal year as determined by the Board in its discretion.
The Employment Agreements have an indefinite term and generally provide that if
the executive resigns for "good reason" or if his or her employment is
terminated by the Company, other than because of death, disability or "cause,"
the executive is entitled to the following severance payments so long as the
executive complies with certain non-compete covenants: (i) continued salary
payments (less applicable withholdings) for a period of 36 months, (ii) with
respect to Messrs. Idol and Isham, payments (less applicable withholdings), in
the manner then in effect and through the end of the then current fiscal year,
of any incentive or bonus program in effect for the executive on the date his
employment was terminated, and thereafter through the end of the 36 month
post-termination period, a monthly payment equal to one-twelfth of the yearly
average incentive or bonus compensation earned during such current fiscal year
and/or based on prior periods, (iii) continued participation in the Company's
health benefit plans, provided that if the executive is provided with similar
coverage by a subsequent employer, any such coverage by the Company will cease,
(iv) continued use of the Company automobile leased for the executive's use
until the then existing auto lease term expires, and (v) waiver of the
collateral interest securing return to the Company of premiums paid by the
Company for the executive's existing split dollar insurance policy. If a change
of control of the Company occurs prior to the executive's termination of
employment, then the executive will be entitled to elect to receive the cash
severance payments described above in two equal lump sum installments payable
within 30 days after the date of termination and one year after the date of
termination, respectively.

Generally, the executive's entitlement to severance payments are
conditioned upon their compliance with the following non-compete covenants: (i)
the executive agrees not to accept other employment during his or her term of
employment without the written approval of the Board, (ii) the executive agrees
that for the duration of his or her employment and for a period of 36 months
from the date of termination, the executive will not, on his or her own behalf
or any other person or entity, hire, solicit or encourage any employee of the
Company to leave the employ of the Company, and (iii) the executive agrees that
for the duration of his or her employment and for a period of 36 months from the
date of termination, the executive will take no action which is intended, or
would be reasonably expected, to harm (e.g., making public derogatory statements
or misusing confidential Company information) the Company or its reputation.

1997 STOCK INCENTIVE PLAN

Prior to the Offerings, the Board of Directors of the Company (the "Board")
adopted, and the Company's stockholders approved, the Company's 1997 Long-Term
Stock Incentive Plan (the "1997 Stock Incentive Plan"). The purpose of the 1997
Stock Incentive Plan is to promote the interests of the Company and its
stockholders by (i) attracting and retaining exceptional officers and other
employees, directors and consultants of the Company and its subsidiaries; (ii)
motivating such individuals by means of performance-related incentives to
achieve longer-range performance goals; and (iii) enabling such individuals to
participate in the long-term growth and financial success of the Company. The
principal provisions of the 1997 Stock Incentive Plan are summarized below. This
summary, however, does not purport to be complete and is qualified in its
entirety by the terms of the 1997 Stock Incentive Plan which has been filed as
an exhibit to the Registration Statement of which this Prospectus is a part.

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The 1997 Stock Incentive Plan will be administered by a committee (the
"Stock Plan Committee") which will either be the full Board or a committee of
two or more members of the Board designated by the Board to administer the 1997
Stock Incentive Plan, each of whom is expected, but not required, to be a
"Non-Employee Director" (within the meaning of Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) and an
"outside director" (within the meaning of section 162(m) of the Code), to the
extent Rule 16b-3 and section 162(m), respectively, are applicable to the
Company and the 1997 Stock Incentive Plan; provided, that the Stock Plan
Committee may delegate to one or more officers of the Company the authority to
grant awards to participants who are not officers or directors of the Company
subject to Section 16 of the Exchange Act or "covered employees" within the
meaning of Code section 162(m). The mere fact that a Stock Plan Committee member
fails to qualify as a Non-Employee Director or outside director (within the
meaning of Rule 16b-3) will not invalidate any award made by the Stock Plan
Committee which award is otherwise validly made under the 1997 Stock Incentive
Plan.

Any officer or other employee, consultant to, or director of the Company or
any of its subsidiaries will be eligible to be designated a participant under
the 1997 Stock Incentive Plan. It is anticipated that, other than grants made in
connection with the Offerings, grants will be made under the 1997 Stock
Incentive Plan only to officers and other key employees, directors and
consultants of the Company or any of its subsidiaries.

As of May 21, 1997, the Company and its subsidiaries had approximately
5,000 employees, consultants and directors, who will be eligible to be granted
awards by the Stock Plan Committee under the 1997 Stock Incentive Plan. The
Stock Plan Committee has the sole and complete authority to determine the
participants to whom awards will be granted under the 1997 Stock Incentive Plan.

The 1997 Stock Incentive Plan authorizes the grant of awards to
participants with respect to a maximum of 10,000,000 shares of the Company's
Class A Common Stock (the "Shares"), subject to adjustment to avoid dilution or
enlargement of intended benefits in the event of certain significant corporate
events, which awards may be made in the form of (i) nonqualified stock options;
(ii) stock options intended to qualify as incentive stock options under section
422 of the Code; (iii) stock appreciation rights; (iv) restricted stock and/or
restricted stock units; (v) performance awards and (vi) other stock based
awards; provided, that the maximum number of Shares with respect to which stock
options and stock appreciation rights may be granted to any participant in the
1997 Stock Incentive Plan in any fiscal year may not exceed 600,000 and the
maximum number of Shares which may be paid to a participant in the 1997 Stock
Incentive Plan in connection with the settlement of any award(s) designated as a
Performance Compensation Award (as defined in the 1997 Stock Incentive Plan) in
respect of a single performance period will be 600,000 or, in the event such
Performance Compensation Award is paid in cash, the equivalent cash value
thereof. If, after the effective date of the 1997 Stock Incentive Plan, any
Shares covered by an award granted under the 1997 Stock Incentive Plan, or to
which such an award relates, are forfeited, or if an award has expired,
terminated or been canceled for any reason whatsoever (other than by reason of
exercise or vesting), then the Shares covered by such award will again be, or
will become, Shares with respect to which awards may be granted under the 1997
Stock Incentive Plan.

Awards made under the 1997 Stock Incentive Plan will be subject to such
terms, including vesting and exercise price, if applicable, as may be determined
by the Stock Plan Committee and specified in the applicable award agreement or
thereafter; provided, that stock options that are intended to qualify as
incentive stock options will be subject to terms and conditions that comply with
such rules as may be prescribed by section 422 of the Code. Payment in respect
of the exercise of an option granted under the 1997 Stock Incentive Plan may be
made in cash, or its equivalent (or, if so determined by the Stock Plan
Committee, with the proceeds of a loan advanced by the Company for purposes of
paying the exercise price), or (i) by exchanging shares owned by the optionee
(which are not the subject of any pledge or other security interest and which
have been owned by such optionee for at least six months) or (ii) subject to
such rules as may be established by the Stock Plan Committee, through delivery
of irrevocable instructions to a broker to sell the

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shares being acquired upon exercise of the option and to deliver promptly to the
Company an amount equal to the aggregate exercise price, or by a combination of
the foregoing, provided that the combined value of all cash and cash equivalents
and the fair market value of such shares so tendered to the Company as of the
date of such tender is at least equal to the aggregate exercise price of the
option.

In addition to the foregoing, the Stock Plan Committee will have the
discretion to designate any award as a Performance Compensation Award. While
awards in the form of stock options and stock appreciation rights are intended
to qualify as "performance-based compensation" under section 162(m) of the Code
provided that the exercise price or grant price, as the case may be, is
established by the Stock Plan Committee to be equal to the Fair Market Value (as
defined in the 1997 Stock Incentive Plan) per Share as of the date of grant,
this form of award enables the Stock Plan Committee to treat certain other
awards (including stock options and stock appreciation rights with an exercise
price less than Fair Market Value) under the 1997 Stock Incentive Plan as
"performance-based compensation" and thus preserve deductibility by the Company
for Federal income tax purposes of such awards which are made to individuals who
are "covered employees" as defined in section 162(m) of the Code.

Each Performance Compensation Award will be payable only upon achievement
over a specified performance period of a duration of at least one year of a
pre-established objective performance goal established by the Stock Plan
Committee for such period. The Stock Plan Committee may designate one or more
performance criteria for purposes of establishing a performance goal with
respect to Performance Compensation Awards made under the 1997 Stock Incentive
Plan. The performance criteria that will be used to establish such performance
goals will be based on the attainment of specific levels of performance of the
Company (or subsidiary, affiliate, division or operational unit in the Company)
and will be limited to the following: return on net assets, return on
stockholders' equity, return on assets, return on capital, stockholder returns,
profit margin, earnings per share, net earnings, operating earnings, price per
share, earnings before interest and taxes and sales or market share.

With regard to a particular performance period, the Stock Plan Committee
will have the discretion, subject to the 1997 Stock Incentive Plan's terms, to
select the length of the performance period, the type(s) of Performance
Compensation Award(s) to be issued, the performance goals that will be used to
measure performance for the period and the performance formula that will be used
to determine what portion, if any, of the Performance Compensation Award has
been earned for the period. Such discretion will be exercised by the Stock Plan
Committee in writing no later than 90 days after the commencement of the
performance period and performance for the period shall be measured and
certified by the Stock Plan Committee upon the period's close. In determining
entitlement to payment in respect of a Performance Compensation Award, the Stock
Plan Committee may through use of negative discretion reduce or eliminate such
award, provided such discretion is permitted under section 162(m) of the Code.

Each award, and each right under any award, will be exercisable only by the
participant during the participant's lifetime, or, if permissible under
applicable law, by the participant's guardian or legal representative and no
award may be assigned, alienated, pledged, attached, sold or otherwise
transferred or encumbered by a participant otherwise than by will or by the laws
of descent and distribution and any such purported assignment, alienation,
pledge, attachment, sale, transfer or encumbrance will be void and unenforceable
against the Company or any affiliate; provided, that the designation of a
beneficiary will not constitute an assignment, alienation, pledge, attachment,
sale, transfer or encumbrance. Notwithstanding the foregoing, the Stock Plan
Committee has the discretion under the 1997 Stock Incentive Plan to provide that
options granted under the 1997 Stock Incentive Plan that are not intended to
qualify as incentive stock options may be transferred without consideration to
certain family members or trusts, partnerships or limited liability companies
whose only beneficiaries or partners are the original grantee and/or such family
members.

In the event of a "change of control" (as defined in the 1997 Stock
Incentive Plan) any outstanding awards then held by participants which are
unexercisable or otherwise unvested will

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automatically be deemed exercisable or otherwise vested, as the case may be, as
of immediately prior to such change of control.

The Board may amend, alter, suspend, discontinue, or terminate the 1997
Stock Incentive Plan or any portion thereof at any time; provided, that no such
amendment, alteration, suspension, discontinuation or termination (i) will be
made without stockholder approval if such approval is necessary to comply with
any tax or regulatory requirement, and (ii) may adversely affect the rights of
any participant with respect to awards previously granted under the 1997 Stock
Incentive Plan without such participant's consent.

It is currently anticipated that simultaneously with the commencement of
the Offerings, awards under the 1997 Stock Incentive Plan in the form of
nonqualified stock options (the "Options") representing the right to acquire an
aggregate of approximately 4,200,000 Shares at an exercise price equal to the
initial public offering price per Share will be granted, where permitted by
applicable law, to all active full-time employees (including those on authorized
short-term leave of absence) of the Company and its subsidiaries and all
part-time employees who have been employed by the Company or its subsidiaries
for at least one year at the time of commencement of the Offerings, including
without limitation, the Company's Chief Executive Officer and other Executive
Officers described under "-- Directors and Executive Officers". Of such option
grants, it is anticipated that options to acquire 1,437,000 Shares will be
granted to all executive officers as a group, including options to acquire
500,000, 350,000, 100,000, 100,000 and 100,000 Shares to Messrs. Lauren, Newman,
Idol, Isham and Ms. Sterling Udell, respectively.

In addition, pursuant to the Newman Agreement, Mr. Newman was awarded
76,923 restricted shares under the 1997 Stock Incentive Plan simultaneous with
the commencement of the Offerings.

After giving effect to the grant of options and restricted shares described
above, in the future the Stock Plan Committee would be authorized to grant an
aggregate of approximately 5,714,894 Shares in the form of awards permitted
under the 1997 Stock Incentive Plan.

1997 NON-EMPLOYEE DIRECTOR OPTION PLAN

Prior to the Offerings, the Company's 1997 Stock Option Plan for
Non-Employee Directors (the "1997 Non-Employee Director Option Plan") was
adopted by action of the Company's Board of Directors. A maximum of 500,000
shares of Class A Common Stock, subject to adjustment to avoid dilution or
enlargement of intended benefits in the event of certain significant corporate
events, has been reserved by the Company for issuance pursuant to options under
the 1997 Non-Employee Director Option Plan. The principal provisions of the 1997
Non-Employee Director Option Plan are summarized below. This summary, however,
does not purport to be complete and is qualified in its entirety by the terms of
the 1997 Non-Employee Director Option Plan which has been filed as an exhibit to
the Registration Statement of which this Prospectus is a part.

Eligible persons under the plan are directors of the Company who are not
employees of the Company or any affiliate of the Company ("Outside Directors").
As of the date of the Plan's adoption, there were no Outside Directors. However,
the Company expects that the three directors appointed following the completion
of the Offerings will be Outside Directors. The 1997 Non-Employee Director
Option Plan is intended to be a largely self-governing formula plan. To the
extent, if any, that questions of administration arise, these shall be resolved
by the Board of Directors of the Company.

After the completion of the Offerings, each person who is an Outside
Director as of April 1 of each calendar year during the term of the 1997
Non-Employee Director Option Plan and who first became a Director prior to
October 1 of the preceding year will receive an option to purchase 3,000 shares
of Class A Common Stock as of such date; and (ii) each Person who first becomes
an elected director after the effective date of the Offerings will receive an
option to purchase 7,500 shares of Class A Common Stock on the date of their
initial election. All options granted under the

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1997 Non-Employee Director Option Plan will be "nonqualified" stock options
subject to the provisions of section 83 of the Code.

Options will vest and become exercisable with respect to 50% of the shares
initially subject to the options on each of the first and second anniversaries
of the date of grant subject to an outside Director's continued service as a
Director of the Company, and will terminate on the earliest of the following:
(a) the expiration of ten years from the date of grant; and (b) the expiration
of two years from the date the optionee's service as an Outside Director
terminates for any reason.

The exercise price per share of Class A Common Stock purchasable under all
options granted under the 1997 Non-Employee Director Option Plan will be the
Fair Market Value (as defined in the 1997 Non-Employee Director Option Plan) of
a share of Class A Common Stock on the date the option is granted. Payment in
respect of the exercise of an option granted under the 1997 Non-Employee
Director Option Plan may be made in cash, or its equivalent (or if so determined
by the Board of Directors, with the proceeds of a loan advanced by the Company
for the purposes of paying the exercise price) or (i) by exchanging shares owned
by the Outside Director (which are not the subject of any pledge or other
security interest and which have been owned by such Outside Director for at
least six months) or (ii) subject to such rules as may be established by the
Board of Directors, through delivery of irrevocable instructions to a broker to
sell the shares being acquired upon exercise of the option and to deliver
promptly to the Company an amount equal to the aggregate exercise price, or by a
combination of the foregoing, provided that the combined value of all cash and
cash equivalents and the fair market value of such shares so tendered to the
Company as of the date of such tender is at least equal to the aggregate
exercise price of the option.

The Company's Board may amend, suspend or discontinue the 1997 Non-Employee
Director Option Plan at any time except that (i) any such amendment will comply
with all applicable laws and stock exchange listing requirements, (ii) any
amendment for which stockholder approval is required by law or in order to
maintain continued qualification of the 1997 Non-Employee Director Option Plan
under any applicable tax or regulatory requirement will not be effective until
such approval has been obtained and (iii) no amendment may adversely affect the
rights of any optionee with respect to options previously awarded under the 1997
Non-Employee Director Option Plan without his or her consent.

Awards may be transferred by a grantee only by will or by the laws of
descent and distribution, and options may be exercised during the optionee's
lifetime only by the optionee.

EXECUTIVE INCENTIVE PLAN

The Company's executive incentive plan (the "Executive Incentive Plan") is
designed to motivate officers and other key employees of the Company to achieve
and exceed the Company's annual strategic goals. Approximately 125 employees are
currently eligible to receive a bonus award pursuant to the Executive Incentive
Plan.

Under the Executive Incentive Plan, each participant is eligible to receive
three levels of incentive bonus (each expressed as a percent of such
participant's annual base salary) according to his or her position in the
Company, if pre-established pre-tax net income objectives of the Company and/or
of the participant's operating division are met. In fiscal 1997, the bonus award
of the Company's Group Presidents and Design Senior Vice Presidents pursuant to
the Executive Incentive Plan was based 50% on the satisfaction of pre-tax income
objectives for the Company as a whole and 50% on the satisfaction of pre-tax
income objectives for each such participant's operating division. The bonus
awards of most other participants working in the Company's operating divisions
were based 30% on the satisfaction of pre-tax income objectives for the Company
as a whole and 70% on the satisfaction of pre-tax income objectives for the
participant's operating division. In addition, designated participants working
in centralized Company positions had their bonus determined entirely according
to overall Company performance. In addition to net income goals, each operating
division and centralized group sets three to four other quantitative performance
goals aimed at strengthening fundamental aspects of the business of the Company.
Accomplishment of these objectives can increase the incentive payout of
participants. No payments

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will be made under the Executive Incentive Plan in any fiscal year in which the
Company is not profitable, regardless of the performance of any particular
division.

In fiscal 1997 the maximum bonus payable under the Executive Incentive Plan
as a percent of salary was 100% for the Group Presidents and Design Senior Vice
Presidents, 60% for the Company's Senior Vice Presidents and Divisional
Presidents and 40% or less for all other participants.

PENSION PLANS

POLO RALPH LAUREN PROFIT SHARING RETIREMENT SAVINGS PLAN. The Company
maintains and administers separate employee contribution/profit sharing plans
with substantially identical terms for salaried and hourly employees of the
Company, which are designed to be tax deferred in accordance with the provisions
of Section 401(k) of the Code (the "401K Plan").

All of the Company's employees with at least one year of service are
eligible to participate in the 401K Plan. The 401K Plan provides that each
participant may defer up to 10% of his or her total compensation, subject to
statutory limits. However, "highly compensated employees" may only defer up to
6% of their total compensation, subject to statutory limits. The Company is
obligated to make a matching contribution to the 401K Plan for each participant
equal to $.50 for each $1.00 deferred by the participant, except that no
matching contribution will be made with respect to a participant's contribution
in excess of 6% of his or her compensation. The Company may also make
discretionary contributions to the 401K Plan, allocated among all eligible
employees in proportion to their compensation.

Participants are always 100% vested in their own contributions, and any
investment gains or losses thereon. Company contributions, and any investment
gains or losses thereon, vest 20% following the participant's third year of
service and an additional 20% annually thereafter; provided, however, that the
participant will become 100% vested if he or she dies, becomes disabled or
reaches his or her retirement age. Subject to certain restrictions and tax
consequences, a participant can receive the vested value of his or her 401K Plan
account as a distribution upon leaving the employ of the company, retiring,
becoming disabled or upon his or her death.

DEFERRED COMPENSATION WEALTH ACCUMULATION PLAN. Key employees of the
Company are eligible to participate in the Company's Wealth Accumulation Plan
(the "Wealth Plan"). With respect to each plan year during which the Company
reports a profit on a consolidated basis, the Company will credit a contribution
to each participant's Wealth Plan account equal to 5% of his or her cash
compensation for such plan year, provided that such participant is either
employed by the Company on the last day of such plan year, or has terminated
employment by reason of death, retirement or disability during such plan year.
Generally, the Wealth Plan provides that interest will be credited to each
participant's account at 120% of the average of Moody's Long Term Composite
Corporate Bond Index. However, if a participant suffers a disability or in the
event that the Wealth Plan is terminated by the Company, such participant's
account will be credited with 100% of Moody's Long Term Composite Corporate Bond
Index rate.

All amounts credited to a participant's Wealth Plan account will vest at
the rate of 10% after the first year of participation, an additional 15% after
two years of participation, an additional 20% after three years of
participation, an additional 25% after four years of participation, and an
additional 30% after the completion of five years of participation. In addition,
each participant will be 100% vested upon attainment of age 60, at his or her
death if prior to termination of employment or upon the occurrence of a
disability. If the Wealth Plan is terminated within five years following a
"change of control" of the Company (as defined in the Wealth Plan), each
participant's account will become 100% vested. Moreover, in the event that a
participant is involuntarily terminated within five years of a change of control
of the Company, except for "cause," such participant will be 100% vested and may
receive distributions as if the Wealth Plan had been terminated. Participants
are eligible to receive distributions of the vested amounts in their Wealth Plan
accounts upon retirement or in certain predesignated years. In addition,
participants may receive distributions in case of termination of employment,
death, disability or termination by the Company of the Wealth Plan.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

FORMATION OF PARTNERSHIPS AND REORGANIZATION

In October 1994, in connection with the formation of Enterprises and Polo
LP, the GS Group purchased an aggregate 28.5% limited partnership interest in
Enterprises and an aggregate 0.3986% limited partnership interest in Polo LP for
a purchase price of $128 million. Mr. Lauren, a corporation wholly owned by Mr.
Lauren, and a business associate of Mr. Lauren (collectively, the "RL Partners")
received an aggregate 70.5% limited partnership interest and a 1.0% general
partnership interest in Enterprises and a 1.0% general partnership interest in
Polo LP in October 1994. Effective April 1995, Mr. Lauren acquired his business
associate's interests in Enterprises and a predecessor corporate entity. In
October 1995, the GS Group purchased a 0.3986% limited partnership interest in
Womenswear LP. In addition, Mr. Lauren purchased indirectly, through PRLW, a
1.0% general partnership interest in Womenswear LP in October 1995. The GS Group
received aggregate partner distributions of $1.7 million, $18.8 million and
$19.3 million from the Operating Partnerships in fiscal 1995, fiscal 1996 and
fiscal 1997, respectively. The RL Partners and PRLW received aggregate
distributions of $134.1 million (including distributions from a predecessor
corporate entity), $41.1 million and $47.3 million from the Operating
Partnerships in fiscal 1995, fiscal 1996 and fiscal 1997, respectively.

In May 1997, a corporation wholly owned by Mr. Lauren through which he held
certain interests in Enterprises and Polo LP merged into the Company, a newly
formed entity also wholly owned by Mr. Lauren, in exchange for shares of Class B
Common Stock. Prior to the commencement of the Offerings, the GS Group will
contribute their remaining interests in the Operating Partnerships to the
Company either directly or indirectly by merger into the Company in exchange for
24,920,979 shares of Class C Common Stock and the Reorganization Notes.
Simultaneous with such contribution by the GS Group, Mr. Lauren, Family LP and
Holding LP will contribute their remaining interests, as applicable, in the
Operating Partnerships, RL Fragrances and PRLW in exchange for 19,408,079 shares
of Class B Common Stock (not including 44,670,942 shares of Class B Common Stock
owned prior to the Reorganization) and the Reorganization Notes. See
"Reorganization and Related Transactions".

At the time of the formation of Enterprises and Polo LP, each of the GS
Group and the RL Partners entered into a formation agreement and partnership
agreements governing the terms of the Operating Partnerships. Upon completion of
the Reorganization, those agreements will no longer be effective because
Enterprises LP and Polo LP will dissolve by operation of law. Similarly, in
October 1995, the GS Group, Enterprises and PRLW entered into a partnership
agreement governing Womenswear LP. Upon completion of the Reorganization, that
agreement will be substantially amended and restated as Womenswear LP will
become wholly owned, directly or indirectly, by the Company upon completion of
the Reorganization. In addition, at the time of the formation of Enterprises and
Polo LP, each of the GS Group and Mr. Lauren made loans to Enterprises in the
aggregate principal amount of $7 million and $17 million, respectively. The
Company believes the Subordinated Notes are on terms as favorable as could have
been obtained from disinterested third parties. The Subordinated Notes bear
interest at the prime rate, and interest is payable quarterly. The Subordinated
Notes mature on March 1, 2001. The Company will use a portion of the net
proceeds of the Offerings to prepay the Subordinated Notes. See "Use of
Proceeds".

POLO RETAIL CORPORATION

On March 21, 1997, the Company and its subsidiary, Polo Ralph Lauren Retail
Corp ("PRL Retail") entered into negotiated, arms-length purchase agreements
with Mr. David Hare, who has since become an executive officer of the Company,
Mr. William G. Merriken (an employee of PRC)

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and Franklin Retail Corporation for the acquisition of the 50% interest in PRC
not already owned by PRL Retail. The aggregate consideration to be paid is $10.0
million, of which $8.3 million was paid in cash on April 3, 1997, $1.0 million
was paid in cash on May 15, 1997 and $0.3 million was paid in cash on June 3,
1997. The remaining $0.4 million will be paid concurrent with the closing of the
Offerings in 15,385 shares of Class A Common Stock.

Also on March 21, 1997, the Company and PRL Retail entered into a
negotiated arms-length purchase agreement and three assignment and assumption
agreements with third parties including Mr. John Slater (an employee of a
subsidiary of PRC), to acquire a minority interest and three limited partnership
interests in Perkins Shearer Polo Ltd. and San Francisco Polo Ltd.,
respectively, both of which are subsidiaries of PRC that will now be wholly
owned. The aggregate consideration for such acquisitions is $0.4 million, of
which $0.1 million was paid in cash on April 3, 1997. The remaining $0.3 million
will be paid concurrently with the closing of the Offerings in 11,538 shares of
Class A Common Stock.

REGISTRATION RIGHTS AGREEMENTS

Certain of the Lauren Family Members, the GS Group and the Company will
enter into a Registration Rights Agreement (the "Registration Rights Agreement")
prior to the consummation of the Offerings, pursuant to which each of the Lauren
Family Members and GS Group will be granted certain demand registration rights
in respect of shares of Class A Common Stock (including Class A Common Stock
issued upon conversion of Class B Common Stock and Class C Common Stock, as the
case may be, held by them). With respect to the demand rights of the Lauren
Family Members, the Lauren Family Members may make a demand once every nine
months. With respect to the demand rights of the GS Group, the GS Group may make
a demand once every nine months so long as the GS Group owns at least 10% of the
Common Stock outstanding. Once its ownership of the Common Stock is less than
10% of the outstanding shares of Common Stock, the GS Group may make one
additional demand; provided, however, that if the sale of Class A Common Stock
pursuant to such demand registration does not result in the GS Group owning less
than 5% of the Common Stock due to a cutback in the number of shares that it may
include in such registration, such demand will not count as its one demand. In
the case of each demand registration, at least $20 million of Class A Common
Stock must be requested to be registered. The Lauren Family Members and the GS
Group also will have an unlimited number of piggyback registration rights in
respect of their shares. The piggyback registration rights will allow the
holders to include all or a portion of the shares of Class A Common Stock
issuable upon conversion of their shares of Class B Common Stock and Class C
Common Stock, as the case may be, under any registration statement filed by the
Company, subject to certain limitations. The Offerings do not constitute a
demand under the Registration Rights Agreement.

The Company will pay all expenses (other than underwriting discounts and
commissions of the selling stockholders and taxes payable by the selling
stockholders) in connection with any demand registration, as well as any
registration pursuant to the exercise of piggyback rights. The Company also will
agree to indemnify such persons and any underwriters against certain
liabilities, including liabilities arising under the Securities Act. The Lauren
Family Members and the GS Group have agreed not to exercise their registration
rights without the prior written consent of Goldman, Sachs & Co. on behalf of
the Underwriters for a period of 180 days following the date of this Prospectus.

TRADEMARK ACQUISITION

Simultaneous with the closing of the Reorganization, the Company will
acquire certain assets from Family LP pursuant to the Trademark Acquisition. See
"Reorganization and Related Transactions -- Trademark Acquisition". Mr. Lauren
is the sole general partner of Family LP. The terms of the Trademark Acquisition
were negotiated on an arms-length basis between the parties, including

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the partners of the Operating Partnerships, and the Company believes that the
terms of the Trademark Acquisition were as favorable as could have been obtained
from unaffiliated third parties.

OTHER AGREEMENTS, TRANSACTIONS AND RELATIONSHIPS

In connection with the Reorganization, the stockholders of the Company and
the Company will enter into a stockholders' agreement (the "Stockholders'
Agreement") which will set forth certain voting and other agreements for the
period prior to completion of the Offerings. All of the provisions of the
Stockholders' Agreement will terminate upon completion of the Offerings except
for certain provisions relating to certain tax matters with respect to the
Operating Partnerships, certain restrictions on transfers of shares of Common
Stock and indemnification and exculpation provisions.

Shortly following completion of the Offerings, the Company expects to enter
into indemnification agreements with each of its directors and executive
officers. The indemnification agreements will require, among other things, that
the Company indemnify its directors and executive officers against certain
liabilities and associated expenses arising from their service as directors and
executive officers of the Company and reimburse certain related legal and other
expenses. In the event of a change of control (as defined therein), the Company
will, upon request by an indemnitee under the agreements, create and fund a
trust for the benefit of such indemnitee sufficient to satisfy reasonably
anticipated claims for indemnification.

Pursuant to his employment agreement with the Company, for security
purposes, Mr. Lauren and his family members are required to use the Company's or
other acceptable private aircraft for any travel. Mr. Lauren reimburses the
Company for personal use at swap rates charged to owners of airplanes, which
rates are set by an independent aircraft management company. The Company
believes that swap rates generally are lower than commercial charter rates for
flights to similar destinations. Amounts reimbursed to the Company by Mr. Lauren
for personal use of the Company's airplane in fiscal 1995, fiscal 1996 and
fiscal 1997 were approximately $296,000, $356,000 and $398,000, respectively. In
addition, five employees of the Company perform services for Mr. Lauren which
are non-Company related; four employees carry out domestic activities in Mr.
Lauren's household and one employee works in an administrative assistant
capacity. Mr. Lauren reimburses the Company for the full amount of the salary,
benefits and other expenses relating to such employees. Pursuant to his
employment agreement with the Company, Mr. Lauren will continue to be entitled
to have such employees perform such services provided he reimburses the Company
for the full amount of salary, benefits and other expenses relating to such
employees. Amounts reimbursed to the Company by Mr. Lauren for his use of
Company employees for non-Company related services in fiscal 1995, fiscal 1996
and fiscal 1997 were approximately $377,000, $326,000 and $321,000,
respectively. In connection with the adoption of the "RRL" trademarks by the
Company, pursuant to an agreement with the Company, Mr. 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 addition, Mr. Lauren engages in personal
projects involving non-Company related film or theatrical productions through
RRL Productions, Inc., a Company wholly owned by Mr. Lauren. The Company pays
the premiums on split-dollar life insurance policies on the lives of Mr. Lauren
and his spouse. See "Management -- Executive Compensation -- Summary
Compensation Table".

Mr. John Idol's brother-in-law owns 25% of RJS Scientific, Inc., which is
one of the Company's Home Collection licensing partners. The Company believes
the terms of its license agreement with RJS Scientific, Inc. are no less
favorable to the Company than could be obtained from unaffiliated parties. See
"Business -- Operations -- Home Collection".

In March 1994, the Company loaned Ms. Cheryl Sterling Udell the sum of
$250,000 at an annual interest rate of prime plus 0.5% for a use unrelated to
the Company. The loan was repaid in full in February 1997. The Company believes
that the terms of this loan were more favorable than Ms. Sterling Udell might
have obtained from disinterested third parties.

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Mr. David Hare is one of three partners of Action Leasing and
Development -- Cherry Creek, a Colorado general partnership ("Action Leasing")
which owns a building and property located in Denver, Colorado which it
previously leased to Perkins Shearer of Colorado, Inc., a subsidiary of PRC.
Perkins Shearer of Colorado, Inc. is the guarantor of lease payments by the
current tenant of such building to Action Leasing and is obligated to purchase
the building and property from Action Leasing for approximately $900,000 on July
1, 2001.

Mr. Jerome Lauren, the Executive Vice President of Menswear Design of the
Company, is Mr. Ralph Lauren's brother.

The GS Group owns (on a fully diluted basis) 34.7% of Koret, Inc., the
parent of New Campaign, Inc., the Company's licensing partner for small leather
goods and accessories. The Company believes that the terms of its arrangements
with New Campaign, Inc. are no less favorable to the Company than could be
obtained from unaffiliated parties.

On August 4, 1995, the Company entered into a forward foreign exchange
contract with Goldman, Sachs & Co. as a hedge relating to foreign licensing
revenue to deliver 593 million yen on April 17, 1996 in exchange for
approximately $6,719,000. On April 24, 1996, the Company entered into forward
foreign exchange contracts with Goldman, Sachs & Co. as hedges relating to
foreign licensing revenue to deliver 800 million yen on October 15, 1996 in
exchange for $7,661,000, and to deliver 825 million yen on April 15, 1997 in
exchange for approximately $8,083,000. On May 16, 1997, the Company entered into
two forward foreign exchange contracts with Goldman, Sachs & Co. as a hedge
relating to foreign licensing revenue to deliver 900 million yen on October 15,
1997 and 1.0 billion yen on April 15, 1998 in exchange for approximately
$7,951,000 and approximately $9,070,000, respectively. Goldman, Sachs & Co.
received customary fees for each of these forward foreign exchange contracts.

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PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth, giving effect to the Reorganization and the
Trademark Acquisition, the total number of shares of Common Stock of the Company
beneficially owned, and the percent so owned, by (i) each stockholder who is
known by the Company to beneficially own in excess of five percent of any class
of the Company's voting securities, (ii) each director, (iii) each of the Named
Executive Officers and (iv) all directors and executive officers as a group.
Except as otherwise indicated, each stockholder listed below has sole voting and
investment power with respect to shares beneficially owned by such person. As
described in the notes to the table, voting power with respect to certain shares
of Class A Common Stock is shared by the named individuals. Consequently, such
shares are shown as beneficially owned by more than one person.

CLASS B COMMON STOCK
--------------------------------------------
CLASS A COMMON STOCK(1) TO BE SOLD
----------------------------------------- IN THE
OFFERINGS
OWNED PRIOR TO BE SOLD TO BE OWNED OWNED PRIOR AS CLASS A TO BE OWNED
TO THE IN THE AFTER THE TO THE COMMON AFTER THE
OFFERINGS OFFERINGS OFFERINGS OFFERINGS STOCK(2) OFFERINGS
DIRECTORS, EXECUTIVE OFFICERS --------------- ---------- ------------ --------------- ---------- ---------------
AND 5% STOCKHOLDERS NUMBER % NUMBER NUMBER % NUMBER % NUMBER NUMBER %
- ------------------------------------------ ---------- --- ---------- ------- --- ---------- --- ---------- ---------- ---

Mr. Ralph Lauren(3)(4).................... 13,500,000 98 13,500,000 500,000 * 50,335,021 100 4,400,000 45,935,021 100
Robert F. Greenhill, as trustee(4)........ 13,500,000 98 13,500,000 -- -- -- -- -- -- --
RL Holding, L.P.(5)....................... -- -- -- -- -- 13,383,482 26.6 -- 13,383,482 29.1
The Goldman Sachs Group, L.P.(6).......... -- -- -- -- -- -- -- -- -- --
Michael J. Newman(7)...................... -- -- -- 85,106 * -- -- -- -- --
John D. Idol(8)........................... -- -- -- -- -- -- -- -- -- --
F. Lance Isham(8)......................... -- -- -- -- -- -- -- -- -- --
Cheryl L. Sterling Udell(8)............... -- -- -- -- -- -- -- -- -- --
Richard A. Friedman(9).................... -- -- -- -- -- -- -- -- -- --
All directors and executive officers as a
group (11 persons)(3)(7)(8)(9)........... 13,500,000 98 13,500,000 585,106 -- 50,335,021 100 4,400,000 45,935,021 100

CLASS C COMMON STOCK
-------------------------------------------- TOTAL
TO BE COMMON
SOLD STOCK
IN THE ---------
OFFERINGS
AS CLASS VOTING
OWNED PRIOR A TO BE OWNED POWER
TO THE COMMON AFTER THE AFTER THE
OFFERINGS STOCK(2) OFFERINGS OFFERINGS
DIRECTORS, EXECUTIVE OFFICERS --------------- --------- ---------------- ---------
AND 5% STOCKHOLDERS NUMBER % NUMBER NUMBER % %
- ------------------------------------------ ---------- --- --------- ----------- ---- ---------

Mr. Ralph Lauren(3)(4).................... -- -- -- -- -- 89.8
Robert F. Greenhill, as trustee(4)........ -- -- -- -- -- --
RL Holding, L.P.(5)....................... -- -- -- -- -- 26.1
The Goldman Sachs Group, L.P.(6).......... 24,920,979 100 2,200,000 22,720,979 100 4.4
Michael J. Newman(7)...................... -- -- -- -- -- *
John D. Idol(8)........................... -- -- -- -- -- --
F. Lance Isham(8)......................... -- -- -- -- -- --
Cheryl L. Sterling Udell(8)............... -- -- -- -- -- --
Richard A. Friedman(9).................... -- -- -- -- -- --
All directors and executive officers as a
group (11 persons)(3)(7)(8)(9)........... -- -- -- -- -- 89.8

- ---------------

* Less than 1.0%

(1) Each share of Class B Common Stock and Class C Common Stock is convertible
at the option of the holder into one share of Class A Common Stock. The
number of shares of Class A Common Stock and percentages contained under
this heading do not account for such conversion rights. See "Description of
Capital Stock".

(2) Immediately prior to the Offerings, such shares of Class B Common Stock and
Class C Common Stock will be converted into an equal number of shares of
Class A Common Stock for sale in the Offerings.

(3) Includes 1,557,503 shares of Class B Common Stock owned by RL Family, L.P.,
a partnership of which Mr. Lauren is the sole general partner and 13,383,482
shares of Class B Common Stock owned by RL Holding, L.P., a partnership
controlled by RL Holding Group, Inc, a corporation wholly owned by Mr.
Lauren. If the Underwriters' overallotment options are exercised in full,
Mr. Lauren will sell an additional 2,655,000 shares of Class A Common Stock
that will be issued to him upon his conversion of an equal number of shares
of Class B Common Stock and will own 43,280,021 shares of Class B Common
Stock (100%) and have 84.6% of the total voting power of the Common Stock
after the Offerings. Includes options to be granted simultaneous with the
Offerings to Mr. Lauren under the 1997 Stock Incentive Plan representing the
right to acquire 500,000 shares of Class A Common Stock, which options vest
immediately upon the grant thereof. The address of Mr. Lauren is 650 Madison
Avenue, New York, New York, 10022.

(4) Mr. Lauren and Robert F. Greenhill act as trustees of the Ralph Lauren 1997
Charitable Remainder Unitrust under an agreement dated June 1, 1997 (the
"Trust Agreement"), and as such possess joint voting control over the
13,500,000 shares of Class A Common Stock owned by the trust prior to the
Offerings. However, pursuant to the terms of the Trust Agreement, Mr.
Greenhill, as independent trustee, has the sole right to sell such shares.
The address of Mr. Greenhill is 31 West 52nd Street, New York, New York,
10101.

(5) RL Holding, L.P. is a partnership controlled by RL Holding Group, Inc., a
corporation wholly owned by Mr. Lauren.

(6) Represents 24,920,979 shares owned by certain investment funds affiliated
with The Goldman Sachs Group, L.P. ("Goldman Sachs"). Includes 23,536,494
shares beneficially owned by GS Capital Partners, L.P.; 708,174 shares
beneficially owned by Bridge Street Fund 1994, L.P.; and 676,311 shares
beneficially owned by Stone Street Fund 1994, L.P. Goldman Sachs disclaims
beneficial ownership of the shares owned by such investment funds to the
extent attributable to equity interests therein held by persons other than
Goldman Sachs and its affiliates. Each of such funds shares voting and
investment power with certain of its respective affiliates. The address of
Goldman Sachs is 85 Broad Street, New York, New York 10004.

(7) Does not include options representing the right to acquire 350,000 shares of
Class A Common Stock to be granted upon commencement of the Offerings to Mr.
Newman under the 1997 Stock Incentive Plan. Includes 76,923 restricted
shares granted upon commencement of the Offerings to Mr. Newman under the
1997 Stock Incentive Plan. Mr. Newman's restricted shares will vest
immediately with respect to one third of his shares, and will vest ratably
with respect to the remaining shares on each of the second and third
anniversaries of the commencement of the Offerings. All of Mr. Newman's
options will vest ratably over three years on each of the first three
anniversaries of the date of the grant.

(8) Does not include options to be granted simultaneous with the Offerings to
Ms. Sterling Udell, and Messrs. Idol and Isham and to all directors and
executive officers as a group under the 1997 Stock Incentive Plan and the
1997 Non-Employee Director Option Plan representing the right to acquire
100,000, 100,000, 100,000 and 1,437,000 shares of Class A Common Stock,
respectively.

(9) Mr. Friedman, who is a Managing Director of Goldman, Sachs & Co., disclaims
beneficial ownership of the shares owned by the GS Group, except to the
extent of his pecuniary interest therein.

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DESCRIPTION OF CAPITAL STOCK

As of the date of this Prospectus, the authorized capital stock of the
Company consists of 500,000,000 shares of Class A Common Stock, 100,000,000
shares of Class B Common Stock, 70,000,000 shares of Class C Common Stock and
30,000,000 shares of Preferred Stock, par value $.01 per share (the "Preferred
Stock"). As of the date of this Prospectus, there are 50,335,021 shares of Class
B Common Stock outstanding, all of which are held of record by the Lauren Family
Members and 24,920,979 shares of Class C Common Stock outstanding, all of which
are held by the GS Group. See "Reorganization and Related Transactions" and
"Principal and Selling Stockholders". The following description is a summary and
is subject to and qualified in its entirety by reference to the provisions of
the Amended and Restated Certificate of Incorporation of the Company, the form
of which has been filed as an exhibit to the Registration Statement of which
this Prospectus forms a part.

COMMON STOCK

The shares of Class A Common Stock, Class B Common Stock and Class C Common
Stock are identical in all respects, except for voting rights and certain
conversion rights, transfer restrictions in respect of the shares of the Class B
Common Stock and Class C Common Stock and the right of the holders of Class B
Common Stock and Class C Common Stock to receive the Second Dividend, if any, as
described below. The number of authorized shares of any class or classes of
capital stock of the Company may be increased or decreased (but not below the
number of shares thereof then outstanding) by the affirmative vote of the
holders of a majority of the voting power of the stock of the Company entitled
to vote generally in the election of directors irrespective of the provisions of
Section 242(b)(2) of the General Corporation Law of the State of Delaware (the
"Delaware Law") or any corresponding provision hereinafter enacted.

VOTING RIGHTS. The holders of Class A Common Stock and Class C Common Stock
are entitled to one vote per share. Holders of Class B Common Stock are entitled
to ten votes per share. Holders of all classes of Common Stock entitled to vote
will vote together as a single class on all matters presented to the
stockholders for their vote or approval except for the election and the removal
of directors as described below and as otherwise required by applicable law.
With respect to the election of directors, the Company's Amended and Restated
Certificate of Incorporation provides that the Company's Board of Directors will
have between six and 20 members plus any directors which are entitled to be
elected by any series of Preferred Stock pursuant to the terms thereof (such
directors, the "Preferred Directors"). Initially, the Company's Board of
Directors will have six members (including the three directors to be added after
completion of the Offerings). After this initial selection, four of the
directors will be Class B Directors, one of the directors will be the Class C
Director and one of the directors will be the Class A Director. While shares of
Class A Common Stock, Class B Common Stock and Class C Common Stock are
outstanding and while on the record date of any meeting of stockholders of the
Company, the number of outstanding shares of Class B Common Stock is at least
10% of the number of shares of all classes of Common Stock outstanding
immediately upon the consummation of the Offerings (subject to appropriate
adjustment for stock splits, reverse stock splits, stock dividends and similar
transactions), if the size of the Board (exclusive of Preferred Directors) is
increased, all additional members entitled to be elected by the holders of
Common Stock will be Class B Directors with the following exceptions: (i) an
additional Class A Director will be added if the Board (exclusive of Preferred
Directors) is increased to ten members and again if the Board (exclusive of
Preferred Directors) is increased to 19 members; and (ii) an additional Class C
Director will be added if the Board (exclusive of Preferred Directors) is
increased to 13 members. Under all circumstances, so long as on the record date
of any meeting of stockholders of the Company the number of outstanding shares
of Class C Common Stock is equal to or greater than 10% of the aggregate number
of shares of Common Stock outstanding immediately upon the consummation of the
Offerings (subject to appropriate adjustment for stock splits, reverse stock
splits, stock dividends and similar transactions), then the

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holders of the Class C Common Stock, voting as a separate class, shall be
entitled to elect one Class C Director if the Board (exclusive of Preferred
Directors) consists of less than 13 directors and two Class C Directors if the
Board (exclusive of Preferred Directors) consists of 13 or more directors.
Accordingly, while the number of outstanding shares of Class B Common Stock on
the record date of any meeting of stockholders of the Company is at least 10% of
the aggregate number of shares of Common Stock outstanding immediately upon the
consummation of the Offerings (subject to appropriate adjustment for stock
splits, reverse stock splits, stock dividends and similar transactions), the
holders of Class B Common Stock will elect at least two-thirds of the members of
the Board of Directors entitled to be elected by the holders of Common Stock. If
on the record date for any meeting of stockholders of the Company the number of
outstanding shares of Class B Common Stock is less than 10% of the aggregate
number of shares of Common Stock outstanding immediately upon the consummation
of the Offerings (subject to appropriate adjustment for stock splits, reverse
stock splits, stock dividends and similar transactions) directors that would
have been elected by a separate vote of that class will instead be elected by
the holders of Class A Common Stock and the holders of Class B Common Stock,
voting together, with holders of Class A Common Stock having one vote per share
and holders of Class B Common Stock having ten votes per share. If on the record
date for any meeting of stockholders of the Company the number of outstanding
shares of Class C Common Stock is less than 10% of the aggregate number of
shares of Common Stock outstanding immediately upon the consummation of the
Offerings (subject to appropriate adjustment for stock splits, reverse stock
splits, stock dividends and similar transactions), the Class C Common Stock is
automatically converted into Class A Common Stock and the director or directors
that would have been elected by the holders of the Class C Common Stock will
instead be elected by the holders of Class A Common Stock, voting as a separate
class, or, if on the record date for any meeting of stockholders of the Company
the amount of Class B Common Stock is less than 10% of the aggregate number of
shares of Common Stock outstanding immediately upon the consummation of the
Offerings (subject to appropriate adjustment for stock splits, reverse stock
splits, stock dividends and similar transactions), by the holders of Class A
Common Stock and Class B Common Stock, voting together, with the holders of
Class A Common Stock having one vote per share and the holders of Class B Common
Stock having ten votes per share. Because of the disproportionate voting rights
of the Class B Common Stock, in certain instances holders of Class B Common
Stock will still be able to elect a majority of the Board of Directors entitled
to be elected by the holders of Common Stock when the number of outstanding
shares of Class B Common Stock is less than 10% of the number of shares of all
classes of Common Stock outstanding immediately upon the consummation of the
Offerings (subject to appropriate adjustment for stock splits, reverse stock
splits, stock dividends and similar transactions).See "Risk Factors--Control by
Lauren Family Members and Anti-Takeover Effect of Multiple Classes of Stock".

Directors may be removed, with or without cause, only by the holders of the
class or classes of Common Stock or series of Preferred Stock that, as of the
date such removal is effected, would be entitled to elect such director at the
next annual meeting of stockholders. Vacancies in a directorship may be filled
only by (a) the remaining directors elected by holders of each class of Common
Stock or series of Preferred Stock that (x) elected such director and (y) as of
the date such vacancy is filled, would be entitled to elect such director at the
next annual meeting of the stockholders or, (b) if there are no such remaining
directors, then by the vote of the holders of the class or classes of Common
Stock or series of Preferred Stock that, as of the date such vacancy is filled,
would be entitled to elect such director at the next annual meeting of
stockholders, voting as a separate class at a meeting, special or otherwise, of
the holders of Common Stock of such class or classes or series of Preferred
Stock.

As used in this Prospectus, the term "Lauren Family Members" includes only
the following persons: (i) Ralph Lauren and his estate, guardian, conservator or
committee; (ii) the spouse of Ralph Lauren and her estate, guardian, conservator
or committee; (iii) each descendant of Ralph Lauren (a "Lauren Descendant") and
their respective estates, guardians, conservators or commit-

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tees; (iv) each Family Controlled Entity (as defined below); and (v) the
trustees, in their respective capacities as such, of each Lauren Family Trust
(as defined below). The term "Family Controlled Entity" means (i) any
not-for-profit corporation if at least a majority of its board of directors is
composed of Ralph Lauren, Mr. Lauren's spouse and/or Lauren Descendants; (ii)
any other corporation if at least a majority of the value of its outstanding
equity is owned by Lauren Family Members; (iii) any partnership if at least a
majority of the economic interest of its partnership interests are owned by
Lauren Family Members; and (iv) any limited liability or similar company if at
least a majority of the economic interest of the Company is owned by Lauren
Family Members. The term "Lauren Family Trust" includes trusts the primary
beneficiaries of which are Mr. Lauren, Mr. Lauren's spouse, Lauren Descendants,
Mr. Lauren's siblings, spouses of Lauren Descendants and their respective
estates, guardians, conservator or committees and/or charitable organizations,
provided that if the trust is a wholly charitable trust, at least a majority of
the trustees of such trust consist of Mr. Lauren, the spouse of Mr. Lauren
and/or Lauren Family Members.

DIVIDENDS. Holders of Class A Common Stock, Class B Common Stock and Class
C Common Stock are entitled to receive dividends at the same rate if, as and
when such dividends are declared by the Board out of assets legally available
therefor after payment of dividends required to be paid on shares of Preferred
Stock, if any. The Company may not make any dividend or distribution to any
holder of any class of Common Stock unless simultaneously with such dividend or
distribution the Company makes the same dividend or distribution with respect to
each outstanding share of Common Stock regardless of class. In the case of a
dividend or other distribution payable in shares of a class of Common Stock,
including distributions pursuant to stock splits or divisions of Common Stock,
only shares of Class A Common Stock may be distributed with respect to Class A
Common Stock, only shares of Class B Common Stock may be distributed with
respect to Class B Common Stock and only shares of Class C Common Stock may be
distributed with respect to Class C Common Stock. Whenever a dividend or
distribution, including distributions pursuant to stock splits or divisions of
the Common Stock, is payable in shares of a class of Common Stock, the number of
shares of each class of Common Stock payable per share of such class of Common
Stock shall be equal in number. In the case of dividends or other distributions
consisting of other voting securities of the Company or of voting securities of
any corporation which is a wholly-owned subsidiary of the Company, the Company
shall declare and pay such dividends in three separate classes of such voting
securities, identical in all respects except that (i) the voting rights of each
such security issued to the holders of Class A Common Stock and Class C Common
Stock shall be one-tenth of the voting rights of each such security issued to
holders of Class B Common Stock, (ii) such security issued to holders of Class B
Common Stock shall convert into the security issued to the holders of Class A
Common Stock upon the same terms and conditions applicable to the conversion of
Class B Common Stock into Class A Common Stock and shall have the same
restrictions on transfer and ownership applicable to the transfer and ownership
of the Class B Common Stock, (iii) such security issued to the holders of Class
C Common Stock shall convert into the security issued to holders of Class A
Common Stock upon the same terms and conditions applicable to the conversion of
Class C Common Stock into Class A Common Stock and shall have the same
restrictions on transfer and ownership applicable to the transfer and ownership
of the Class C Common Stock, and (iv) with respect only to dividends or other
distributions of voting securities of any corporation which is a wholly owned
subsidiary of the Company, the respective voting rights of each such security
issued to holders of Class A Common Stock, Class B Common Stock and Class C
Common Stock with respect to election of directors shall otherwise be as
comparable as is practicable to those of the Class A Common Stock, Class B
Common Stock and Class C Common Stock, respectively. In the case of dividends or
other distributions consisting of securities convertible into, or exchangeable
for, voting securities of the Company or of voting securities of any corporation
which is a wholly owned subsidiary of the Company, the Company shall provide
that such convertible or exchangeable securities and the underlying securities
be identical in all respects (including, without limitation, the conversion or
exchange rate) except that the underlying securities may have the same
differences as they would have if the Company issued voting securities of the

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Company or of a wholly owned subsidiary rather than issuing securities
convertible into, or exchangeable for, such securities. Notwithstanding the
foregoing, holders of Class B Common Stock and Class C Common Stock will be
entitled to receive the Second Dividend, if necessary, in the amount of the
difference between the actual amount of undistributed taxable income of the
Operating Partnerships through the closing of the Reorganization and the amount
of the Dividend and the Reorganization Notes. See "Reorganization and Related
Transactions".

RESTRICTIONS ON ADDITIONAL ISSUANCES AND TRANSFER. The Company may not
issue or sell (x) any shares of Class B Common Stock or any securities
(including, without limitation, any rights, options, warrants or other
securities) convertible into, or exchangeable or exercisable for, shares of
Class B Common Stock to any person who is not a Lauren Family Member and (y) any
shares of Class C Common Stock or any securities (including, without limitation,
any rights, options, warrants or other securities) convertible into, or
exchangeable or exercisable for, shares of Class C Common Stock to any person
who is not a member of the GS Group or, until April 15, 2002, any successor
thereof. Additionally, shares of Class B Common Stock may not be transferred,
whether by sale, assignment, gift, bequest, appointment or otherwise, to a
person other than a Lauren Family Member. Shares of Class C Common Stock may not
be transferred to a person other than a member of the GS Group or, until April
15, 2002, any successor thereof. Notwithstanding the foregoing (i) any Lauren
Family Member may pledge his, her or its shares of Class B Common Stock to a
financial institution pursuant to a bona fide pledge of such shares as
collateral security for indebtedness due to the pledgee provided that such
shares remain subject to the transfer restrictions and that, in the event of
foreclosure or other similar action by the pledgee, such pledged shares of Class
B Common Stock may only be transferred to a Lauren Family Member or converted
into shares of Class A Common Stock, as the pledgee may elect and (ii) the
foregoing transfer restrictions shall not apply in the case of a merger,
consolidation or business combination of the Company with or into another
corporation in which all of the outstanding shares of Common Stock and Preferred
Stock of the Company regardless of class are purchased by the acquiror.

CONVERSION. Class A Common Stock has no conversion rights. Shares of Class
B Common Stock and Class C Common Stock are convertible into Class A Common
Stock, in whole or in part, at any time and from time to time at the option of
the holder, on the basis of one share of Class A Common Stock for each share of
Class B Common Stock or Class C Common Stock converted. Each share of Class C
Common Stock will also automatically convert into one share of Class A Common
Stock if, on the record date for any meeting of the stockholders of the Company,
the number of shares of Class C Common Stock then outstanding is less than 10%
of the aggregate number of shares of Common Stock outstanding immediately upon
the consummation of the Offerings (subject to appropriate adjustment for stock
splits, reverse stock splits, stock dividends and similar transactions).
Additionally, at such time as a person ceases to be a (i) Lauren Family Member,
any share of Class B Common Stock held by such person at such time shall
automatically convert into a share of Class A Common Stock, or (ii) a member of
the GS Group (or, until April 15, 2002, any successor thereof), any share of
Class C Common Stock held by such person at such time shall automatically
convert into a share of Class A Common Stock. The Company covenants that (i) it
will at all times reserve and keep available out of its authorized but unissued
shares of Class A Common Stock, such number of shares of Class A Common Stock
issuable upon the conversion of all outstanding shares of Class B Common Stock
and Class C Common Stock, (ii) it will cause any shares of Class A Common Stock
issuable upon conversion of a share of Class B Common Stock or Class C Common
Stock that require registration with or approval of any governmental authority
under federal or state law before such shares may be issued upon conversion to
be so registered or approved and (iii) it will use its best efforts to list the
shares of Class A Common Stock required to be delivered upon conversion prior to
such delivery upon such national securities exchange upon which the outstanding
Class A Common Stock is listed at the time of such delivery.

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RECLASSIFICATION AND MERGER. In the event of a reclassification or other
similar transaction as a result of which the shares of Class A Common Stock are
converted into another security, then a holder of Class B Common Stock or Class
C Common Stock will be entitled to receive upon conversion the amount of such
other security that the holder would have received if the conversion occurred
immediately prior to the record date of such reclassification or other similar
transaction. No adjustments in respect of dividends will be made upon the
conversion of any share of Class B Common Stock or Class C Common Stock; except
if a share is converted subsequent to the record date for the payment of a
dividend or other distribution on shares of Class B Common Stock or Class C
Common Stock but prior to such payment, then the registered holder of such share
at the close of business on such record date will be entitled to receive the
dividend or other distribution payable on such date regardless of the conversion
thereof or the Company's default in payment of the dividend due on such date.

In the event the Company enters into any consolidation, merger, combination
or other transaction in which shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other property, then,
and in such event, the shares of each class of Common Stock will be exchanged
for or changed into either (1) the same amount of stock, securities, cash and/or
any other property, as the case may be, into which or for which each share of
any other class of Common Stock is exchanged or changed; provided, however, that
if shares of Common Stock are exchanged for or changed into shares of capital
stock, such shares so exchanged for or changed into may differ to the extent and
only to the extent that the Class A Common Stock, the Class B Common Stock and
the Class C Common Stock differ as provided in the Company's Amended and
Restated Certificate of Incorporation or (2) if holders of each class of Common
Stock are to receive different distributions of stock, securities, cash and/or
any other property, an amount of stock, securities, cash and/or property per
share having a value, as determined by an independent investment banking firm of
national reputation selected by the Board of Directors, equal to the value per
share into which or for which each share of any other class of Common Stock is
exchanged or changed.

LIQUIDATION. In the event of liquidation of the Company, after payment of
the debts and other liabilities of the Company and after making provision for
the holders of Preferred Stock, if any, the remaining assets of the Company will
be distributable ratably among the holders of the Class A Common Stock, Class B
Common Stock and Class C Common Stock treated as a single class.

OTHER PROVISIONS. Except as described below, the holders of the Class A
Common Stock, Class B Common Stock and Class C Common Stock are not entitled to
preemptive rights. None of the Class A Common Stock, Class B Common Stock or
Class C Common Stock may be subdivided or combined in any manner unless the
other classes are subdivided or combined in the same proportion. The Company may
not make any offering of options, rights or warrants to subscribe for shares of
Class B Common Stock or Class C Common Stock. If the Company makes an offering
of options, rights or warrants to subscribe for shares of any other class or
classes of capital stock (other than Class B Common Stock or Class C Common
Stock) to all holders of a class of Common Stock, then the Company is required
to simultaneously make an identical offering to all holders of the other classes
of Common Stock other than to any class the holders of which, voting as a
separate class, agrees that such offering need not be made to such class. All
such options, rights or warrants offerings shall offer the respective holders of
Class A Common Stock, Class B Common Stock and Class C Common Stock the right to
subscribe at the same rate per share.

TRANSFER AGENT AND REGISTRAR. The Transfer Agent and Registrar for the
Class A Common Stock will be The Bank of New York.

LISTING. The Class A Common Stock has been approved for listing, subject to
notice of issuance, on the NYSE under the trading symbol "RL".

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PREFERRED STOCK

The Board of Directors is authorized, subject to any limitations prescribed
by Delaware Law or the rules of the NYSE or other organizations on whose systems
capital stock of the Company may be quoted or listed, to issue shares of
Preferred Stock in one or more series, to establish from time to time the number
of shares to be included in each such series, to fix the rights, powers,
preferences and privileges of the shares of each wholly unissued series and any
qualifications, limitations or restrictions thereon, and to increase or decrease
the number of shares of such series, without any further vote or action by the
stockholders of the Company. The approval of the holders of at least 75% of the
outstanding shares of Class B Common Stock, however, is required for the
issuance of shares of Preferred Stock that have the right to vote for the
election of directors under ordinary circumstances or to elect 50% or more of
the directors under any circumstances. In no event will a series of Preferred
Stock be entitled to vote together with any class of Common Stock with respect
to the election of directors entitled to be elected by such class of Common
Stock. Depending upon the terms of any series of Preferred Stock established by
the Board of Directors, any or all series of Preferred Stock could have
preference over the Common Stock with respect to dividends and other
distributions and upon liquidation of the Company or could have voting or
conversion rights that could adversely affect the holders of the outstanding
Common Stock. In addition, the Preferred Stock could delay, defer or prevent a
change of control of the Company.

OTHER CHARTER AND BY-LAW PROVISIONS

Special meetings of stockholders of the Company may be called by the Board,
the Chairman of the Board of Directors or the Chief Executive Officer. Except as
otherwise required by law, stockholders, in their capacity as such, are not
entitled to request or call a special meeting of stockholders of the Company,
except that meetings of stockholders of any class of Common Stock may be called
by stockholders holding a majority of the shares of that class with respect to
any matter as to which the class of Common Stock is entitled to vote as a
separate class. Except with respect to any matter as to which a class of Common
Stock is entitled to vote as a separate class, the Company's stockholders may
not take any action on any matter by written consent. Certain provisions of the
Company's Amended and Restated Certificate of Incorporation relating to the
issuance of preferred stock, action by stockholders, calling of special
stockholder meetings and such amendment provision may be amended only with the
approval of 75% of the outstanding voting power of the Common Stock voting as a
single class in addition to any voting requirements under Delaware law.
Additionally, the provisions of the Amended and Restated Certificate of
Incorporation relating to certain terms of the Common Stock and the provision
prohibiting preferred stockholders from voting together with any class of Common
Stock for the election of directors entitled to be elected by such class of
Common Stock may not be amended in any respect with respect to any affected
class of Common Stock without the approval of such class of Common Stock voting
as a separate class. The Board may from time to time adopt, amend or repeal the
By-laws except that any By-laws adopted or amended by the Board may be amended
or repealed, and any By-laws may be adopted, by the stockholders of the Company
by vote of a majority of the holders of shares of stock of the Company entitled
to vote in the election of directors of the Company.

ADVANCE NOTICE PROVISIONS FOR STOCKHOLDER NOMINATIONS AND STOCKHOLDER PROPOSALS

The Company's By-laws establish an advance notice procedure for
stockholders to make nominations of candidates for election as director, or to
bring other business before an annual meeting of stockholders of the Company
(the "Stockholder Notice Procedure").

The Stockholder Notice Procedure provides that, subject to the rights of
any holders of Preferred Stock, only persons who are nominated by, or at the
direction of, the Board, or by a stockholder who has given timely written notice
to the Secretary of the Company prior to the meeting at which directors are to
be elected, will be eligible for election as directors of the Company. The
Stockholder Notice Procedure provides that at an annual meeting only such
business may be

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conducted as has been brought before the meeting by, or at the direction of, the
Board or by a stockholder who has given timely written notice to the Secretary
of the Company of such stockholder's intention to bring such business before
such meeting. Under the Stockholder Notice Procedure, to be timely, notice of
stockholder nominations or proposals to be made at an annual or special meeting
must be received by the Company not less than 60 days nor more than 90 days
prior to the scheduled date of the meeting (or, if less than 70 days' notice or
prior public disclosure of the date of the meeting is given, the 10th day
following the earlier of (i) the day such notice was mailed or (ii) the day such
public disclosure was made).

Under the Stockholder Notice Procedure, a stockholder's notice to the
Company proposing to nominate a person for election as a director must contain
certain information about the nominating stockholder and the proposed nominee.
Under the Stockholder Notice Procedure, a stockholder's notice relating to the
conduct of business other than the nomination of directors must contain certain
information about such business and about the proposing stockholder. If the
Chairman of the Board or other officer presiding at a meeting determines that a
person was not nominated, or other business was not brought before the meeting,
in accordance with the Stockholder Notice Procedure, such person will not be
eligible for election as a director, or such business will not be conducted at
such meeting, as the case may be.

By requiring advance notice of nominations by stockholders, the Stockholder
Notice Procedure affords the Board an opportunity to consider the qualifications
of the proposed nominees and, to the extent deemed necessary or desirable by the
Board, to inform stockholders about such qualifications. By requiring advance
notice of other proposed business, the Stockholder Notice Procedure also
provides a more orderly procedure for conducting annual meetings of stockholders
and, to the extent deemed necessary or desirable by the Board, provides the
Board with an opportunity to inform stockholders, prior to such meetings, of any
business proposed to be conducted at such meetings, together with any
recommendations as to the Board's position regarding action to be taken with
respect to such business, so that stockholders can better decide whether to
attend such a meeting or to grant a proxy regarding the disposition of any such
business.

Although the By-laws of the Company do not give the Board any power to
approve or disapprove stockholder nominations for the election of directors or
proposals for action, the foregoing provisions may have the effect of precluding
a contest for the election of directors or the consideration of stockholder
proposals if the proper procedures are not followed, and of discouraging or
deterring a third party from conducting a solicitation of proxies to elect its
own slate of directors or to approve its own proposal, without regard to whether
consideration of such nominees or proposals might be harmful or beneficial to
the Company and its stockholders.

SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW

The Company is subject to the provisions of Section 203 of Delaware Law
("Section 203"). Under Section 203, certain "business combinations" between a
Delaware corporation whose stock generally is publicly traded or held of record
by more than 2,000 stockholders and an "interested stockholder" are prohibited
for a three-year period following the date that such a stockholder became an
interested stockholder, unless (i) the corporation has elected in its original
certificate of incorporation not to be governed by Section 203 (the Company did
not make such an election), (ii) the business combination was approved by the
Board of Directors of the corporation before the other party to the business
combination became an interested stockholder, (iii) upon consummation of the
transaction that made it an interested stockholder, the interested stockholder
owned at least 85% of the voting stock of the corporation outstanding at the
commencement of the transaction (excluding voting stock owned by directors who
are also officers or held in employee benefit plans in which the employees do
not have a confidential right to tender or vote stock held by the plan) or (iv)
the business combination was approved by the Board of Directors of the
corporation and ratified by two-thirds of the voting stock which the interested
stockholder did not own. The three-year prohibition also does not apply to
certain business combinations proposed by

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an interested stockholder following the announcement or notification of certain
extraordinary transactions involving the corporation and a person who had not
been an interested stockholder during the previous three years or who became an
interested stockholder with the approval of the majority of the corporation's
directors. The term "business combination" is defined generally to include
mergers or consolidations between a Delaware corporation and an "interested
stockholder", transactions with an "interested stockholder" involving the assets
or stock of the corporation or its majority-owned subsidiaries and transactions
which increase an interested stockholders percentage ownership of stock. The
term "interested stockholder" is defined generally as a stockholder who,
together with affiliates and associates, owns (or, within three years prior, did
own) 15% or more of a Delaware corporation's voting stock. Section 203 could
prohibit or delay a merger, takeover or other change in control of the Company
and therefore could discourage attempts to acquire the Company.

SHARES ELIGIBLE FOR FUTURE SALE

Prior to the Offerings there has been no market for the shares of the Class
A Common Stock. The Company can make no predictions as to the effect, if any,
that sales of shares or the availability of shares for sale will have on the
market price prevailing from time to time. Nevertheless, sales of significant
amounts of the Class A Common Stock in the public market, or the perception that
such sales may occur, may adversely affect prevailing market prices. See "Risk
Factors--Shares Eligible for Future Sale; Potential Adverse Effect on Stock
Price; Registration Rights".

In general, under Rule 144, if a period of at least one year has elapsed
since the later of the date the "restricted securities" were acquired from the
Company and the date they were acquired from an Affiliate, then the holder of
such restricted securities (including an Affiliate) is entitled to sell a number
of shares within any three-month period that does not exceed the greater of 1%
of the then outstanding shares of the Class A Common Stock (approximately
295,000 shares immediately after the Offerings) or the average weekly reported
volume of trading of the Class A Common Stock on the NYSE during the four
calendar weeks preceding such sale. The holder may only sell such shares through
unsolicited brokers' transactions. Sales under Rule 144 are also subject to
certain requirements pertaining to the manner of such sales, notices of such
sales and the availability of current public information concerning the Company.
Affiliates may sell shares not constituting restricted shares in accordance with
the foregoing volume limitations and other requirements but without regard to
the one year holding period. Under Rule 144(k), if a period of at least two
years has elapsed between the later of the date restricted securities were
acquired from the Company and the date they were acquired from an Affiliate, as
applicable, a holder of such restricted securities who is not an Affiliate at
the time of the sale and has not been an Affiliate for at least three months
prior to the sale would be entitled to sell the shares immediately without
regard to the volume limitations and other conditions described above.

Upon completion of the Offerings, the Company will have outstanding a total
of 29,847,846 shares of Class A Common Stock, 45,935,021 shares of Class B
Common Stock and 22,720,979 shares of Class C Common Stock. Of such shares, the
29,500,000 shares of Class A Common Stock being sold in the Offerings (together
with any shares sold upon exercise of the Underwriters' over-allotment options)
will be immediately eligible for sale in the public market without restriction,
except for shares purchased by or issued to any Affiliate of the Company. All
45,935,021 shares of Class B Common Stock (which may be converted into Class A
Common Stock at any time) will be owned by the Lauren Family Members and all
22,720,979 shares of Class C Common Stock (which may be converted into Class A
Common Stock at any time) will be owned by the GS Group. So long as any
stockholder remains an Affiliate of the Company, any shares of Class A Common
Stock (including any shares issued upon conversion of other classes of Common
Stock) held by such person will only be available for public sale if such shares
are registered under the Securities Act or sold in accordance with an applicable
exemption from registration, such as Rule 144, subject to the restrictions
discussed above. The Company, Lauren Family Members that own shares of Common

91
92

Stock, the GS Group and the executive officers and directors of the Company have
agreed not to offer, sell, contract to sell or otherwise dispose of any shares
of Class A Common Stock or any securities of the Company that are substantially
similar to the Class A Common Stock, including but not limited to any securities
that are convertible into or exchangeable for, or that represent the right to
receive, Class A Common Stock or any such substantially similar securities
(other than pursuant to employee or director stock or stock option plans
existing on the date of this Prospectus or in connection with the PRC
Acquisition) for a period of 180 days after the date of this Prospectus without
the prior written consent of Goldman, Sachs & Co., as representative of the
Underwriters, except for the shares of Class A Common Stock offered in
connection with the Offerings. In addition, certain restrictions on transfers of
shares of Common Stock by the stockholders of the Company are contained in the
Stockholders' Agreement. See "Certain Relationships and Related
Transactions -- Reorganization Transactions".

The Company intends to file as soon as practicable after the commencement
of the Offerings a registration statement on Form S-8 under the Securities Act
to register approximately 10,000,000 and 500,000 shares of Class A Common Stock
reserved for issuance under the 1997 Stock Incentive Plan and the 1997
Non-Employee Director Option Plan, respectively, including, in some cases,
shares for which an exemption under Rule 144 would also be available, thus
permitting the resale of shares issued under such plans by non-Affiliates in the
public market without restriction under the Securities Act. Such registration
statement is expected to become effective immediately upon filing, whereupon
shares registered thereunder will become eligible for sale in the public market,
subject to vesting and, in certain cases, subject to the lock-up agreement
described above. Upon completion of the Offerings, options to purchase an
aggregate of approximately 4,200,000 shares of Class A Common Stock will be
outstanding under the 1997 Stock Incentive Plan and the 1997 Non-Employee
Director Option Plan.

Certain Lauren Family Members and the GS Group are entitled to certain
registration rights with respect to their shares of Common Stock. See "Certain
Relationships and Related Transactions--Registration Rights Agreement".

LEGAL MATTERS

The legality of the Class A Common Stock offered hereby and certain tax and
other legal matters will be passed upon for the Company by Paul, Weiss, Rifkind,
Wharton & Garrison. Certain legal matters will be passed upon for the
Underwriters by Fried, Frank, Harris, Shriver & Jacobson (a partnership
including professional corporations), New York, New York.

EXPERTS

The combined financial statements and schedules of Polo Ralph Lauren
Corporation as of March 30, 1996 and for each of the two years in the period
ended March 30, 1996 included in this Prospectus have been audited by Mahoney,
Cohen, Rashba & Pokart, CPA, PC, independent auditors, as set forth in their
reports thereon included elsewhere herein and are included in reliance upon such
reports given upon the authority of such firm as experts in accounting and
auditing.

The combined financial statements of Polo Ralph Lauren Corporation as of
March 29, 1997 and for the year then ended, included in the Prospectus and the
related financial statement schedule included elsewhere in the Registration
Statement of which this Prospectus is a part have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their reports appearing herein
and elsewhere in the registration statement, and are included in reliance upon
the reports of such firm given upon their authority as experts in accounting and
auditing.

In December 1996, the Company appointed Deloitte & Touche LLP as its
independent public accountants to replace Mahoney Cohen Rashba & Pokart, CPA,
PC. The former accountant's report on the financial statements for the years
ended March 30, 1996 and April 1, 1995 did not contain an

92
93

adverse opinion, disclaimer opinion, and was not qualified or modified as to
uncertainty, audit scope, or accounting principles. In addition, there were no
disagreements between the Company and its former accountants during the
preceding two fiscal years or during any subsequent interim period preceding
their replacement on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedures during the two most recent
fiscal years in the period ended March 30, 1996 and any subsequent interim
period preceding such dismissal. The decision to change accountants was approved
by the general partner of Enterprises.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 (the "Registration
Statement") under the Securities Act with respect to the Class A Common Stock
offered hereby. This Prospectus, which is part of the Registration Statement,
does not contain all of the information set forth in the Registration Statement
and the exhibits and schedules thereto, certain items of which are omitted as
permitted by the rules and regulations of the Commission. For further
information with respect to the Company and the Class A Common Stock offered
hereby, reference is made to the Registration Statement and to the financial
statements, schedules, and exhibits filed as a part thereof. The Registration
Statement, including all schedules and exhibits thereto, may be inspected
without charge at the public reference facilities maintained by the Commission
at its principal office at Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. and at the Commission's regional offices at 7 World Trade Center, 13th
floor, New York, New York and 500 West Madison Street, Suite 1400, Chicago,
Illinois. Copies of such material may be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. Such material may also be accessed electronically by means of
the Commission's home page on the Internet at http://www.sec.gov.

The Company is aware of a website on the internet at
http://www.ralphlaurenfragrance.com which was created and is maintained solely
by Cosmair, Inc., one of the Company's independent licensing partners. Cosmair,
Inc. is the author of all information on such website and is solely responsible
for its contents. The Company neither drafts nor approves the contents of any
material on Cosmair, Inc.'s website.

Statements contained in this Prospectus concerning the contents of any
contract or other document are not necessarily complete and, in each instance,
reference is made to the copy of such contract or other document filed as an
exhibit to the Registration Statement or otherwise with the Commission, each
such statement being qualified in all respects by such reference.

The Company will be subject to the periodic reporting and other
informational requirements of the Exchange Act. The Company will fulfill its
obligations with respect to such requirements by filing periodic reports with
the Commission. In addition, the Company intends to furnish its stockholders
with annual reports containing financial statements audited by independent
certified accountants.

93
94

POLO RALPH LAUREN CORPORATION

INDEX TO COMBINED FINANCIAL STATEMENTS

PAGE
----

Independent Auditors' Report........................................................ F-2
Independent Auditor's Report........................................................ F-3
Combined Balance Sheets as of March 30, 1996 and March 29, 1997..................... F-4
Combined Statements of Income for the years ended April 1, 1995, March 30, 1996 and
March 29, 1997.................................................................... F-5
Combined Statements of Stockholders' Equity and Partners' Capital for the years
ended April 1, 1995, March 30, 1996 and March 29, 1997............................ F-6
Combined Statements of Cash Flows for the years ended April 1, 1995, March 30, 1996
and March 29, 1997................................................................ F-7
Notes to Combined Financial Statements.............................................. F-8

The financial statements of Polo Ralph Lauren Corporation have not been included
because the registrant is a newly-formed shell company into which the operating
partnerships will be reorganized.

F-1
95

INDEPENDENT AUDITORS' REPORT

To the Partners of
Polo Ralph Lauren Enterprises, L.P.
New York, New York

We have audited the accompanying combined balance sheet of Polo Ralph Lauren
Corporation (the "Company" as defined in Note 1(a)) as of March 29, 1997, and
the related combined statements of income, partners capital, and cash flows for
the year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company as of March 29, 1997, and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.

/s/ DELOITTE & TOUCHE LLP

DELOITTE & TOUCHE LLP
New York, New York
May 15, 1997
(June 9, 1997 as to Note 7)

F-2
96

INDEPENDENT AUDITOR'S REPORT

The Partners
Polo Ralph Lauren Enterprises, L.P.

We have audited the accompanying combined balance sheet of Polo Ralph
Lauren Corporation (the "Company" as defined in note 1(a)) as of March 30, 1996,
and the related combined statements of income, partners' capital, and cash flows
for each of the two years in the period ended March 30, 1996. These combined
financial statements are the responsibility of management. Our responsibility is
to express an opinion on these combined financial statements based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of Polo Ralph Lauren
Corporation as of March 30, 1996, and the results of its operations and its cash
flows for each of the two years in the period ended March 30, 1996 in conformity
with generally accepted accounting principles.

/s/ Mahoney Cohen Rashba & Pokart, CPA, PC

MAHONEY COHEN RASHBA & POKART, CPA, PC
New York, New York
June 21, 1996,
except as to Note 1(a)
dated March 14, 1997

F-3
97

POLO RALPH LAUREN CORPORATION

COMBINED BALANCE SHEETS
(IN THOUSANDS)

PRO FORMA
MARCH 30, MARCH 29, MARCH 29,
1996 1997 1997
-------- --------- ---------
(UNAUDITED)

ASSETS
Current assets
Cash and cash equivalents............................. $ 13,568 $ 29,599
Accounts receivable, net of allowances of $11,054 and
$12,845, respectively.............................. 144,999 144,303
Inventories........................................... 269,113 222,147
Prepaid expenses and other............................ 31,886 40,290
-------- --------
Total current assets.......................... 459,566 436,339

Property and equipment, net............................. 48,980 83,240
Investment in and advances to affiliate................. 21,710 17,977
Other assets............................................ 33,417 39,187
-------- --------
$563,673 $ 576,743
======== ========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities
Notes and acceptances payable -- banks................ $ 73,731 $ 26,777
Current portion of long-term debt..................... 11,765 22,248
Current portion of subordinated notes................. -- 20,000
Dividend and Reorganization Notes payable............. -- -- $ 85,792
Accounts payable...................................... 74,244 89,417
Accrued expenses and other............................ 36,982 65,525
-------- --------
Total current liabilities..................... 196,722 223,967

Long-term debt.......................................... 70,149 47,875
Other noncurrent liabilities............................ 15,149 20,216
Subordinated notes...................................... 44,000 24,000
Commitments and contingent liabilities (Note 12)........ -- --

Partners' capital/stockholders' equity
Common Stock
Class A, par value $.01 per share; 500,000,000
shares authorized; 13,744,000 shares issued and
outstanding, pro forma........................... 137
Class B, par value $.01 per share; 100,000,000
shares authorized; 50,335,021 shares issued and
outstanding, pro forma........................... 504
Class C, par value $.01 per share; 70,000,000
shares authorized; 24,920,979 issued and
outstanding, pro forma........................... 249
Additional paid-in-capital............................ 199,435
Partners' capital/stockholders' equity................ 237,541 260,837 --
Cumulative translation adjustment..................... 112 (152) --
-------- -------- --------
Total partners' capital/stockholders'
equity...................................... 237,653 260,685 $ 200,325
-------- --------- ---------
---------
$563,673 $ 576,743
======== ========

See accompanying notes to combined financial statements.

F-4
98

POLO RALPH LAUREN CORPORATION

COMBINED STATEMENTS OF INCOME
(IN THOUSANDS)

FISCAL YEAR ENDED
--------------------------------------
APRIL 1, MARCH 30, MARCH 29,
1995 1996 1997
-------- ---------- ----------

Net sales............................................ $746,595 $ 909,720 $1,043,330
Licensing revenue.................................... 100,040 110,153 137,113
-------- -------- ----------
Net revenues....................................... 846,635 1,019,873 1,180,443
Cost of goods sold................................... 474,999 583,546 648,597
-------- -------- ----------
Gross profit....................................... 371,636 436,327 531,846
Selling, general and administrative expenses......... 261,506 309,207 374,483
-------- -------- ----------
Income from operations............................. 110,130 127,120 157,363
Interest expense..................................... 16,450 16,287 13,660
Equity in net loss of affiliate...................... 262 1,101 3,599
-------- -------- ----------
Income before income taxes......................... 93,418 109,732 140,104
Provision for income taxes........................... 13,244 10,925 22,804
-------- -------- ----------
Net income......................................... $ 80,174 $ 98,807 $ 117,300
======== ======== ==========
PRO FORMA (NOTE 1)--(UNAUDITED)
Historical income before income taxes................ $ 140,104
Pro forma provision for income taxes................. 58,844
----------
Pro forma net income................................. $ 81,260
==========
Pro forma net income per share....................... $ 0.88
==========
Pro forma common shares outstanding.................. 92,672,565
==========

See accompanying notes to combined financial statements.

F-5
99

POLO RALPH LAUREN CORPORATION

COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY AND PARTNERS' CAPITAL
(IN THOUSANDS)

RETAINED
ADDITIONAL EARNINGS AND CUMULATIVE
COMMON PAID IN PARTNERS' TRANSLATION
STOCK CAPITAL CAPITAL ADJUSTMENT TOTAL
------- ----------- ------------- ------------ ---------

Balance at April 2, 1994.............. $ 58 $ 88 $ 117,580 $ 311 $ 118,037

Net income............................ 80,174 80,174
Capital contributions................. 128,000 128,000
Formation of partnership.............. (58) (88) (1,274) (80) (1,500)
Translation adjustment................ (287) (287)
Distributions to stockholders and
partners............................ (135,845) (135,845)
--- --- -------- ----- --------
Balance at April 1, 1995............ -- -- 188,635 (56) 188,579

Net income............................ 98,807 98,807
Translation adjustment................ 168 168
Capital contributions................. 10,000 10,000
Distributions to partners............. (59,901) (59,901)
--- --- -------- ----- --------
Balance at March 30, 1996........... -- -- 237,541 112 237,653

Net income............................ 117,300 117,300
Translation adjustment................ (264) (264)
Distributions to partners............. (94,004) (94,004)
--- --- -------- ----- --------
Balance at March 29, 1997........... -- -- $ 260,837 $ (152) $ 260,685
=== === ======== ===== ========

See accompanying notes to combined financial statements.

F-6
100

POLO RALPH LAUREN CORPORATION

COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

FISCAL YEAR ENDED
------------------------------------
MARCH
APRIL 1, 30, MARCH 29,
1995 1996 1997
--------- -------- ---------

CASH FLOWS FROM OPERATING ACTIVITIES
Net income....................................................... $ 80,174 $ 98,807 $ 117,300
Adjustments to reconcile net income to net cash provided by
operating activities:
Equity in net loss of affiliate................................ 262 1,101 3,599
Depreciation and amortization.................................. 9,938 9,743 13,755
Provision for losses on accounts receivable.................... 2,700 1,122 833
Other.......................................................... 1,244 (2,596) (42)
Changes in assets and liabilities, net of acquisition
Accounts receivable.......................................... 15,276 (34,155) (137)
Inventories.................................................. (61,680) 21,811 46,702
Prepaid expenses and other................................... 10,075 (10,428) (9,223)
Other assets................................................. (1,740) (6,733) (4,323)
Accounts payable............................................. (1,172) 9,798 15,173
Accrued expenses and other................................... 1,134 2,855 19,943
--------- --------- ---------
Net cash provided by operating activities........................ 56,211 91,325 203,580
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition.................................................... -- (39,726) --
Purchases of property and equipment............................ (4,939) (5,575) (35,330)
Cash surrender value -- officers' life insurance............... (3,473) (3,685) (3,230)
--------- --------- ---------
Net cash used in investing activities............................ (8,412) (48,986) (38,560)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from (repayments of) short-term borrowings, net....... (98,408) 14,109 (46,954)
Repayments of long-term debt................................... (51,555) (11,719) (11,791)
Proceeds from long-term debt................................... 106,290 10,000 --
Distributions paid to stockholders and partners................ (134,308) (56,284) (90,284)
Capital contributions.......................................... 128,000 10,000 --
--------- --------- ---------
Net cash used in financing activities............................ (49,981) (33,894) (149,029)
--------- --------- ---------
Net (decrease) increase in cash and cash equivalents............. (2,182) 8,445 15,991
Effect of exchange rate changes on cash and cash equivalents..... -- (26) 40
Cash and cash equivalents at beginning of period................. 7,331 5,149 13,568
--------- --------- ---------
Cash and cash equivalents at end of period....................... $ 5,149 $ 13,568 $ 29,599
========= ========= =========
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest......................................... $ 15,457 $ 17,189 $ 16,005
========= ========= =========
Cash paid for income taxes..................................... $ 10,592 $ 11,602 $ 22,280
========= ========= =========
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES
Foreign tax credits distributed to stockholders/partners....... $ 1,537 $ 3,617 $ 3,720
========= ========= =========
Capital obligations for completed shop-within-shop boutiques... $ 8,600
=========
Fair value of assets acquired, excluding cash.................. $ 40,260
Cash paid...................................................... (39,726)
---------
Payable to seller.............................................. $ 534
=========

See accompanying notes to combined financial statements.

F-7
101

POLO RALPH LAUREN CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT WHERE OTHERWISE INDICATED)

1. BASIS OF PRESENTATION AND ORGANIZATION

(a) Basis of Presentation

The accompanying combined financial statements include the accounts of Polo
Ralph Lauren Enterprises, L.P. ("Enterprises"), Polo Ralph Lauren, L.P. and
subsidiaries ("Polo Partnership"), The Ralph Lauren Womenswear Company, L.P. and
subsidiary ("Womenswear") and an investment in Polo Retail Corporation and
subsidiaries ("PRC"), a 50% joint venture with a nonaffiliated partner,
accounted for under the equity method (collectively the "Company"). The
controlling interests of the Company are held by Mr. Ralph Lauren, with a 28.5%
interest held by certain investment funds affiliated with The Goldman Sachs
Group, L.P. (collectively, the "GS Group").

On October 31, 1994, Enterprises and the Polo Partnership were formed
pursuant to limited partnership agreements to own and operate the businesses
previously conducted by Mr. Lauren. Mr. Lauren contributed his ownership
interests in these businesses for an effective 71.5% ownership interest and the
GS Group made a capital cash contribution of $128.0 million for an effective
ownership interest of 28.5%.

The combined financial statements for the year ended April 1, 1995 include
the businesses previously conducted by Mr. Lauren and have been prepared as if
the entities had operated as a single consolidated group since their respective
dates of organization. The financial statements are being presented on a
combined basis because of their common ownership. All significant intercompany
balances and transactions have been eliminated.

(b) Acquisition

On October 16, 1995, Womenswear acquired the assets of Ralph Lauren
Womenswear, Inc. ("RLW"), a nonaffiliated licensee, at book value which
approximated fair value, consisting principally of inventories ($19.7 million)
and accounts receivable ($18.2 million) for $40.3 million in cash. This
acquisition was accounted for as a purchase.

The Company, which operates in one business segment, designs, licenses,
contracts for the manufacture of, markets and distributes men's and women's
apparel, accessories, fragrances, skin care products and home furnishings. The
Company's sales are principally to major department and specialty stores located
throughout the United States. Additionally, the Company also sells directly to
consumers through Company-owned Polo stores, including flagship stores in New
York, and outlet stores located throughout the United States. A substantial
portion of the Company's net revenues and income from operations are derived
from, and identifiable assets are located in, the United States.

The Company is party to licensing agreements which grant the licensees
exclusive rights to use the various trademarks owned by the Company in
connection with the manufacture and sale of designated products in specified
geographical areas. Additionally, the Company has granted royalty-free licenses
to independent parties to operate Polo stores to promote the sale of merchandise
of the Company and its licensees both domestically and internationally. The
license agreements typically provide for designated terms with renewal options
based on achievement of specified sales targets. The agreements also require
that certain minimum amounts be spent on advertising for licensed products.
Additionally, as part of the licensing arrangements, each licensee is typically
required to enter into a design services agreement pursuant to which design and
other creative

F-8
102

POLO RALPH LAUREN CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, EXCEPT WHERE OTHERWISE INDICATED)

services are provided. The license and design services agreements provide for
payments based on specified percentages of net sales.

A significant amount of the Company's products are produced in the Far East
through arrangements with independent contractors. As a result, the Company's
operations could be adversely affected by political instability resulting in the
disruption of trade from the countries in which these contractors are located,
or by the imposition of additional duties or regulations relating to imports or
by the contractors' inability to meet the Company's production requirements.

(d) Reorganization and Pro Forma Adjustments (Unaudited)

In connection with the Company's contemplated initial public offerings of
stock (the "Offerings"), the partners and certain of their affiliates are
contributing to a newly formed entity, Polo Ralph Lauren Corporation ("Polo"),
all of the outstanding stock of and partnership interests in the entities which
comprise the Company, in exchange for various combinations of common stock (the
"Reorganization"). In connection with the Reorganization, the Company will
declare a dividend and issue reorganization notes to the stockholders
representing estimated undistributed earnings of the Company through the closing
of the Reorganization ("Dividend and Reorganization Notes").

Concurrently with the Reorganization, the Company will acquire from an
entity under common control the trademarks and rights under a licensing
agreement associated with its U.S. fragrance business and the interests it does
not already own in another related entity that holds the trademarks related to
its international licensing business in exchange for shares of Class B Common
Stock of Polo ("Trademark Acquisition").

Concurrently with the Reorganization, the Company will become subject to
additional Federal, state and local taxes. The pro forma combined statement of
income data for the year ended March 29, 1997 reflects adjustments for income
taxes based upon pro forma pre-tax income as if the Company had been subject to
additional Federal, state and local income taxes as of March 31, 1996, based
upon a pro forma effective tax rate of 42%. No other pro forma adjustments have
been reflected herein as their effects are not material to the results of
operations.

The pro forma combined balance sheet of the Company at March 29, 1997 is
adjusted for: (i) the declaration of Dividend and the issuance of the
Reorganization Notes to the stockholders of Polo, which through March 29, 1997
approximated $85.8 million; and (ii) the recording of a net deferred tax asset
of $25.4 million, in addition to approximately $2.8 million of certain Federal,
state and local deferred tax assets previously recorded, which Polo will record
concurrently with the termination of the Company's partnership status. The pro
forma deferred income taxes reflect the net tax effect of temporary differences,
primarily uniform inventory capitalization, depreciation, allowance for doubtful
accounts and other accruals, between the carrying amounts of assets and
liabilities for financial reporting and the amounts used for income tax
purposes.

(e) Pro forma net income per share (Unaudited)

Pro forma net income per share is based upon (i) 89,000,000 shares of
Common Stock outstanding as a result of the Reorganization and the Trademark
Acquisition; increased by (ii) the sale of 3,568,719 shares of Class A Common
Stock by the Company at an offering price of $26.00 per share ($24.04 net of
expenses), the proceeds of which would be necessary to pay approximately $85,792
in satisfaction of the Dividend and Reorganization Notes; (iii) 26,923 shares of
Class A Common Stock expected to be issued in connection with the PRC
Acquisition and

F-9
103

POLO RALPH LAUREN CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, EXCEPT WHERE OTHERWISE INDICATED)

(iv) 76,923 shares of Class A Common Stock which the Company will award to an
executive officer simultaneous with the commencement of the Offerings.

Supplementary pro forma net income per share of $0.83 is based upon the
average number of shares of Common Stock used in the calculation of pro forma
net income per Common Stock increased by (i) the sale of 998,336 shares of Class
A Common Stock by the Company at an initial offering price of $26.00 ($24.04,
net of expenses), the proceeds of which would be necessary to repay
approximately $24,000 outstanding under the Subordinated Notes (as defined) and
(ii) the sale of 4,832,196 shares of Class A Common Stock by the Company, at an
offering price of $26.00 ($24.04, net of expenses), the proceeds of which would
be necessary to repay approximately $116,166 of the Company's outstanding
indebtedness.

2. SIGNIFICANT ACCOUNTING POLICIES

Fiscal Year

The Company's fiscal year ends on the Saturday nearest to March 31. All
references herein to "1995," "1996" and "1997" represent the 52 week fiscal
years ended April 1, 1995, March 30, 1996 and March 29, 1997, respectively.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make certain estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid investments with an
original maturity of three months or less.

Inventories

Wholesale inventories are valued at the lower of cost (first-in, first-out
method) or market. Retail inventories are valued using the retail method.

Property, Equipment, Depreciation and Amortization

Property and equipment are stated at cost. Depreciation of furniture and
fixtures and machinery and equipment is calculated using the straight-line
method over estimated average useful lives of approximately five years.
Leasehold improvements are amortized using the straight-line method over the
lesser of the term of the related lease or the estimated useful life. Major
additions and betterments are capitalized, and repairs and maintenance are
charged to operations in the period incurred. Additionally, the Company
capitalizes its share of the cost of constructing shop-within-shop boutiques
under agreements with retailers and amortizes such costs using the straight-line
method over the lesser of their estimated useful lives or the life of the
underlying agreement.

F-10
104

POLO RALPH LAUREN CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, EXCEPT WHERE OTHERWISE INDICATED)

Officers' Life Insurance

The Company maintains key man life insurance policies on several of its
senior executives and other related parties, certain of which contain split
dollar arrangements. The Company is not the beneficiary under most of these
policies. The key man policies are recorded at their cash surrender value while
the policies with split dollar arrangements are recorded at the lesser of their
cash surrender value or premiums paid. Such policies amounted to $21,734 and
$24,964, net of loans of $5,608 and $5,757 at March 30, 1996 and March 29, 1997,
respectively, and are included in other assets in the accompanying combined
balance sheets.

Store Preopening Costs

Costs associated with the opening of a new store are deferred (included in
prepaid expenses and other) and amortized within one year commencing from the
date of the store opening.

Impairment of Long-Lived and Intangible Assets

In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 121, Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed Of, which requires
impairment losses to be recorded on long-lived assets used in operations when
indicators of impairment are present and the undiscounted cash flows estimated
to be generated by those assets are less than the assets' carrying amount. In
evaluating the fair value and future benefits of long-lived assets, the Company
performs an analysis of the anticipated undiscounted future net cash flows of
the related long-lived assets and reduces their carrying value by the excess, if
any, of the result of such calculation. The Company adopted SFAS No. 121
effective March 31, 1996. There were no adjustments to the carrying amount of
long-lived assets resulting from the Company's evaluation.

Revenues

Sales are recognized upon shipment of products to customers and, in the
case of sales by Company-owned outlet and retail stores, when goods are sold to
customers. Allowances for estimated uncollectible accounts and discounts are
provided when sales are recorded. Licensing revenue is recognized as earned.

Concentration of Credit Risk

The Company sells its merchandise primarily to major upscale department
stores across the United States and extends credit based on an evaluation of the
customer's financial condition, usually without requiring collateral. Credit
risk is driven by conditions or occurrences within the economy and the retail
industry and is principally dependent on each customer's financial condition. A
decision by the controlling owner of a group of stores or any substantial
customer to decrease the amount of merchandise purchased from the Company or to
cease carrying its products could materially adversely affect the Company. The
Company had three customers who in aggregate constituted 36% and 48% of trade
accounts receivable outstanding at March 30, 1996 and March 29, 1997,
respectively. Additionally, the Company had three licensees who in aggregate
constituted approximately 45%, 43% and 39% of licensing revenue in fiscal 1995,
1996 and 1997, respectively.

The Company had one significant customer that accounted for approximately
11% of net sales in fiscal 1995, 1996 and 1997, respectively.

F-11
105

POLO RALPH LAUREN CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, EXCEPT WHERE OTHERWISE INDICATED)

The Company monitors credit levels and the financial condition of its
customers on a continuing basis to minimize credit risk. The Company believes
that adequate provision for credit loss has been made in the accompanying
combined financial statements.

The Company is also subject to concentrations of credit risk with respect
to its cash and cash equivalents which it minimizes by placing these funds with
high-quality institutions.

Advertising

The Company expenses the production costs of advertising, marketing and
public relations expenses upon the first showing of the related advertisement.
These expenses amounted to $34,028, $44,488 and $55,498 in fiscal 1995, 1996 and
1997, respectively.

Income Taxes

The entities in the combined group include principally a Subchapter S
Corporation in fiscal 1995 and partnerships in fiscal 1996 and 1997 which are
not subject to Federal or certain state income taxes. Therefore, no provision
has been made in the accompanying combined financial statements as taxes are the
liability of the partners. However, Federal, state and local taxes have been
provided on the income of all domestic C corporations in the combined group.
Foreign income taxes have also been provided on the income of the foreign
companies in the combined group.

The Company has recorded its provision for income taxes in accordance with
SFAS No. 109, Accounting for Income Taxes. Under SFAS No. 109, the deferred tax
provision is determined under the liability method which requires the
recognition of deferred tax assets and liabilities based on differences between
financial statement and tax bases of assets and liabilities using presently
enacted tax rates.

Financial Instruments

The Company uses derivative financial instruments to reduce its exposures
to changes in interest rates and foreign exchange rates. The Company does not
hold or issue financial instruments for trading or speculative purposes. While
these instruments are subject to risk of loss from changes in exchange and
interest rates, those losses would generally be offset by gains on the related
exposures.

Foreign Currency Translation

The financial position and results of operations of a foreign subsidiary of
the Company is measured using the local currency as the functional currency.
Assets and liabilities are translated at the exchange rate in effect at each
year end. Results of operations are translated at the average rate of exchange
prevailing throughout the period. Translation adjustments arising from
differences in exchange rates from period to period are included in the
cumulative translation adjustment account under partners' capital. Gains and
losses from foreign currency transactions are included in operating results and
were not material.

Stock Options

In October 1995, the Financial Accounting Standards Board issued SFAS No.
123, Accounting for Stock-Based Compensation. This Statement will be effective
in fiscal 1998 upon the establishment of the Stock Incentive Plan by the Company
in connection with the Offerings. The Company will adopt only the disclosure
provision of SFAS No. 123 and account for stock-based compensation in

F-12
106

POLO RALPH LAUREN CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, EXCEPT WHERE OTHERWISE INDICATED)

accordance with Accounting Principles Board Opinion No. 25, Accounting for Stock
Issued to Employees, which recognizes compensation cost based on the intrinsic
value of the equity instrument awarded.

3. INVENTORIES

MARCH 30, MARCH 29,
1996 1997
--------- ---------

Raw materials.............................................. $ 52,993 $ 32,781
Work-in-process............................................ 13,302 5,788
Finished goods............................................. 202,818 183,578
-------- --------
$ 269,113 $ 222,147
======== ========

Inventories of $83,243 and $93,874 at March 30, 1996 and March 29, 1997,
respectively, were valued utilizing the retail method and are included in
finished goods.

4. PROPERTY AND EQUIPMENT

MARCH 30, MARCH 29,
1996 1997
--------- ---------

Land....................................................... $ 656 $ 656
Furniture and fixtures..................................... 25,050 54,415
Machinery and equipment.................................... 18,451 18,567
Leasehold improvements..................................... 63,233 78,554
------- -------
107,390 152,192
Less: accumulated depreciation and amortization............ 58,410 68,952
------- -------
$ 48,980 $ 83,240
======= =======

5. INVESTMENT IN AND ADVANCES TO AFFILIATE

Investment in and advances to affiliate reflects the Company's 50% interest
in PRC which was formed in February 1993 to operate Polo stores located
throughout the United States. The Company has guaranteed up to $2.0 million of
PRC's working capital facility. (See Note 13).

Sales by the Company to PRC were $27,313, $38,879 and $40,317 in fiscal
1995, 1996 and 1997, respectively. Purchases by the Company from PRC amounted to
$6,633, $5,715 and $6,709 in fiscal 1995, 1996 and 1997, respectively. At March
30, 1996 and March 29, 1997, the Company had $12,716 and $20,292 due from PRC
which is included in prepaid expenses and other in the accompanying combined
balance sheets.

F-13
107

POLO RALPH LAUREN CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, EXCEPT WHERE OTHERWISE INDICATED)

6. ACCRUED EXPENSES AND OTHER

MARCH 30, MARCH 29,
1996 1997
--------- ---------

Accrued operating expenses................................... $19,798 $26,637
Accrued payroll and benefits................................. 11,279 25,318
Accrued shop-within-shop boutique costs...................... 3,016 9,737
Accrued income taxes......................................... 1,469 2,417
Accrued interest............................................. 1,420 1,416
------- -------
$36,982 $65,525
======= =======

7. FINANCING AGREEMENTS

Long-term debt consists of the following:

MARCH 30, MARCH 29,
1996 1997
--------- ---------

Polo Partnership term loans.................................... $70,000 $60,000
Womenswear term loan........................................... 10,000 9,000
Other.......................................................... 1,914 1,123
------- -------
81,914 70,123
Less: current portion.......................................... 11,765 22,248
------- -------
$70,149 $47,875
======= =======

On October 31, 1994, the Polo Partnership entered into a six year financing
arrangement with commercial banks providing for a $125.0 million revolving
credit facility and $80.0 million in term loans. The revolving credit facility
is available for the issuance of letters of credit, acceptances or direct
borrowings and is limited to a borrowing base calculated on eligible accounts
receivable, certain inventory and letters of credit. Any unused portion of the
available credit line ($48,224 and $103,171 at March 30, 1996 and March 29,
1997, respectively) is subject to a 3/8% commitment fee. Notes and acceptances
payable under this facility amounted to $58,086 and $4,658 at March 30, 1996 and
March 29, 1997, respectively, and bore interest based on either the prime rate
or LIBOR plus 1.75%, as permitted by the agreement (ranging from 5.75% to 8.25%
at March 30, 1996 and from 5.5% to 6.25% at March 29, 1997). The credit facility
and term loans are collateralized by trade wholesale accounts receivable, retail
inventories and assignments of licensing revenue and certain trademarks.

In fiscal 1996, Womenswear entered into a five year financing arrangement
with a financial institution providing for a $30.0 million revolving credit
facility and a $10.0 million term loan. The revolving credit facility is
available for the issuance of letters of credit, acceptances or direct
borrowings and is limited to a borrowing base calculated on eligible accounts
receivable, inventory and accrued royalties. Any unused portion of the available
credit line ($8,218 and $11,163 at March 30, 1996 and March 29, 1997,
respectively) is subject to a 3/8% commitment fee. Notes and acceptances
payable under this facility amounted to $15,645 and $22,119 at March 30, 1996
and March 29, 1997, respectively, and bore interest at the institution's
reference rate (8.25% at March 30, 1996 and March 29, 1997). The credit facility
is collateralized by substantially all of the assets of Womenswear. In February
1997, Womenswear amended its credit facility to increase its revolving credit
facility to $40.0 million.

F-14
108

POLO RALPH LAUREN CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, EXCEPT WHERE OTHERWISE INDICATED)

The financing agreements contain certain restrictive covenants which, among
other things, require the maintenance of certain financial ratios and set
various limitations on capital expenditures and distributions to partners. The
weighted average interest rate on borrowings under revolving credit facilities
was 8.3%, 8.4% and 7.7% in fiscal 1995, 1996 and 1997, respectively.

The Polo Partnership term loans are repayable semi-annually in April and
October in equal installments of $10.0 million through October 1999 and bear
interest primarily at LIBOR plus 1.75% (ranging from 7.0% to 7.25% at March 30,
1996 and from 6.9% to 8.25% at March 29, 1997).

The Womenswear term loan is repayable quarterly in installments ranging
from $250 to $750 through July 1, 2000, with a final payment due of $1,250 on
September 30, 2000 and bears interest at the institution's reference rate plus
0.5% (8.75% at March 30, 1996 and March 29, 1997).

In connection with the Womenswear credit facility, an entity wholly owned
by Mr. Lauren is required to contribute up to $3.0 million to Womenswear if
Womenswear does not maintain a specified cash flow ratio. Additionally, this
related entity guarantees Womenswear's debt up to $3.0 million under certain
circumstances, inclusive of any payments required under the above cash flow
provision.

At March 29, 1997, maturities of long-term debt were as follows:

FISCAL YEAR
ENDING
------------------------------------------------------------------

1998............................................................ $22,248
1999............................................................ 22,875
2000............................................................ 23,000
2001............................................................ 2,000
-------
$70,123
=======

On June 9, 1997, the Company entered into a new financing arrangement (the
"New Credit Facility") providing for $375.0 million of revolving credit. The
proceeds from the New Credit Facility were used to refinance the Polo
Partnership credit facility and to repay in full approximately $56.6 million of
aggregate borrowings outstanding under the Womenswear credit facility and the
PRC credit facility (see Note 13). If within 30 days of the Reorganization, the
Company successfully completes the Offerings, the New Credit Facility will be
reduced to a $225.0 million revolving credit facility; otherwise, it will
provide for a $225.0 million revolving credit facility and $150.0 million in
term loans. The term loans will be repayable in semi-annual installments ranging
from $10.0 million to $20.0 million. Interest is payable, at the Company's
option, at the lender's Base Rate (as defined) or at the London Interbank
Offered Rate plus an interest margin, as permitted by the agreement. The New
Credit Facility is collateralized by trade accounts receivable and requires,
among other things, the maintenance of restrictive covenants including net worth
and leverage ratios, and sets limitations on indebtedness and incurrences of
liens, and restrictions on sales of assets and transactions with affiliates.

8. SUBORDINATED NOTES

The subordinated notes are payable to Mr. Lauren on April 30, 1997 in the
amount of $20.0 million and to Mr. Lauren and the GS Group on March 1, 2001 in
the aggregate amount of $24.0 million. These notes bear interest at the prime
rate (8.25% and 8.5% at March 30, 1996 and March 29, 1997, respectively) and are
subordinated to the Polo Partnership's credit facility and term

F-15
109

POLO RALPH LAUREN CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, EXCEPT WHERE OTHERWISE INDICATED)

notes. Interest expense on the subordinated notes amounted to $2,514, $3,791 and
$3,632 in fiscal 1995, 1996, and 1997 respectively.

9. INCOME TAXES

The components of the provision for income taxes were as follows:

FISCAL YEAR ENDED
-----------------------------------
APRIL
1, MARCH 30, MARCH 29,
1995 1996 1997
------- --------- ---------

Current:
Federal.......................................... $ 6,761 $ 7,644 $16,649
State and local.................................. 5,235 3,123 6,633
Foreign.......................................... 252 392 460
Deferred........................................... 996 (234) (938)
------ ------- -------
$13,244 $10,925 $22,804
====== ======= =======

The foreign and domestic components of income before income taxes were as
follows:

FISCAL YEAR ENDED
-------------------------------
APRIL MARCH MARCH
1, 30, 29,
1995 1996 1997
------- -------- --------

Domestic.......................................... $66,432 $ 78,445 $113,188
Foreign........................................... 26,986 31,287 26,916
------- ------- --------
$93,418 $109,732 $140,104
======= ======= ========

The provision for income taxes differs from the amounts computed by
applying the statutory Federal income tax rate to income before income taxes
mainly due to the inclusion of entities not subject to Federal income tax in the
combined group. The effective tax rate was 14.2%, 10.0% and 16.3% in fiscal
1995, 1996 and 1997, respectively. The decline in the effective tax rate from
fiscal 1995 to fiscal 1996 is mainly due to the full year benefit of the fiscal
1995 reorganization and formation of limited partnerships. The increase in the
effective tax rate from fiscal 1996 to fiscal 1997 is primarily attributable to
the increase in pre-tax income of C Corporations in relation to total pre-tax
income included in the combined group and subject to Federal and state taxes.

The provision for income taxes differs from the amounts computed by
applying the statutory Federal income tax rate to income before income taxes due
to the following:

FISCAL YEAR ENDED
-----------------------------------
MARCH
APRIL 1, 30, MARCH 29,
1995 1996 1997
-------- -------- ---------

Provision for income taxes at statutory Federal
rate.......................................... $ 32,696 $ 38,406 $ 49,036
Increase (decrease) due to:
Subchapter S and unincorporated entities...... (24,232) (28,575) (29,433)
Foreign income................................ (1,122) (1,009) (2,210)
State and local income taxes, net of Federal
benefit....................................... 5,637 2,072 4,126
Other......................................... 265 31 1,285
-------- -------- --------
$ 13,244 $ 10,925 $ 22,804
======== ======== ========

F-16
110

POLO RALPH LAUREN CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, EXCEPT WHERE OTHERWISE INDICATED)

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
and income tax purposes. The net deferred tax asset at March 30, 1996 and March
29, 1997 amounted to $2,075 and $2,719, respectively, and consisted primarily of
uniform inventory capitalization. Net deferred tax assets are included in
prepaid expenses and other in the accompanying combined balance sheets.

10. FINANCIAL INSTRUMENTS

During fiscal 1995, the Company entered into an interest rate swap
agreement with a commercial bank which expires on October 14, 1999 to hedge
against interest rate fluctuations. The swap agreement effectively converts the
outstanding balance of the Polo Partnership's term loans from variable rate
borrowings to fixed rate obligations. Under the terms of this agreement, the
Company makes payments at a fixed rate of 6.955% and receives payments from the
counterparty based on the notional amount ($60.0 million at March 29, 1997),
adjusted for scheduled loan repayments, based on LIBOR. The net interest paid or
received on this arrangement is included in interest expense. The fair value of
this agreement, based on the estimated amount that the Company would pay to
terminate the agreement was $1,559 and $562 at March 30, 1996 and March 29,
1997, respectively. The fair value information has been obtained from a
financial institution.

The Company from time to time enters into forward foreign exchange
contracts as hedges relating to identifiable currency positions to reduce the
risk from exchange rate fluctuations. Gains and losses on these contracts are
deferred and recognized as adjustments to the bases of those assets. Such gains
and losses were not material.

At March 30, 1996, the Company had a forward foreign exchange contract
outstanding with Goldman, Sachs & Co. (GS & Co.) to deliver 593 million yen on
April 17, 1996. At March 29, 1997, the Company had a forward foreign exchange
contract outstanding with GS & Co. to deliver 825 million yen on April 15, 1997
in exchange for $8,083. These contracts are hedges relating to foreign licensing
revenues. The fair value of these contracts approximated carrying value due to
their short-term maturities.

The Company is exposed to credit losses in the event of nonperformance by
the counterparties to the interest rate swap agreement and forward foreign
exchange contract, but it does not expect any counterparties to fail to meet
their obligation given their high-credit rating.

The carrying amounts of financial instruments reported on the combined
balance sheet at March 30, 1996 and March 29, 1997 approximated their estimated
fair values primarily due to either the short-term maturity of the instruments
or their adjustable market rate of interest. Considerable judgment is required
in interpreting certain market data to develop estimated fair values for certain
financial instruments. Accordingly, the estimates presented herein are not
necessarily indicative of the amounts that the Company could realize in a
current market exchange.

11. EMPLOYEE BENEFITS

Profit Sharing Retirement Savings Plans

The Company sponsors two defined contribution benefit plans covering
substantially all eligible non-union U.S. employees which include a savings plan
feature under Section 401(k) of the Internal Revenue Code. The Company makes
discretionary contributions to the plans and contributes an amount equal to 50%
of the first 6% of an employee's contribution. Under the terms of the plans, a
participant is 100% vested in the Company's matching and discretionary
contributions after seven

F-17
111

POLO RALPH LAUREN CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, EXCEPT WHERE OTHERWISE INDICATED)

years of credited service. Contributions under these plans approximated $4,041,
$4,557 and $4,990 in fiscal 1995, 1996 and 1997, respectively.

Union Pension

Womenswear participates in a multi-employer pension plan and is required to
make contributions to the International Ladies Garment Workers' Union (the
"Union") for dues based on wages paid to union employees. A portion of such dues
are allocated by the Union to a Retirement Fund which provides defined benefits
to substantially all unionized workers. Womenswear does not participate in the
management of the plan and has not been furnished with any information with
respect to the type of benefits provided, vested and nonvested benefits or plan
assets. Union expense amounted to $186 and $638 in fiscal 1996 and 1997,
respectively.

Under the Employee Retirement Income Security Act of 1974, as amended, an
employer, upon withdrawal from or termination of a multi-employer plan, is
required to continue funding its proportionate share of the plan's unfunded
vested benefits. Such withdrawal liability was assumed in conjunction with the
acquisition of certain assets from RLW (see Note 1). Womenswear has no current
intention of withdrawing from the plan.

Deferred Compensation

The Company has deferred compensation arrangements for certain key
executives which generally provide for payments upon retirement or death. The
amounts accrued under these plans were $7,469 and $10,532 at March 30, 1996 and
March 29, 1997, respectively. Total compensation expense recorded was $1,402,
$2,094 and $3,229 in fiscal 1995, 1996 and 1997, respectively. The Company funds
these obligations through the issuance of officers' life insurance policies and
the establishment of trust accounts on behalf of the executives participating in
the plans. The cash surrender value of the life insurance policies and trust
accounts are reflected in other assets in the accompanying combined balance
sheets.

12. COMMITMENTS AND CONTINGENCIES

Leases

The Company leases office, warehouse and retail space and office equipment
under operating leases which expire through 2021. As of March 29, 1997,
aggregate minimum annual rental payments under noncancelable operating leases
were as follows:

FISCAL YEAR ENDING
-----------------------------------------------------------------

1998........................................................... $ 45,884
1999........................................................... 43,658
2000........................................................... 37,047
2001........................................................... 33,644
2002........................................................... 29,012
Thereafter..................................................... 185,299
--------
$374,544
========

Rent expense charged to operations was $28,393, $34,483 and $37,091, net of
sublease income of $2,129, $2,091 and $2,146, respectively, in fiscal 1995, 1996
and 1997, respectively. Substantially all outlet and retail store leases provide
for contingent rentals based upon sales and require the Company to pay taxes,
insurance and occupancy costs. Certain rentals are based solely

F-18
112

POLO RALPH LAUREN CORPORATION

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, EXCEPT WHERE OTHERWISE INDICATED)

on a percentage of sales and one significant lease requires a fair market value
adjustment at January 1, 2004. Contingent rental charges included in rent
expense were $2,828, $3,160 and $3,707 in fiscal 1995, 1996 and 1997,
respectively.

Letters of Credit

At March 29, 1997, the Company is contingently liable for unexpired bank
letters of credit of $17,260 related to commitments for the purchase of
inventories and in connection with its leases.

Employment Agreements

The Company is party to employment agreements with certain executives which
provide for compensation and certain other benefits. The agreements also provide
for severance payments under certain circumstances.

Legal Matters

The Company is from time to time involved in routine legal claims,
involving trademark and intellectual property, licensing, employee relations and
other matters incidental to its business. Currently, the Company is a party to
an arbitration proceeding which it initiated in San Francisco to resolve a
dispute with an independent freestanding retail licensee which operates a Polo
store in Beverly Hills, California. This licensee had previously claimed that
the Company breached its license agreement when the Company refused last year to
authorize the opening of a free-standing Polo concession at Los Angeles
International Airport by the licensee. The Company believes it was acting within
its contractual rights when it rejected the licensee's proposal. The Company
initiated the arbitration proceeding in November 1996 under the rules of the
American Arbitration Association in accordance with the terms of its licensing
agreement for a declaration of rights under such agreement. The licensee in a
counterclaim has sought compensatory and punitive damages in excess of $5.0
million. In the opinion of the Company's management, the resolution of any
matter currently pending will not have a material effect on its financial
condition or results of operations.

13. SUBSEQUENT EVENT

On March 21, 1997, the Company entered into purchase agreements with
certain third parties to acquire the remaining 50% interest in PRC, effective
April 3, 1997, for consideration aggregating approximately $10.4 million ("PRC
Acquisition"), which will be completed simultaneously with the Offerings. The
PRC Acquisition will be accounted for as a purchase and the Company will
consolidate the operations of PRC from the effective date of the acquisition.

Effective March 31, 1997, the Company entered into a joint venture
agreement with a nonaffiliated partner to acquire real property in New York
City. The Company and its partners expect to own and operate a concept store and
a restaurant in New York City and are discussing other possible concepts at the
location. Concurrent with the signing of the agreement, the Company made an
initial contribution for its 50% interest in the joint venture in the amount of
$5.0 million. The Company will account for its 50% interest in the joint venture
under the equity method from the effective date of the agreement.

F-19
113

UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, the
Company and the Selling Stockholders have agreed to sell to each of the U.S.
Underwriters named below, and each of such U.S. Underwriters, for whom Goldman,
Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan
Stanley & Co. Incorporated are acting as representatives, has severally agreed
to purchase from the Company and the Selling Stockholders the respective number
of shares of Class A Common Stock set forth opposite its name below:

NUMBER OF SHARES OF
UNDERWRITER CLASS A COMMON STOCK
-------------------------------------------------------- --------------------

Goldman, Sachs & Co. ................................... 4,701,334
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................... 4,701,333
Morgan Stanley & Co. Incorporated....................... 4,701,333
Advest, Inc. ........................................... 261,000
Robert W. Baird & Co. Incorporated...................... 261,000
Bear, Stearns & Co. Inc. ............................... 333,000
William Blair & Company, L.L.C. ........................ 261,000
Blaylock & Partners, L.P. .............................. 117,000
The Buckingham Research Group, Incorporated............. 333,000
Chase Securities Inc. .................................. 333,000
Dain Bosworth Incorporated.............................. 261,000
Dillon, Read & Co. Inc. ................................ 333,000
Donaldson, Lufkin & Jenrette Securities Corporation..... 333,000
A.G. Edwards & Sons, Inc. .............................. 333,000
EVEREN Securities, Inc. ................................ 333,000
Furman Selz LLC......................................... 333,000
Gerard Klauer Mattison & Co., Inc. ..................... 117,000
J.J.B. Hilliard, W.L. Lyons, Inc. ...................... 117,000
Interstate/Johnson Lane Corporation..................... 117,000
Edward D. Jones & Co., L.P. ............................ 261,000
Lazard Freres & Co. LLC................................. 333,000
Legg Mason Wood Walker Incorporated..................... 261,000
Montgomery Securities................................... 333,000
J.P. Morgan Securities, Inc. ........................... 333,000
Principal Financial Securities, Inc. ................... 261,000
Prudential Securities Incorporated...................... 333,000
Rauscher Pierce Refsnes, Inc. .......................... 261,000
Robertson, Stephens & Company LLC....................... 333,000
Roney & Co., LLC........................................ 117,000
Salomon Brothers Inc. .................................. 333,000
Charles Schwab & Co., Inc. ............................. 261,000
Scott & Stringfellow, Inc. ............................. 117,000
Muriel Siebert & Co., Inc. ............................. 117,000
Smith Barney Inc. ...................................... 333,000
Stephens Inc. .......................................... 261,000
Stifel, Nicolaus & Company, Incorporated................ 117,000
Sutro & Co. Incorporated................................ 261,000
Tucker Anthony Incorporated............................. 261,000
Wasserstein Perella Securities, Inc. ................... 333,000
-------
Total......................................... 23,500,000
=======

Under the terms and conditions of the Underwriting Agreement, the U.S.
Underwriters are committed to take and pay for all of the shares offered hereby,
if any are taken. Pursuant to the Underwriting Agreement, the representatives of
the U.S. Underwriters will purchase, on an equal basis, the shares offered on
behalf of the GS Group in the U.S. Offering immediately following the execution
of the Underwriting Agreement, in exchange for notes of the representatives of
the U.S. Underwriters. The notes to be issued to the GS Group will be payable on
the earlier of the closing of the Offerings and 15 days from the date of this
Prospectus. The number of shares each respective

U-1
114

U.S. Underwriter is severally obligated to purchase, as set forth above, will
not be affected by the foregoing arrangements. The representatives of the U.S.
Underwriters will also purchase the shares offered on behalf of the GS Group in
the International Offering under similar arrangements. Each member of the GS
Group has granted to the representatives of the U.S. Underwriters the right to
require such member to purchase, in the event that the Offerings are not
consummated, the shares being purchased by the representatives of the U.S.
Underwriters from such member in the Offerings, for a purchase price consisting
of the assumption of all of the obligations of the U.S. Underwriters under the
note issued to such member.

The U.S. Underwriters propose to offer the shares of Class A Common Stock
in part directly to the public at the initial public offering price set forth on
the cover page of this Prospectus and in part to certain securities dealers at
such price less a concession of $0.85 per share. The U.S. Underwriters may
allow, and such dealers may reallow, a concession not in excess of $0.10 per
share to certain brokers and dealers. After the shares of the Class A Common
Stock are released for sale to the public, the offering price and the other
selling terms may from time to time be varied by the representatives.

The Company and the Selling Stockholders have entered into an underwriting
agreement (the "International Underwriting Agreement") with the underwriters of
the International Offering (the "International Underwriters") providing for the
concurrent offer and sale of shares of Class A Common Stock in an international
offering outside the United States. The offering price and aggregate
underwriting discounts and commissions per share for the two offerings are
identical. The closing of the offering made hereby is a condition to the closing
of the International Offering, and vice versa. The representatives of the
International Underwriters are Goldman Sachs International, Merrill Lynch
International and Morgan Stanley & Co. International Limited.

Pursuant to an agreement between the U.S. and International Underwriting
Syndicates (the "Agreement Between") relating to the two offerings, each of the
U.S. Underwriters named herein has agreed that, as a part of the distribution of
the shares offered hereby and subject to certain exceptions, it will offer, sell
or deliver the shares of Class A Common Stock, directly or indirectly, only in
the United States of America (including the States and the District of
Columbia), its territories, its possessions and other areas subject to its
jurisdiction (the "United States") and to U.S. persons, which term shall mean,
for purposes of this paragraph: (a) any individual who is a resident of the
United States or (b) any corporation, partnership or other entity organized in
or under the laws of the United States or any political subdivision thereof and
whose office most directly involved with the purchase is located in the United
States. Each of the International Underwriters has agreed pursuant to the
Agreement Between that, as a part of the distribution of the shares offered as a
part of the International Offering, and subject to certain exceptions, it will
(i) not, directly or indirectly, offer, sell or deliver shares of Class A Common
Stock (a) in the United States or to any U.S. persons or (b) to any person who
it believes intends to reoffer, resell or deliver the shares in the United
States or to any U.S. persons, and (ii) cause any dealer to whom it may sell
such shares at any concession to agree to observe a similar restriction.

Pursuant to the Agreement Between, sales may be made between the U.S.
Underwriters and the International Underwriters of such number of shares of
Class A Common Stock as may be mutually agreed. The price of any shares so sold
shall be the initial public offering price, less an amount not greater than the
selling concession.

The Company and Mr. Lauren have granted the U.S. Underwriters options
exercisable for 30 days after the date of this Prospectus to purchase up to an
aggregate of 3,525,000 additional shares of Class A Common Stock solely to cover
overallotments, if any. If the U.S. Underwriters exercise their over-allotment
options, the U.S. Underwriters have severally agreed, subject to certain
conditions, to purchase approximately the same percentage thereof that the
number of shares to be purchased by each of them, as shown in the foregoing
table, bears to the 23,500,000 shares of Class A Common Stock offered. The
Company and Mr. Lauren have granted the International Underwriters similar
options to purchase up to an aggregate of 900,000 additional

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shares of Class A Common Stock. If the Underwriters exercise their options but
not in full, the shares to be sold by Mr. Lauren pursuant to such options will
be purchased by the Underwriters prior to any shares to be sold by the Company
pursuant to such options.

The Company, its executive officers and directors and all other holders of
Common Stock, including the Selling Stockholders, have agreed that, during the
period beginning from the date of the Underwriting Agreement and continuing to
and including the date 180 days after the date of this Prospectus, they will not
offer, sell, contract to sell or otherwise dispose of any shares of Class A
Common Stock or any securities of the Company that are substantially similar to
the Class A Common Stock, including but not limited to any securities that are
convertible into or exchangeable for, or that represent the right to receive,
Class A Common Stock or any such substantially similar securities (other than
pursuant to employee or director stock or stock option plans existing on the
date of this Prospectus or in connection with the PRC Acquisition) without the
prior written consent of Goldman, Sachs & Co., as representative of the
Underwriters, except for the shares of Class A Common Stock offered in
connection with the concurrent U.S. Offering and International Offering.

The Underwriters have reserved for sale at the initial public offering
price up to 2,950,000 shares which may be sold to the Company's management
employees, customers and suppliers and other persons associated with the Company
or affiliated with any director, officer or management employee of the Company.
The number of shares available for sale to the general public will be reduced to
the extent any reserved shares are purchased. Any reserved shares not so
purchased will be offered by the Underwriters on the same basis as the other
shares offered hereby.

Prior to the Offerings, there has been no public market for the shares. The
initial public offering price was negotiated among the Company, the Selling
Stockholders and the representatives of the U.S. Underwriters and the
International Underwriters. Among the factors considered in determining the
initial public offering price of the Class A Common Stock, in addition to
prevailing market conditions, were the Company's historical performance,
estimates of the business potential and earnings prospects of the Company, an
assessment of the Company's management and the consideration of the above
factors in relation to market valuation of companies in related businesses.

During and after the Offerings, the Underwriters may purchase and sell the
Class A Common Stock in the open market. These transactions may include
over-allotment and stabilizing transactions and purchases to cover syndicate
short positions created in connection with the Offerings. Stabilizing
transactions consist of certain bids or purchases for the purpose of preventing
or retarding a decline in the market price of the Class A Common Stock; and
syndicate short positions involve the sale by the Underwriters of a greater
number of shares of Class A Common Stock than they are required to purchase from
the Company and the Selling Stockholders in the Offerings. The Underwriters also
may impose a penalty bid, whereby selling concessions allowed to syndicate
members or other broker-dealers in respect of the Class A Common Stock sold in
the offering for their account may be reclaimed by the syndicate if such Class A
Common Stock is repurchased by the syndicate in stabilizing or covering
transactions. These activities may stabilize, maintain or otherwise affect the
market price of the Class A Common Stock, which may be higher than the price
that might otherwise prevail in the open market; and these activities, if
commenced, may be discontinued at any time. These transactions may be effected
on the NYSE, in the over-the-counter market or otherwise.

The Company's Class A Common Stock has been approved for listing, subject
to notice of issuance, on the NYSE under the symbol "RL". In order to meet one
of the requirements for listing the Class A Common Stock on the NYSE, the
Underwriters have undertaken to sell lots of 100 or more shares to a minimum of
2,000 beneficial holders.

The Company and the Selling Stockholders have agreed to indemnify the
several Underwriters against certain liabilities, including liabilities under
the Securities Act.

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116

This Prospectus may be used by Underwriters and dealers in connection with
offers and sales of Class A Common Stock, including shares initially sold in the
International Offering to persons located in the United States.

Under Rule 2720 of the National Association of Securities Dealers, Inc.
(the "NASD") the Company may be deemed an affiliate of Goldman, Sachs & Co. The
Offerings are being conducted in accordance with Rule 2720, which provides that,
among other things, when an NASD member participates in the underwriting of an
affiliate's equity securities, the initial public offering price can be no
higher than that recommended by a "qualified independent underwriter" meeting
certain standards. In accordance with this requirement, Morgan Stanley & Co.
Incorporated, has served in such role and has recommended a price in compliance
with the requirements of Rule 2720. In connection with the Offerings, Morgan
Stanley & Co. Incorporated in its role as qualified independent underwriter has
performed due diligence investigations and reviewed and participated in the
preparation of the Prospectus and the Registration Statement of which this
Prospectus forms a part. In addition, the Underwriters may not confirm sales to
any discretionary account without the prior written approval of the customer.

Mr. Richard A. Friedman, a Managing Director of Goldman, Sachs & Co., is a
director of the Company.

The Chase Manhattan Bank is the agent and a lender under the New Credit
Facility and will receive part of the proceeds of the Offering by reason of the
repayment of amounts due under the New Credit Facility. In addition, The Chase
Manhattan Bank from time to time performs general financing and banking services
for the Company and receives customary compensation in connection with such
services. Chase Securities Inc., an affiliate of The Chase Manhattan Bank, is
one of the Underwriters of the U.S. Offering. See "Use of Proceeds".

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[POLO PLAYER ASTRIDE A HORSE LOGO FOLLOWED BY A LIST OF THE
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