Table	of	Contents

# UNITED	STATES

# SECURITIES	AND	EXCHANGE	COMMISSION

(Mark	One)

# ANNUAL	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934

For	the	fiscal	year	ended	March	28,	2009

o TRANSITION	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934

# POLO	RALPH	LAUREN	CORPORATION

(Exact	name	of	registrant	as	specified	in	its	charter)

Delaware

(State	or	other	jurisdiction	of	incorporation	or	organization)

650	Madison	Avenue,	New	York,	New	York

(Address	of	principal	executive	offices)

(I.R.S.	Employer	Identification	No.)

(Zip	Code)

(Registrant's	telephone	number,	including	area	code)

# Securities	registered	pursuant	to	Section	12(b)	of	the	Act:

Title	of	Each	Class

# Name	of	Each	Exchange	on	Which	Registered

Class	A	Common	Stock,	$.01	par	value New	York	Stock	Exchange

# Securities	registered	pursuant	to	Section	12(g)	of	the	Act:	None

Indicate	by	check	mark	if	the	registrant	is	a	well-known	seasoned	issuer,	as	defined	in	Rule	405	of	the	Securities	Act. Yes	þ		No	o

Indicate	by	check	mark	if	the	registrant	is	not	required	to	file	reports	pursuant	to	Section	13	or	15(d)	of	the	Act.

Indicate	by	check	mark	whether	the	registrant	(1)	has	filed	all	reports	required	to	be	filed	by	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934	during	the	preceding	12	months	(or	for	such	shorter	period	that	the	registrant	as required	to	file	such	reports),	and	(2)	has	been

subject	to	such	filing	requirements	for	the	past	90	days. Yes	þ		No	o

Indicate	by	check	mark	if	disclosure	of	delinquent	filers	pursuant	to	Item	405	of	Regulation	S-K	is	not	contained	herein,	and	will	not	be	contained,	to	the	best	of	registrant's	knowledge,	in	definitive	proxy	or	information	statements incorporated	by	reference	in	Part	III	of	this

Form	10-K	or	any	amendment	to	this	Form	10-K. o

Indicate	by	check	mark	whether	the	registrant	has	submitted	electronically	and	posted	on	its	corporate	Web	site,	if	any,	every	Interactive	Data	File	required	to	be	submitted	and	posted	pursuant	to	Rule	405	of	Regulation	S-T	during the	preceding	12	months	(or	for	such	shorter	period

that	the	registrant	was	required	to	submit	and	post	such	files). Yes	o		No	o

Indicate	by	check	mark	whether	the	registrant	is	a	large	accelerated	filer,	an	accelerated	filer,	a	non-accelerated	filer,	or	a	smaller	reporting	company.	See	the	definitions	of	"large	accelerated	filer,"	"accelerated	filer"	and	"smaller reporting	company"	in	Rule	12b-2	of	the	Exchange	Act.

Large	accelerated	filer þ

Non-accelerated	filer o	(Do	not	check	if	a	smaller	reporting	company)

Accelerated	filer	o

Smaller	reporting	company	o

Indicate	by	check	mark	whether	the	registrant	is	a	shell	company	(as	defined	in	Rule	12b-2	of	the	Act). Yes	o		No	þ

The	aggregate	market	value	of	the	registrant's	voting	stock	held	by	non-affiliates	of	the	registrant	was	approximately	$3,972,057,317	as	of	September	27,	2008,	the	last	business	day	of	the	registrant's	most	recently	completed second	fiscal	quarter.

Part	III	incorporates	information	from	certain	portions	of	the	registrant's	definitive	proxy	statement	to	be	filed	with	the	Securities	and	Exchange	Commission	within	120	days	after	the	fiscal	year	end	of	March	28,	2009.

# SPECIAL	NOTE	REGARDING	FORWARD-LOOKING	STATEMENTS

Various	statements	in	this	Form	10-K	or	incorporated	by	reference	into	this	Form	10-K,	in	future	filings	by	us	with	the	Securities	and	Exchange	Commission	(the	"SEC"),	in	our	press	releases	and in	oral	statements	made	from	time	to	time	by	us	or	on	our	behalf	constitute	"forward-looking	statements"	within	the	meaning	of	the	Private	Securities	Litigation	Reform	Act	of	1995.	Forward-looking statements	are	based	on	current	expectations	and	are	indicated	by	words	or	phrases	such	as	"anticipate,"	"estimate,"	"expect,"	"project,"	"we	believe,"	"is	or	remains	optimistic,"	"currently	envisions"	and similar	words	or	phrases	and	involve	known	and	unknown	risks,	uncertainties	and	other	factors	which	may	cause	actual	results,	performance	or	achievements	to	be	materially	different	from	the	future results,	performance	or	achievements	expressed	in	or	implied	by	such	forward-looking	statements.	Forward-looking	statements	include	statements	regarding,	among	other	items:

•	our	anticipated	growth	strategies;

•	our	plans	to	continue	to	expand	internationally;

•	the	impact	of	the	global	economic	crisis	on	the	ability	of	our	customers,	suppliers	and	vendors	to	access	sources	of	liquidity;

•	the	impact	of	the	significant	downturn	in	the	global	economy	on	consumer	purchases	of	premium	lifestyle	products	that	we	offer	for	sale;

•	our	plans	to	open	new	retail	stores;

•	our	ability	to	make	certain	strategic	acquisitions	of	certain	selected	licenses	held	by	our	licensees;

•	our	intention	to	introduce	new	products	or	enter	into	new	alliances;

•	anticipated	effective	tax	rates	in	future	years;

•	future	expenditures	for	capital	projects;

•	our	ability	to	continue	to	pay	dividends	and	repurchase	Class	A	common	stock;

•	our	ability	to	continue	to	maintain	our	brand	image	and	reputation;

•	our	ability	to	continue	to	initiate	cost	cutting	efforts	and	improve	profitability;	and

•	our	efforts	to	improve	the	efficiency	of	our	distribution	system.

These	forward-looking	statements	are	based	largely	on	our	expectations	and	judgments	and	are	subject	to	a	number	of	risks	and	uncertainties,	many	of	which	are	unforeseeable	and	beyond	our control.	A	detailed	discussion	of	significant	risk	factors	that	have	the	potential	to	cause	our	actual	results	to	differ	materially	from	our	expectations	is	described	in	Part	I	of	this	Form	10-K	under	the heading	of	"Risk	Factors."	We	undertake	no	obligation	to	publicly	update	or	revise	any	forward-looking	statements,	whether	as	a	result	of	new	information,	future	events	or	otherwise.

# WEBSITE	ACCESS	TO	COMPANY	REPORTS

Our	investor	website	is	http://investor.ralphlauren.com.	We	were	incorporated	in	June	1997	under	the	laws	of	the	State	of	Delaware.	Our	Annual	Reports	on	Form	10-K,	Quarterly	Reports	on Form	10-Q,	Current	Reports	on	Form	8-K	and	amendments	to	those	reports	filed	with	or	furnished	to	the	SEC	pursuant	to	Section	13(a)	or	Section	15(d)	of	the	Securities	Exchange	Act	of	1934	are available	at	our	investor	website	under	the	caption	"SEC	Filings"	promptly	after	we	electronically	file	such	materials	with	or	furnish	such	materials	to	the	SEC.	Information	relating	to	corporate governance	at	Polo	Ralph	Lauren	Corporation,	including	our	Corporate	Governance	Policies,	our	Code	of	Business	Conduct	and	Ethics	for	all	directors,	officers,	and	employees,	our	Code	of	Ethics	for Principal	Executive	Officers	and	Senior	Financial	Officers,	and	information	concerning	our	directors,	Committees	of	the	Board,	including	Committee	charters,	and	transactions	in	Polo	Ralph	Lauren Corporation	securities	by	directors	and	executive	officers,	is	available	at	our	website	under	the	captions	"Corporate	Governance"	and	"SEC	Filings."	Paper	copies	of	these	filings	and	corporate governance	documents	are	available	to	stockholders	without	charge	by	written	request	to	Investor	Relations,	Polo	Ralph	Lauren	Corporation,	625	Madison	Avenue,	New	York,	New	York	10022.

In	this	Form	10-K,	references	to	"Polo,"	"ourselves,"	"we,"	"our,"	"us"	and	the	"Company"	refer	to	Polo	Ralph	Lauren	Corporation	and	its	subsidiaries,	unless	the	context	indicates otherwise.	Due	to	the	collaborative	and	ongoing	nature	of	our	relationships	with	our	licensees,	such	licensees	are	sometimes	referred	to	in	this	Form	10-K	as	"licensing	alliances."	Our	fiscal	year	ends on	the	Saturday	nearest	to	March	31.	All	references	to	"Fiscal	2009"	represent	the	52-week	fiscal	year	ended	March	28,	2009.	All	references	to	"Fiscal	2008"	represent	the	52-week	fiscal	year	ended March	29,	2008.	All	references	to	"Fiscal	2007"	represent	the	52-week	fiscal	year	ended	March	31,	2007.

# PART	I

# Item	1. Business

# General

Polo	Ralph	Lauren	Corporation,	founded	in	1967	by	Ralph	Lauren,	is	a	global	leader	in	the	design,	marketing	and	distribution	of	premium	lifestyle	products,	including	men's,	women's	and children's	apparel,	accessories,	fragrances	and	home	furnishings.	We	believe	that	our	global	reach,	breadth	of	product	and	multi-channel	distribution	is	unique	among	luxury	and	apparel	companies.	We operate	in	three	distinct	but	integrated	segments:	Wholesale,	Retail	and	Licensing.	The	following	tables	show	our	net	revenues	and	operating	profit	(excluding	unallocated	corporate	expenses	and	legal and	restructuring	charges)	by	segment	for	the	last	three	fiscal	years:

|  | March	28, | March	29, | March	31, |
| :--- | :--- | :--- | :--- |
|  | 2009 | 2008 | 2007 |
|  |  | (millions) |  |
| Net\trevenues: |  |  |  |
| Wholesale | $2,887.2 | $2,758.1 | $2,315.9 |
| Retail | 1,936.5 | 1,912.6 | 1,743.2 |
| Licensing | 195.2 | 209.4 | 236.3 |
| Total\tnet\trevenues | $5,018.9 | $4,880.1 | $4,295.4 |

|  | March	28, | March	29, | March	31, |
| :--- | :--- | :--- | :--- |
|  | 2009 | 2008 | 2007 |
|  |  | (millions) |  |
| Operating\tincome: |  |  |  |
| Wholesale(a) | $613.3 | $565.4 | $477.8 |
| Retail(a) | 108.2 | 204.2 | 224.2 |
| Licensing | 103.6 | 96.7 | 141.6 |
|  | 825.1 | 866.3 | 843.6 |
| Less: |  |  |  |
| Unallocated\tcorporate\texpenses(a) | (206.5) | (217.0) | (183.4) |
| Unallocated\tlegal\tand\trestructuring\tcharges(b) | (23.1) | 4.1 | (7.6) |
| Total\toperating\tincome | $595.5 | $653.4 | $652.6 |

(a) Fiscal	2009	and	Fiscal	2008	included	certain	asset	impairment	charges.	Fiscal	2009	included	asset	impairment	charges	of	$55.4	million,	of	which	$52.0	million	related	to	the	write-down	of	certain Retail	store	assets,	and	$2.8	million	in	the	Wholesale	segment	and	$0.6	million	in	the	Corporate	office	related	to	the	write-down	of	certain	capitalized	software	costs.	Fiscal	2008	included	asset impairment	charges	of	$5.0	million	related	to	the	write-down	of	certain	Retail	store	assets	(see	Note	11	to	the	accompanying	audited	consolidated	financial	statements).

(b) Fiscal	2009	included	certain	unallocated	restructuring	charges	and	legal-related	activity.	Restructuring	charges	for	Fiscal	2009	consisted	of	$23.6	million,	of	which	$12.7	million	related	to	the Retail	segment,	$7.3	million

related	to	the	Wholesale	segment	and	$3.6	million	related	to	Corporate	operations.	Fiscal	2007	restructuring	charges	of	$4.6	million	primarily	related	to	the	Retail	segment	(see	Note	12	to	the accompanying	audited	consolidated	financial	statements).	Legal-related	activity	related	to	the	Company's	Credit	Card	Matter	(see	Note	16	to	the	accompanying	audited	consolidated	financial statements)	and	consisted	of	the	reversal	of	excess	reserves	in	the	amounts	of	$0.5	million	for	Fiscal	2009	and	$4.1	million	for	Fiscal	2008,	as	well	as	legal	charges	of	$3.0	million	for	Fiscal	2007.

Our	net	revenues	by	geographic	region	for	the	last	three	fiscal	years	are	shown	in	the	table	below.	Note	21	to	our	accompanying	audited	consolidated	financial	statements	included	in	this	Annual Report	on	Form	10-K	contains	additional	segment	and	geographic	area	information.

|  | March	28, | March	29, | March	31, |
| :--- | :--- | :--- | :--- |
|  | 2009 | 2008 | 2007 |
|  |  | (millions) |  |
| Net\trevenues: |  |  |  |
| United\tStates\tand\tCanada | $3,589.3 | $3,653.1 | $3,452.2 |
| Europe | 1,028.4 | 944.7 | 767.9 |
| Japan | 392.6 | 272.4 | 64.6 |
| Other\tregions | 8.6 | 9.9 | 10.7 |
| Total\tnet\trevenues | $5,018.9 | $4,880.1 | $4,295.4 |

Over	the	past	five	fiscal	years,	our	sales	have	grown	to	$5.019	billion	in	Fiscal	2009	from	$3.305	billion	in	Fiscal	2005.	This	growth	has	been	largely	a	result	of	both	our	acquisitions	and	organic growth.	We	have	diversified	our	business	by	channels	of	distribution,	price	point	and	target	consumer,	as	well	as	by	geography.	Our	global	reach	is	one	of	the	broadest	in	the	apparel	industry,	with	Ralph Lauren-branded	merchandise	available	at	approximately	6,100	different	retail	locations	worldwide.	In	addition	to	our	wholesale	distribution,	we	sell	directly	to	customers	throughout	the	world	via	326 full-price	and	factory	retail	stores	and	our	e-commerce	websites,	RalphLauren.com	and	Rugby.com.

We	continue	to	invest	in	our	business.	In	the	past	five	fiscal	years,	we	have	invested	approximately	$2.0	billion	for	acquisitions	and	capital	improvements,	primarily	through	strong	operating	cash flow.	We	intend	to	continue	to	execute	our	long-term	strategy	of	expanding	our	presence	internationally,	extending	our	direct-to-consumer	reach,	and	expanding	our	accessories	and	other	product offerings.	See	Item	7	—	"Overview	—	Our	Objectives	and	Risks"	for	further	discussion	of	the	Company's	long-term	strategy.

We	have	been	controlled	by	the	Lauren	family	since	the	founding	of	our	Company.	As	of	March	28,	2009,	Mr.	Ralph	Lauren,	or	entities	controlled	by	Mr.	Ralph	Lauren,	owned	approximately 86%	of	the	voting	power	of	the	outstanding	common	stock	of	the	Company.

# Seasonality	of	Business

Our	business	is	typically	affected	by	seasonal	trends,	with	higher	levels	of	wholesale	sales	in	our	second	and	fourth	quarters	and	higher	retail	sales	in	our	second	and	third	quarters.	These	trends result	primarily	from	the	timing	of	seasonal	wholesale	shipments	and	key	vacation	travel,	back-to-school	and	holiday	shopping	periods	in	the	Retail	segment.	As	a	result	of	the	growth	and	other	changes in	our	business,	along	with	changes	in	consumer	spending	patterns	and	the	macroeconomic	environment,	historical	quarterly	operating	trends	and	working	capital	requirements	may	not	be	indicative	of future	performances.	In	addition,	fluctuations	in	sales,	operating	income	and	cash	flows	in	any	fiscal	quarter	may	be	affected	by,	among	other	things,	the	timing	of	seasonal	wholesale	shipments	and	other events	affecting	retail	sales.

Working	capital	requirements	vary	throughout	the	year.	Working	capital	typically	increases	during	the	first	half	of	the	fiscal	year	as	inventory	builds	to	support	peak	shipping/selling	periods	and, accordingly,	typically	decreases	during	the	second	half	of	the	fiscal	year	as	inventory	is	shipped/sold.	Cash	provided	by	operating

activities	is	typically	higher	in	the	second	half	of	the	fiscal	year	due	to	higher	net	income	and	reduced	working	capital	requirements	during	that	period.

# Recent	Developments

# Agreement	to	Acquire	Southeast	Asia	Licensed	Operations

In	February	2009,	the	Company	entered	into	an	agreement	with	Dickson	Concepts	International	Limited	("Dickson")	to	assume	direct	control	of	its	Polo-branded	licensed	apparel	businesses	in Southeast	Asia	effective	January	1,	2010	in	exchange	for	a	payment	of	$20	million	and	certain	other	consideration.	Dickson	is	currently	the	Company's	licensee	for	Polo-branded	apparel	in	the	Southeast Asia	region,	which	is	comprised	of	China,	Hong	Kong,	Indonesia,	Malaysia,	the	Philippines,	Singapore,	Taiwan	and	Thailand.	In	connection	with	this	agreement,	the	Company	entered	into	a	one-year extension	of	its	underlying	sub-license	agreement	with	Dickson,	which	was	originally	scheduled	to	expire	on	December	31,	2008.	The	transaction	is	subject	to	certain	customary	closing	conditions.

# Japanese	Childrenswear	and	Golf	Acquisition

On	August	1,	2008,	in	connection	with	the	transition	of	the	Polo-branded	childrenswear	and	golf	apparel	businesses	in	Japan	from	a	licensed	to	a	wholly	owned	operation,	the	Company	acquired certain	net	assets	(including	inventory)	from	Naigai	Co.	Ltd.	("Naigai")	in	exchange	for	a	payment	of	approximately	¥2.8	billion	(approximately	$26	million	as	of	the	acquisition	date)	and	certain	other consideration	(the	"Japanese	Childrenswear	and	Golf	Acquisition").	The	Company	funded	the	Japanese	Childrenswear	and	Golf	Acquisition	with	available	cash	on-hand.	Naigai	was	the	Company's licensee	for	childrenswear,	golf	apparel	and	hosiery	under	the	Polo	by	Ralph	Lauren	and	Ralph	Lauren	brands	in	Japan.	In	conjunction	with	the	Japanese	Childrenswear	and	Golf	Acquisition,	the Company	also	entered	into	an	additional	5-year	licensing	and	design-related	agreement	with	Naigai	for	Polo	and	Chaps-branded	hosiery	in	Japan	and	a	transition	services	agreement	for	the	provision	of	a variety	of	operational,	human	resources	and	information	systems-related	services	over	a	period	of	up	to	eighteen	months	from	the	date	of	the	closing	of	the	transaction.

The	results	of	operations	for	the	Polo-branded	childrenswear	and	golf	apparel	businesses	in	Japan	have	been	consolidated	in	the	Company's	results	of	operations	commencing	August	2,	2008.

# Our	Brands	and	Products

Since	1967,	our	distinctive	brand	image	has	been	consistently	developed	across	an	expanding	number	of	products,	price	tiers	and	markets.	Our	brands,	which	include	apparel,	accessories	and fragrance	collections	for	men	and	women	as	well	as	childrenswear	and	home	furnishings,	comprise	one	of	the	world's	most	widely	recognized	families	of	consumer	brands.	Reflecting	a	distinctive American	perspective,	we	have	been	an	innovator	in	aspirational	lifestyle	branding	and	believe	that,	under	the	direction	of	internationally	renowned	designer	Ralph	Lauren,	we	have	had	a	considerable influence	on	the	way	people	dress	and	the	way	that	fashion	is	advertised	throughout	the	world.	We	combine	consumer	insight	with	our	design,	marketing	and	imaging	skills	to	offer,	along	with	our licensing	alliances,	broad	lifestyle	product	collections	with	a	unified	vision:

•	Apparel	—	Products	include	extensive	collections	of	men's,	women's	and	children's	clothing;

•	Accessories	—	Products	encompass	a	broad	range,	including	footwear,	eyewear,	watches,	jewelry,	hats,	belts	and	leathergoods,	including	handbags	and	luggage;

•	Home	—	Coordinated	products	for	the	home	include	bedding	and	bath	products,	furniture,	fabric	and	wallpaper,	paint,	tabletop	and	giftware;	and

•	Fragrance	—	Fragrance	products	are	sold	under	our	Romance,	Polo,	Lauren,	Safari,	Ralph	and	Black	Label	brands,	among	others.

Our	lifestyle	brand	image	is	reinforced	by	our	RalphLauren.com	and	Rugby.com	internet	sites.

# Ralph	Lauren	Purple	Label

A	contemporary	take	on	traditional	bespoke	tailoring,	Ralph	Lauren	Purple	Label	is	the	ultimate	expression	of	modern	elegance	for	men.	From	precisely	tailored	Made-to-Measure	suits	to sophisticated	sportswear,	Purple	Label	reflects	an	impeccable	sense	of	the	dashing	and	refined,	fashioned	from	exclusive,	limited-edition	fabrics	of	the	highest	quality	and	expertly	crafted	in	the	spirit	of Savile	Row	tailoring.	Ralph	Lauren	Purple	Label	also	offers	Made-to-Order	dress	furnishings,	accessories,	luggage	and	benchmade	footwear,	as	well	as	hand	monogramming	and	custom	engraving services.	Ralph	Lauren	Purple	Label	competes	with	the	finest	men's	hand-tailored	clothing	lines.	Ralph	Lauren	Purple	Label	is	available	primarily	in	Ralph	Lauren	stores,	but	is	also	available	through specialty	stores,	fine	department	stores	and	online	at	RalphLauren.com.

# Ralph	Lauren	Black	Label	for	Men

Reflecting	a	sharp,	modern	attitude,	Ralph	Lauren	Black	Label	is	the	essence	of	sophisticated	dressing	for	men.	Featuring	razor-sharp	tailoring	and	dramatically	lean	silhouettes,	classic	suitings and	sportswear	are	infused	with	a	savvier	attitude	for	a	look	that	is	at	once	modern	and	timeless.	Iconic	yet	fresh,	Ralph	Lauren	Black	Label	represents	a	new	chapter	in	men's	style.	Ralph	Lauren	Black Label	creates	a	unique	niche	among	the	finest	contemporary	tailored	clothing	lines	and	modern	sportswear.	Ralph	Lauren	Black	Label	is	available	in	Ralph	Lauren	stores,	a	limited	selection	of	specialty stores	and	better	department	stores	and	online	at	RalphLauren.com.

# Polo	Ralph	Lauren

Classic	and	authentic,	Polo	is	the	foundation	of	the	world	of	Ralph	Lauren	menswear,	combining	the	time-honored	aesthetic	of	East	Coast	Ivy	League	casual	style	with	proper	English	refinement. Often	imitated	but	never	matched,	Polo	is	the	original	symbol	of	the	preppy	lifestyle.	The	iconic	polo	player	logo	is	recognized	worldwide	as	a	symbol	of	heritage	and	authenticity.	From	classic	favorites such	as	oxford	shirts	and	chino	pants	to	modern	collections	that	combine	heritage	preppy	with	a	chic,	downtown	feel,	Polo	sets	the	standard	for	a	well-worn	look	with	an	aspirational	sensibility,	creating	a comprehensive	line	of	sportswear,	tailored	clothing	and	accessories	to	fulfill	a	man's	every	wardrobe	need.	Polo	leads	the	industry	of	fine	men's	sportswear	brands.	Polo	is	available	in	Ralph	Lauren stores,	department	stores,	specialty	stores	and	RalphLauren.com.	The	Polo	Ralph	Lauren	Denim	collection	features	premium	denim	with	authentic	detailing	and	the	highest	quality	workmanship	in	the tradition	of	Ralph	Lauren.	From	rugged	looks	to	jeans	that	walked	the	runway,	Polo	Ralph	Lauren	Denim	presents	an	extensive	variety	of	superior	fits,	modern	designs	and	innovative	washes.	Polo	Ralph Lauren	Denim	competes	with	premium-quality	designer	collections.	Polo	Ralph	Lauren	Denim	styles	are	available	in	department	stores	and	online	at	RalphLauren.com.

# Lauren	for	Men

Created	to	broaden	the	reach	of	the	Ralph	Lauren	men's	statement,	Lauren	for	Men	conveys	a	spirit	of	tradition	while	recalling	the	sophistication	of	Polo	Ralph	Lauren	menswear.	Classic	and polished,	the	Lauren	men's	line	includes	suits,	sport	coats,	dress	shirts,	dress	pants,	tuxedos,	topcoats	and	ties.	Designed	to	fulfill	every	tailored	clothing	need,	this	comprehensive	line	of	men's	dress	wear competes	with	other	men's	designer	fashion	lines.	Lauren	for	Men	is	available	at	select	department	stores.

# Ralph	by	Ralph	Lauren

The	Ralph	by	Ralph	Lauren	collection	features	suits,	sport	coats,	dress	trousers,	suit	vests	and	top	coats	designed	with	the	classic	style	and	fine	fabrics	for	which	Ralph	Lauren	is	known.	Refined construction	details	—	all	hallmarks	of	better	men's	suitings	—	and	a	range	of	timeless	patterns	and	colors	establish	Ralph	by	Ralph	Lauren	as	a	strong	foundation	for	the	modern	man's	wardrobe.	Ralph by	Ralph	Lauren	is	available	exclusively	at	Dillard's	stores.

# Ralph	Lauren	Collection

The	crown	jewel	of	Ralph	Lauren	womenswear,	Collection	makes	its	dramatic	first	appearance	each	season	on	the	runways	of	New	York,	providing	the	fashion	world	with	the	season's	definitive Ralph	Lauren	style	statement.

Embodying	glamour	and	sophistication,	Collection's	distinctive	couture	sensibility	is	expressed	though	modern	yet	timeless	silhouettes	—	expertly	crafted	from	the	finest	luxury	fabrics	—	reflecting	the epitome	of	bold	femininity	and	rarefied	chic	as	only	Ralph	Lauren	can	express	it.	Ralph	Lauren	Collection	competes	with	the	finest	designer	collections	found	in	Paris,	Milan	and	New	York.	Ralph	Lauren Collection	is	sold	primarily	in	Ralph	Lauren	stores.	Select	pieces	are	also	available	through	specialty	stores,	the	finest	department	stores	and	online	at	RalphLauren.com.

# Ralph	Lauren	Black	Label	for	Women

Sophisticated	and	classic	with	a	modern	edge,	Black	Label	translates	the	luxurious	spirit	of	Ralph	Lauren	Collection	into	a	distinctive,	timeless	collection	of	icons	for	town,	country,	day	and evening.	Created	from	the	finest	materials,	Black	Label	silhouettes	—	elegant	and	striking	—	are	the	cornerstones	of	the	Ralph	Lauren	woman's	wardrobe.	Black	Label	competes	with	the	finest	women's collections	—	the	"gold	tier"	of	wholesale	brands.	Black	Label	is	offered	primarily	in	Ralph	Lauren	stores.	Select	pieces	are	also	available	in	designer	boutiques,	fine	specialty	stores,	better	department stores	and	online	at	RalphLauren.com.

# Ralph	Lauren	Blue	Label

Fresh	and	eclectic	with	a	sexy,	youthful	spirit,	Blue	Label	embodies	the	Ralph	Lauren	sensibility	through	heritage	looks	with	a	chic,	modern	twist.	Whether	reflecting	Ivy	League-inspired	style,	a modern	take	on	proper	English	refinement	or	a	feminine	translation	of	the	rugged	spirit	of	the	American	West,	Blue	Label	creates	a	mix	of	style	that	is	eclectic,	timeless	and	unmistakably	Ralph	Lauren. Blue	Label	occupies	a	unique	niche	in	the	women's	sportswear	market.	Blue	Label	is	offered	in	Ralph	Lauren	stores	in	the	United	States	and	Europe,	RalphLauren.com	and	better	department	stores	in Asia.

# Lauren	by	Ralph	Lauren

Created	to	broaden	the	reach	of	the	Ralph	Lauren	statement	for	women,	Lauren	conveys	a	spirit	of	heritage	and	tradition	while	recalling	the	sophisticated	luxury	of	Black	Label.	Timeless	and perfectly	polished,	Lauren	features	a	wide	range	of	apparel	ideal	for	every	occasion,	including	suits,	sportswear,	dresses,	outerwear,	footwear	and	accessories.	Lauren	Active	infuses	a	country	club sensibility	into	practical	sports	apparel,	creating	fashionable	wardrobe	solutions	for	golf,	tennis,	yoga	or	weekend	wear.	Lauren	competes	with	other	designer	fashion	lines	and	is	sold	in	department	stores nationwide	and	online	at	RalphLauren.com.	Lauren	launched	in	Europe	and	Mexico	in	Spring	2009.

# Lauren	Jeans	Co.

Lauren	presents	a	fresh	perspective	on	the	denim	lifestyle	with	Lauren	Jeans	Co.,	which	is	defined	by	a	breadth	of	styling,	consistent	standard	of	fits	and	signature	collection	of	separates	that	can take	the	Lauren	woman	anywhere.	Lauren	Jeans	Co.	features	a	wide	variety	of	silhouettes,	treatments	and	looks,	adding	a	new	dimension	to	Lauren	style.	Lauren	Jeans	Co.	competes	with	other	designer denim	lines.	Lauren	Jeans	Co.	is	offered	in	department	stores	nationwide	and	online	at	RalphLauren.com.

# Pink	Pony

Pink	Pony	is	Polo	Ralph	Lauren's	worldwide	initiative	in	the	fight	against	cancer.	Pink	Pony	supports	programs	for	early	diagnosis,	education,	treatment	and	research,	and	is	dedicated	to	bringing patient	navigation	and	quality	cancer	care	to	medically	underserved	communities.	A	percentage	of	sales	from	all	Pink	Pony	products	benefits	the	Pink	Pony	Fund.	Pink	Pony	apparel	consists	of	feminine, slim-fitting	women's	sportswear	items	and	accessories	crafted	in	luxurious	fabrics.	Hooded	sweatshirts,	cotton	mesh	polos,	canvas	tote	bags	and	cashmere	yoga	pants	all	feature	our	iconic	pink	Polo Player	—	a	symbol	of	our	commitment	to	the	fight	against	cancer.	Pink	Pony	is	available	at	select	Ralph	Lauren	stores	and	online	at	RalphLauren.com.	To	learn	more	about	Pink	Pony	and	Polo	Ralph Lauren's	other	philanthropic	efforts,	please	visit	RalphLauren.com/Philanthropy.

Embodying	the	cool,	rugged	spirit	of	classic	Western	Americana,	RRL	is	inspired	by	an	authentic	sensibility,	providing	distinctive	designs	and	a	selection	of	vintage	pieces	for	men	and	women. From	weathered	blue	jeans,	distressed	leather	jackets	and	Western	shirts	to	one-of-a-kind	belts	and	cowboy	boots,	RRL	evokes	the	bohemian	freedom	of	the	frontier	borderlands	—	uniquely	Ralph Lauren,	distinctly	American.	RRL	competes	with	a	wide	range	of	new	and	vintage	clothing	lines	that	pique	the	interest	of	collectors	of	unique	American	style.	RRL	is	available	exclusively	at freestanding	RRL	stores	and	select	Ralph	Lauren	stores.

Created	to	answer	the	demands	of	dedicated	athletes	for	superior	high-performance	outfitting,	RLX	provides	gear	that	unites	the	highest	standards	of	quality,	design	and	technology.	The	result	is	a line	of	cutting	edge	athletic	fashion	with	an	unmistakable	respect	for	both	functionality	and	style.	Utilizing	a	network	of	alliances	among	the	RLX	design	team,	world-class	athletes	and	makers	of	the most	innovative	fabrics	available,	RLX	helps	athletes	overcome	the	challenges	encountered	in	disciplines	as	varied	as	wintersports,	tennis,	golf,	sailing	and	cycling.	RLX	competes	with	leading	providers of	fashionable	high-performance	activewear.	The	complete	RLX	Ski	line	is	available	at	the	RLX	flagship	store	in	Aspen,	Colorado.	Select	RLX	products	are	available	at	additional	Ralph	Lauren	stores and	online	at	RalphLauren.com.	The	RLX	Golf	collection	—	proud	to	sponsor	professional	golfer	Luke	Donald	—	is	available	at	select	private	golf	clubs	and	resorts.

# Polo	Golf	and	Ralph	Lauren	Golf

Rooted	in	the	design	heritage	of	Ralph	Lauren,	Polo	Golf	and	Ralph	Lauren	Golf	feature	men's	and	women's	luxury	technical	performance	wear	that	travels	effortlessly	between	the	course	and the	clubhouse.	Polo	Golf	is	a	proud	sponsor	of	pro	golfers	Tom	Watson,	Davis	Love	III	and	Jonathan	Byrd.	Ralph	Lauren	Golf	is	proud	to	sponsor	Morgan	Pressel	—	the	youngest	champion	in	LPGA Tour	history.	Polo	Golf	and	Ralph	Lauren	Golf	collections	compete	with	the	highest-quality	providers	of	men's	and	women's	golf	apparel,	and	are	available	in	the	most	exclusive	private	clubs	and resorts.	The	Golf	collections	are	also	available	at	RalphLauren.com.

# Rugby

Rugby,	a	relatively	new	concept	from	Ralph	Lauren,	is	where	casual	campus	style	meets	downtown	prep	for	a	sensibility	that	is	youthful	and,	at	times,	irreverent.	The	signature	of	the	brand	is	the authentic	rugby	shirt,	a	symbol	of	our	classic,	sporting	heritage.	From	rebellious,	sport-inspired	looks	for	men	to	sharp,	sexy	campus	styles	for	women,	Rugby	embraces	a	lasting	sense	of	timeless individuality	and	offers	apparel	and	accessories	for	everyday	wear	—	from	rugbys,	polos,	chinos	and	oxfords	to	specialty	pieces	such	as	jackets,	denim,	dresses	and	outerwear,	all	pushed	to	the	edge	of prep.	Launched	in	2004,	the	Rugby	collections	are	available	at	Rugby	stores	throughout	the	United	States,	with	a	flagship	at	99	University	Place	in	New	York	City,	and	online	at	Rugby.com.

# Ralph	Lauren	Childrenswear

Reflecting	the	signature	spirit	of	Ralph	Lauren,	our	children's	collections	provide	timeless	style	for	kids	of	all	ages	—	from	Layette	to	Toddler	to	Girls	size	16	and	Boys	size	20.	Featuring seasonal	looks	as	well	as	the	full	range	of	classic	Ralph	Lauren	styles	—	including	classic	polos,	oxford	shirts,	navy	blazers	and	our	luxurious	cashmere	—	Ralph	Lauren	Childrenswear	brings	style	to everyday	dressing	and	special	occasions.	Ralph	Lauren	Childrenswear	leads	the	industry	in	fine	designer	clothing	for	children.	Ralph	Lauren	Childrenswear	can	be	found	in	select	Ralph	Lauren	stores, better	department	stores	and	online	at	RalphLauren.com.

# Accessories

In	addition	to	his	apparel,	fragrance	and	home	collections,	Ralph	Lauren	has	created	a	wide	array	of	accessories	and	dress	furnishings	that	reflect	his	vision	of	timeless	elegance.	Each	Ralph Lauren	women's	collection	features	handbags,	scarves,	belts,	sunglasses,	watches,	jewelry	and	footwear	fashioned	from	the	most	luxurious	materials	in	the	world	with	exquisitely	crafted	hardware	and finishing	touches.	Men's	furnishings,	including	sunglasses,	watches,	neckwear,	footwear,	leathergoods,	luggage,	cuff	links	and	formalwear	accents,	are

similarly	refined.	Ralph	Lauren	Accessories	compete	with	the	finest	international	designer	collections.	Ralph	Lauren	Accessories	are	available	in	Ralph	Lauren	stores,	select	specialty	stores	and	online	at RalphLauren.com.	Eyewear	is	available	in	all	domestic	Ralph	Lauren	stores,	including	the	Ralph	Lauren	Madison	Avenue	Eyewear	store,	select	optical/sunglass	retailers	and	online	at	RalphLauren.com.

# Fragrance

In	1978,	Ralph	Lauren	expanded	his	lifestyle	brand	to	encompass	the	world	of	fragrance,	launching	Lauren	for	women	and	Polo	for	men.	Since	then,	Ralph	Lauren	Fragrance	has	captured	the essence	of	Ralph	Lauren's	men's	and	women's	brands,	from	the	timeless	heritage	of	Lauren	and	Polo	to	the	sophisticated	beauty	of	Polo	Black	for	men	and	Romance	for	women	to	the	modern,	fresh Ralph	fragrances	for	her,	designed	to	appeal	to	a	younger	audience.	Men's	fragrances	include	Safari,	Polo	Sport,	Polo	Blue,	Romance,	Romance	Silver,	Purple	Label,	Explorer,	Polo	Black	and	Double Black.	Women's	fragrances	include	Safari,	Polo	Sport,	Ralph	Lauren	Blue,	Lauren,	Romance,	Ralph,	Ralph	Hot,	Ralph	Rocks	and	Love.	Ralph	Lauren	fragrances	compete	with	better	department	store brands	and	designer	fragrances.	Ralph	Lauren	fragrances	are	available	in	department	stores,	specialty	and	duty	free	stores,	perfumeries	and	online	at	RalphLauren.com.

# Ralph	Lauren	Home

As	the	first	American	designer	to	create	an	all-encompassing	collection	for	the	home,	Ralph	Lauren	presents	a	comprehensive	lifestyle	experience	featuring	complete,	luxurious	worlds	for	the home.	Whether	inspired	by	timeless	tradition	or	reflecting	the	utmost	in	modern	sophistication,	each	of	the	collections	is	distinguished	by	the	enduring	style	and	expert	craftsmanship	of	Ralph	Lauren. The	Home	collections	include	bed	and	bath	linens,	china,	crystal,	silver,	decorative	accessories,	gifts,	garden	and	beach,	as	well	as	lighting,	window	hardware,	furniture,	fabric,	trimmings	and wallcovering.	Ralph	Lauren	Home	competes	with	providers	of	the	finest	home	design	products.	Ralph	Lauren	Home	offers	exclusive	luxury	goods	at	select	Ralph	Lauren	stores,	trade	showrooms	and online	at	RalphLauren.com.	An	assortment	of	items	is	also	available	at	select	department	stores	and	home	specialty	stores.	The	complete	world	of	Ralph	Lauren	Home	can	be	explored	online	at RalphLaurenHome.com.

# Lauren	Home

In	the	spirit	of	Ralph	Lauren	and	impeccably	designed	for	timeless	style,	Lauren	Home	offers	a	wide	array	of	bedding,	bath,	tabletop,	gifts,	decorative	accessories,	floorcovering	and	lighting collections	for	the	well-appointed	home.	Lauren	Home	is	available	in	department	stores,	select	home	specialty	stores	and	at	LaurenHome.com.	Lauren	Spa,	a	refreshing	collection	of	organic	bedding	and bath	launched	in	2007,	is	available	at	select	department	stores	and	online.

# Ralph	Lauren	Paint

Introduced	in	1995,	Ralph	Lauren	Paint	offers	exceptional-quality	interior	paint	ranked	high	in	the	industry	for	performance.	Inspired	by	classic	and	modern	lifestyles	from	the	world	of	Ralph Lauren,	Ralph	Lauren	Paint	features	a	signature	palette	of	over	500	colors	and	a	collection	of	unique	finishes	and	innovative	techniques.	An	extension	of	the	Ralph	Lauren	Home	lifestyle,	Ralph	Lauren Paint	is	an	attainable	product	designed	to	reach	a	broad	yet	selective	audience.	Ralph	Lauren	Paint	is	offered	at	select	specialty	stores	and	The	Home	Depot.	The	complete	color	palette,	paint	how-to's and	a	guide	to	professional	painters	are	online	at	RalphLaurenPaint.com.

# Club	Monaco

Club	Monaco	is	a	dynamic,	international	retail	concept	that	designs,	manufactures	and	markets	its	own	Club	Monaco	clothing	and	accessories.	Each	season,	Club	Monaco	offers	men's	and women's	updated	classics	and	key	fashion	pieces	that	are	the	foundation	of	a	modern	wardrobe.	The	brand's	signature	clean	and	modern	style	gives	classics	an	update	through	great	design	and	a	current sensibility.	Club	Monaco	is	the	lifestyle	destination	for	today's	urban	professional.	Club	Monaco	clothing	and	accessories	are	available	at	Club	Monaco	stores	throughout	North	America	and,	through licensing	arrangements,	in	Hong	Kong,	Seoul	and	Dubai.

# Global	Brand	Concepts

# American	Living

Launched	exclusively	at	JCPenney	in	February	2008,	American	Living	is	a	new	tradition	in	American	style	for	family	and	home,	developed	for	the	JCPenney	customer	by	Polo	Ralph	Lauren's Global	Brand	Concepts.	American	Living	features	menswear,	womenswear,	childrenswear,	accessories	and	home	furnishings	capturing	the	American	spirit	with	modern	style	and	superior	quality.	A complete	lifestyle	brand	for	the	entire	family	and	the	home,	American	Living	mixes	sporty,	iconic	essentials	with	eye-catching	looks	for	a	free-spirited	take	on	contemporary	style	for	every	day.	American Living	is	available	exclusively	at	JCPenney	and	JCP.com.

# Chaps

Chaps	translates	the	classic	heritage	and	timeless	aesthetic	of	Ralph	Lauren	into	an	accessible	line	for	men,	women,	children	and	the	home.	From	casual	basics	designed	for	versatility	and	ease	of wear	to	smart,	finely	tailored	silhouettes	perfect	for	business	and	more	formal	occasions,	Chaps	creates	interchangeable	classics	that	are	both	enduring	and	affordable.	The	Chaps	men's	collection	is available	at	select	department	and	specialty	stores.	The	Chaps	collections	for	women,	children	and	the	home	are	available	only	at	Kohl's	and	Kohls.com.

# Our	Wholesale	Segment

Our	Wholesale	segment	sells	our	products	to	leading	upscale	and	certain	mid-tier	department	stores,	specialty	stores	and	golf	and	pro	shops,	both	domestically	and	internationally.	We	have focused	on	elevating	our	brand	and	improving	productivity	by	reducing	the	number	of	unproductive	doors	within	department	stores	in	which	our	products	are	sold,	improving	in-store	product	assortment and	presentation,	and	improving	full-price	sell-throughs	to	consumers.	As	of	the	end	of	Fiscal	2009,	our	Ralph	Lauren-branded	products	were	sold	through	approximately	6,100	doors	worldwide	and during	Fiscal	2009,	we	invested	approximately	$35	million	in	related	shop-within-shops	primarily	in	domestic	and	international	department	and	specialty	stores.

Department	stores	are	our	major	wholesale	customers	in	North	America.	In	Europe,	our	wholesale	sales	are	a	varying	mix	of	sales	to	both	department	stores	and	specialty	shops,	depending	on	the country.	Our	collection	brands	—	Women's	Ralph	Lauren	Collection	and	Black	Label	and	Men's	Purple	Label	Collection	and	Black	Label	—	are	distributed	through	a	limited	number	of	premier	fashion retailers.	In	addition,	we	sell	excess	and	out-of-season	products	through	secondary	distribution	channels,	including	our	retail	factory	stores.

In	Japan,	our	products	are	distributed	primarily	through	shop-within-shops	at	premiere	department	stores.	The	mix	of	business	is	weighted	to	Polo	Ralph	Lauren	in	Men's	and	Women's	Blue Label.	The	distribution	of	Men's	and	Women's	Black	Label	is	also	expanding	through	shop-within-shop	presentations	in	top	tier	department	stores	across	Japan.

# Worldwide	Distribution	Channels

The	following	table	presents	the	approximate	number	of	doors	by	geographic	location,	in	which	Ralph	Lauren-branded	products	distributed	by	our	Wholesale	segment	were	sold	to	consumers	in our	primary	channels	of	distribution	as	of	March	28,	2009:

(a) In	Asia/Pacific	(excluding	Japan),	our	products	are	distributed	by	our	licensing	partners.

In	addition,	American	Living	and	Chaps-branded	products	distributed	by	our	Wholesale	segment	were	sold	through	approximately	1,700	doors	domestically	as	of	March	28,	2009.

We	have	seven	key	department-store	customers	that	generate	significant	sales	volume.	For	Fiscal	2009,	these	customers	in	the	aggregate	accounted	for	approximately	50%	of	all	wholesale revenues,	with	Macy's,	Inc.	representing	approximately	19%	of	these	revenues.

Our	product	brands	are	sold	primarily	through	their	own	sales	forces.	Our	Wholesale	segment	maintains	its	primary	showrooms	in	New	York	City.	In	addition,	we	maintain	regional	showrooms in	Atlanta,	Chicago,	Dallas,	Los	Angeles,	Milan,	Paris,	London,	Munich,	Madrid	and	Stockholm.

Shop-within-Shops.		As	a	critical	element	of	our	distribution	to	department	stores,	we	and	our	licensing	partners	utilize	shop-within-shops	to	enhance	brand	recognition,	to	permit	more	complete merchandising	of	our	lines	by	the	department	stores	and	to	differentiate	the	presentation	of	products.	Shop-within-shops	fixed	assets	primarily	include	items	such	as	customized	freestanding	fixtures, wall	cases	and	components,	decorative	items	and	flooring.

As	of	March	28,	2009,	we	had	approximately	10,000	shop-within-shops	dedicated	to	our	Ralph	Lauren-branded	wholesale	products	worldwide.	Excluding	significantly	larger	shop-within-shops in	key	department	store	locations,	the	size	of	our	shop-within-shops	typically	ranges	from	approximately	200	to	6,000	square	feet.	We	normally	share	in	the	cost	of	these	shop-within-shops	with	our wholesale	customers.

Basic	Stock	Replenishment	Program.		Basic	products	such	as	knit	shirts,	chino	pants	and	oxford	cloth	shirts	can	be	ordered	at	any	time	through	our	basic	stock	replenishment	programs.	We generally	ship	these	products	within	three-to-five	days	of	order	receipt.

# Our	Retail	Segment

As	of	March	28,	2009,	our	Retail	segment	consisted	of	163	full-price	retail	stores	and	163	factory	stores	worldwide,	totaling	approximately	2.5	million	square	feet,	and	two	e-commerce	websites. The	extension	of	our	direct-to-consumer	reach	is	a	primary	long-term	strategic	goal.	We	opened	16	new	full-price	stores	and	closed	8	full-price	stores	in	Fiscal	2009.	Our	full-price	retail	stores	reinforce the	luxury	image	and	distinct	sensibility	of	our	brands	and	feature	exclusive	lines	that	are	not	sold	in	domestic	department	stores.	We	operated	the	following	full-price	retail	stores	as	of	March	28,	2009:

# Full-Price	Retail	Stores

| Location | Ralph	Lauren | Club	Monaco | Rugby | Total |
| :--- | :--- | :--- | :--- | :--- |
| United\tStates\tand\tCanada | 64 | 66 | 11 | 141 |
| Europe | 18 | — | — | 18 |
| Japan | 1 | — | — | 1 |
| Latin\tAmerica | 3 | — | — | 3 |
| Total | 86 | 66 | 11 | 163 |

•	Ralph	Lauren	stores	feature	the	full-breadth	of	the	Ralph	Lauren	apparel,	accessory	and	home	product	assortments	in	an	atmosphere	reflecting	the	distinctive	attitude	and	luxury	positioning of	the	Ralph	Lauren	brand.	Our	seven	flagship	Ralph	Lauren	stores	showcase	our	upper-end	luxury	styles	and	products	and	demonstrate	our	most	refined	merchandising	techniques.

•	Club	Monaco	stores	feature	updated	fashion	apparel	and	accessories	for	both	men	and	women.	The	brand's	clean	and	updated	classic	signature	style	forms	the	foundation	of	a	modern wardrobe.

•	Rugby	is	a	vertical	retail	format	featuring	an	aspirational	lifestyle	collection	of	apparel	and	accessories	for	men	and	women.	The	brand	is	characterized	by	a	youthful,	preppy	attitude	which resonates	throughout	the	line	and	the	store	experience.

In	addition	to	generating	sales	of	our	products,	our	worldwide	full-price	stores	set,	reinforce	and	capitalize	on	the	image	of	our	brands.	Our	stores	range	in	size	from	approximately	800	to	over 37,500	square	feet.	These	full-price	stores	are	situated	in	major	upscale	street	locations	and	upscale	regional	malls,	generally	in	large	urban	markets.	We	generally	lease	our	stores	for	initial	periods ranging	from	5	to	10	years	with	renewal	options.

We	extend	our	reach	to	additional	consumer	groups	through	our	163	Polo	Ralph	Lauren	factory	stores	worldwide.	During	Fiscal	2009,	we	added	5	new	Polo	Ralph	Lauren	factory	stores,	net.	Our factory	stores	are	generally	located	in	outlet	malls.	We	operated	the	following	factory	retail	stores	as	of	March	28,	2009:

# Factory	Retail	Stores

•	Polo	Ralph	Lauren	domestic	factory	stores	offer	selections	of	our	menswear,	womenswear,	children's	apparel,	accessories,	home	furnishings	and	fragrances.	Ranging	in	size	from approximately	2,700	to	20,000	square	feet,	with	an	average	of	approximately	9,200	square	feet,	these	stores	are	principally	located	in	major	outlet	centers	in	36	states	and	Puerto	Rico.

•	European	factory	stores	offer	selections	of	our	menswear,	womenswear,	children's	apparel,	accessories,	home	furnishings	and	fragrances.	Ranging	in	size	from	approximately	2,300	to 10,500	square	feet,	with	an	average	of	approximately	6,500	square	feet,	these	stores	are	located	in	9	countries,	principally	in	major	outlet	centers.

•	Japanese	factory	stores	offer	selections	of	our	menswear,	womenswear,	children's	apparel,	accessories,	home	furnishings	and	fragrances.	Ranging	in	size	from	approximately	1,500	to 12,000	square	feet,	with	an	average	of	approximately	7,400	square	feet,	these	stores	are	located	in	3	provinces,	principally	in	major	outlet	centers.

Factory	stores	obtain	products	from	our	suppliers,	our	product	licensing	partners	and	our	retail	stores.

# RalphLauren.com	and	Rugby.com

In	addition	to	our	stores,	our	Retail	segment	sells	products	online	through	our	e-commerce	websites,	RalphLauren.com	(http://www.RalphLauren.com)	and	Rugby.com	(http://www.Rugby.com).

RalphLauren.com	offers	our	customers	access	to	the	full	breadth	of	Ralph	Lauren	apparel,	accessories	and	home	products,	allows	us	to	reach	retail	customers	on	a	multi-channel	basis	and reinforces	the	luxury	image	of	our	brands.	RalphLauren.com	averaged	2.9	million	unique	visitors	a	month	and	acquired	approximately	350,000	new	customers,	resulting	in	1.7	million	total	customers	in Fiscal	2009.

In	August	2008,	the	Company	launched	Rugby.com,	its	second	e-commerce	website.	Rugby.com	offers	clothing	and	accessories	for	purchase	—	previously	only	available	at	Rugby	stores	— along	with	style	tips,	unique	videos	and	blog-based	content.	Rugby.com	offers	an	extensive	array	of	Rugby	products	for	young	men	and	women	within	a	full	lifestyle	destination.

# Our	Licensing	Segment

Through	licensing	alliances,	we	combine	our	consumer	insight,	design,	and	marketing	skills	with	the	specific	product	or	geographic	competencies	of	our	licensing	partners	to	create	and	build	new businesses.	We	generally	seek	out	licensing	partners	who:

•	are	leaders	in	their	respective	markets;

•	contribute	the	majority	of	the	product	development	costs;

•	provide	the	operational	infrastructure	required	to	support	the	business;	and

# •	own	the	inventory.

We	grant	our	product	licensees	the	right	to	manufacture	and	sell	at	wholesale	specified	categories	of	products	under	one	or	more	of	our	trademarks.	We	grant	our	international	geographic	area licensing	partners	exclusive	rights	to	distribute	certain	brands	or	classes	of	our	products	and	operate	retail	stores	in	specific	international	territories.	These	geographic	area	licensees	source	products	from us,	our	product	licensing	partners	and	independent	sources.	Each	licensing	partner	pays	us	royalties	based	upon	its	sales	of	our	products,	generally	subject	to	a	minimum	royalty	requirement	for	the	right to	use	the	Company's	trademarks	and	design	services.	In	addition,	licensing	partners	may	be	required	to	allocate	a	portion	of	their	revenues	to	advertise	our	products	and	share	in	the	creative	costs associated	with	these	products.	Larger	allocations	are	required	in	connection	with	launches	of	new	products	or	in	new	territories.	Our	licenses	generally	have	3	to	5-year	terms	and	may	grant	the	licensee conditional	renewal	options.

We	work	closely	with	our	licensing	partners	to	ensure	that	their	products	are	developed,	marketed	and	distributed	so	as	to	reach	the	intended	market	opportunity	and	to	present	consistently	to consumers	worldwide	the	distinctive	perspective	and	lifestyle	associated	with	our	brands.	Virtually	all	aspects	of	the	design,	production	quality,	packaging,	merchandising,	distribution,	advertising	and promotion	of	Ralph	Lauren	products	are	subject	to	our	prior	approval	and	continuing	oversight.	The	result	is	a	consistent	identity	for	Ralph	Lauren	products	across	product	categories	and	international markets.

Approximately	29%	of	our	licensing	revenue	for	Fiscal	2009	was	derived	from	three	licensing	partners:	Luxottica	Group,	S.p.A.	(11%),	L'Oreal	S.A.	(9%)	and	Peerless,	Inc.	(9%).

# Product	Licenses

The	following	table	lists	our	principal	product	licensing	agreements	for	men's	sportswear,	men's	tailored	clothing,	men's	underwear	and	sleepwear,	eyewear	and	fragrances	as	of	March	28,	2009.

The	products	offered	by	these	licensing	partners	are	listed	below.	Except	as	noted	in	the	table,	these	product	licenses	cover	the	U.S.	or	North	America	only.

# International	Licenses

We	believe	that	international	markets	offer	additional	opportunities	for	our	quintessential	American	designs	and	lifestyle	image.	We	work	with	our	international	licensing	partners	to	facilitate international	growth	in	their	respective	territories.	International	expansion/growth	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;

•	the	addition	of	Ralph	Lauren	or	Polo	Ralph	Lauren	stores	in	these	markets;	and

•	the	expansion	and	upgrade	of	shop-within-shop	networks	in	these	markets.

The	following	table	identifies	our	principal	international	area	licensing	partners	(excluding	Ralph	Lauren	Home	and	Club	Monaco	licensees)	for	Fiscal	2009:

* In	February	2009,	we	entered	into	an	agreement	with	Dickson	to	assume	direct	control	of	our	Polo-branded	licensed	apparel	businesses	in	Southeast	Asia	effective	January	1,	2010.	See	"Recent Developments"	for	further	discussion.

Our	international	licensing	partners	acquire	the	right	to	sell,	promote,	market	and/or	distribute	various	categories	of	our	products	in	a	given	geographic	area.	These	rights	may	include	the	right	to own	and	operate	retail	stores.	The	economic	arrangements	are	similar	to	those	of	our	product	licensing	partners.	We	design	licensed	products	either	alone	or	in	collaboration	with	our	domestic	licensing partners.	Our	product	licensees,	whose	territories	do	not	include	the	international	geographic	area	licensees'	territories,	generally	provide	our	international	licensing	partners	with	product	or	patterns, piece	goods,	manufacturing	locations	and	other	information	and	assistance	necessary	to	achieve	product	uniformity,	for	which	they	are	often	compensated	by	these	partners.

As	of	March	28,	2009,	our	international	licensing	partners	operated	90	Ralph	Lauren	stores	and	63	Club	Monaco	stores	and	dedicated	shops.

Together	with	our	licensing	partners,	we	offer	an	extensive	collection	of	home	products	that	draw	upon	and	further	the	design	themes	of	our	other	product	lines,	contributing	to	our	complete lifestyle	concept.	Products	are	sold	under	the	Ralph	Lauren	Home,	Lauren	Ralph	Lauren,	Chaps	and	American	Living	brands	in	three	primary	categories:	bedding	and	bath,	home	décor	and	home improvement.	As	of	March	28,	2009,	we	had	agreements	with	10	domestic	and	2	international	home	product	licensing	partners	and	one	international	home	product	sublicensing	partner.

We	perform	a	broader	range	of	services	for	our	Ralph	Lauren	Home	licensing	partners	than	we	do	for	our	other	licensing	partners.	These	services	include	design,	operating	showrooms,	marketing, advertising	and,	in	some	cases,	sales.	In	general,	the	licensing	partners	manufacture	and	own	the	inventory,	and	ship	the	products.	Our	Ralph	Lauren	Home	licensing	alliances	generally	have	3	to	5-year terms	and	may	grant	the	licensee	conditional	renewal	options.

Ralph	Lauren	Home	products	are	positioned	at	the	upper	tiers	of	their	respective	markets	and	are	offered	at	a	range	of	price	levels.	These	products	are	generally	distributed	through	several channels	of	distribution,	including	department	stores,	specialty	home	furnishings	stores,	interior	design	showrooms,	customer	direct	mail	catalogs,	home	centers	and	the	Internet,	as	well	as	our	own stores.	As	with	our	other	products,	the	use	of	shop-within-shops	is	central	to	our	department	store	distribution	strategy.

The	Ralph	Lauren	Home,	Lauren	Ralph	Lauren,	Chaps	and	American	Living	home	products	offered	by	us	and	our	product	licensing	partners	are:

Tabletop	and	giftware,	table	linens,	placemats,	tablecloths	and

# napkins

Fitz	and	Floyd,	Inc.,	J.C.	Penney	Corp.,	Inc.,	Town	&	Country

# Linen	Corp.,	Kohl's	Department	Stores,	Inc.

Home	Improvement Interior	paints	and	stains	and	broadloom	carpets Akzo	Nobel	Paints	LLC,	Karastan,	a	division	of	Mohawk Carpet	Corporation

WestPoint	Home,	Inc.	offers	a	basic	stock	replenishment	program	that	includes	bath	and	bedding	products,	and	accounted	for	approximately	57%	of	the	net	sales	of	these	Ralph	Lauren	Home products	and	approximately	35%	of	total	Ralph	Lauren	Home	licensing	revenue	in	Fiscal	2009.

# Product	Design

Our	products	reflect	a	timeless	and	innovative	interpretation	of	American	style	with	a	strong	international	appeal.	Our	consistent	emphasis	on	new	and	distinctive	design	has	been	an	important contributor	to	the	prominence,	strength	and	reputation	of	the	Ralph	Lauren	brands.

All	Ralph	Lauren	products	are	designed	by,	or	under	the	direction	of,	Ralph	Lauren	and	our	design	staff,	which	is	divided	into	nine	departments:	Menswear,	Women's	Collection,	Women's Ready	to	Wear,	Dresses,	Children's,	Accessories,	Home,	Club	Monaco	and	Rugby.	We	form	design	teams	around	our	brands	and	product	categories	to	develop	concepts,	themes	and	products	for	each brand	and	category.	Through	close	collaboration	with	merchandising,	sales	and	production	staff,	these	teams	support	all	three	segments	of	our	business	—	Wholesale,	Retail	and	Licensing	—	in	order	to gain	market	and	other	valuable	input.

# Marketing	and	Advertising

Our	marketing	program	communicates	the	themes	and	images	of	our	brands	and	is	an	integral	feature	of	our	product	offering.	Worldwide	marketing	is	managed	on	a	centralized	basis	through	our advertising	and	public	relations	departments	in	order	to	ensure	consistency	of	presentation.

We	create	distinctive	image	advertising	for	all	of	our	products,	conveying	the	particular	message	of	each	brand	within	the	context	of	our	core	themes.	Advertisements	generally	portray	a	lifestyle rather	than	a	specific	item	and	include	a	variety	of	products	offered	by	ourselves	and,	in	some	cases,	our	licensing	partners.	Our	primary	advertising	medium	is	print,	with	multiple	page	advertisements appearing	regularly	in	a	range	of	fashion,	lifestyle	and	general	interest	magazines.	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,	some	product	categories	have	utilized	television	and	outdoor	media	in	their	marketing	programs.	Our	RalphLauren.com	and	Rugby.com e-commerce	websites	present	the	Ralph	Lauren	lifestyle	on	the	Internet	while	offering	the	full	breadth	of	our	apparel,	accessories	and	home	products.

We	advertise	in	consumer	and	trade	publications,	and	participate	in	cooperative	advertising	on	a	shared	cost	basis	with	major	retailers.	In	addition,	we	provide	point-of-sale	fixtures	and	signage	to our	wholesale	customers	to	enhance	the	presentation	of	our	products	at	retail	locations.	We	expensed	approximately	$171	million	related	to	the	advertising	of	our	products	in	Fiscal	2009,	a	decrease	of approximately	9%	from	Fiscal	2008.

When	our	domestic	licensing	partners	are	required	to	spend	an	amount	equal	to	a	percent	of	their	licensed	product	sales	on	advertising,	we	coordinate	the	advertising	placement	on	their	behalf.

We	also	conduct	a	variety	of	public	relations	activities.	Each	of	our	spring	and	fall	womenswear	collections	are	presented	at	major	fashion	shows	in	New	York	City,	which	typically	generate extensive	domestic	and	international	media	coverage.	We	introduce	each	of	the	spring	and	fall	menswear	collections	at	major	fashion	shows	in	cities	such	as	New	York	or	Milan,	Italy.	In	addition,	we organize	in-store	appearances	by	our	models,	certain	professional	golfers	and	sponsors.	We	are	the	first	exclusive	outfitter	for	all	on-court	officials	at	the	Wimbledon	tennis	tournament.	We	are	also	the official	outfitter	of	all	on-court	officials	at	the	U.S.	Open	tennis	tournament.

In	May	2008,	the	Company	entered	into	an	agreement	with	the	U.S.	Olympic	Committee	which	designated	Polo	Ralph	Lauren	as	an	Official	Outfitter	of	the	2008	U.S.	Olympic	and	Paralympic Teams.	Under	this	agreement,	the	Company	designed	the	official	opening	ceremony	and	closing	ceremony	parade	outfits	for	the	U.S.	Olympic	teams	members	at	the	2008	Summer	Olympics	in	China,	in addition	to	an	assortment	of	village	wear	pieces	provided	to	the	athletes	on	the	U.S.	Teams.

In	April	2009,	the	Company	entered	into	a	binding	Letter	of	Intent	("LOI")	with	the	United	States	Olympic	Committee	("USOC")	to	be	the	exclusive	Official	Parade	Outfitter	for	the	2010	and 2012	U.S.	Olympic	and	Paralympic	Teams.	In	addition	to	furnishing	the	Official	Parade	Outfits	for	the	opening	and	closing	ceremonies	of	the	2010	and	2012	Olympic	Games,	the	Company	also	has	the right	to	provide	leisure/village	wear	("Leisure	Wear")	to	the	USOC	Teams	and	to	manufacture,	distribute,	advertise,	promote	and	sell	products	in	the	United	States	which	replicate	the	Parade	Outfits	and Leisure	Wear.

# Sourcing,	Production	and	Quality

We	contract	for	the	manufacture	of	our	products	and	do	not	own	or	operate	any	production	facilities.	Over	350	different	manufacturers	worldwide	produce	our	apparel,	footwear	and	accessories products,	with	no	one	manufacturer	providing	more	than	8%	of	our	total	production	during	Fiscal	2009.	We	source	both	finished	products	and	raw	materials.	Raw	materials	include	fabric,	buttons	and other	trim.	Finished	products	consist	of	manufactured	and	fully	assembled	products	ready	for	shipment	to	our	customers.	In	Fiscal	2009,	less	than	2%,	by	dollar	volume,	of	our	products	were	produced	in the	U.S.,	and	over	98%,	by	dollar	volume,	were	produced	outside	the	U.S.,	primarily	in	Asia,	Europe	and	South	America.	See	"Import	Restrictions	and	other	Government	Regulations"	and	Item	1A	— "Risk	Factors	—	Risks	Related	to	Our	Business	—	Our	business	is	subject	to	risks	associated	with	importing	products."

Most	of	the	businesses	in	our	Wholesale	segment	must	commit	to	manufacture	our	garments	before	we	receive	customer	orders.	We	also	must	commit	to	purchase	fabric	from	mills	well	in advance	of	our	sales.	If	we	overestimate	our	primary	customers'	demand	for	a	particular	product,	we	may	sell	the	excess	in	our	factory	stores	or	sell	the	product	through	secondary	distribution	channels. If	we	overestimate	the	need	for	a	particular	fabric	or	yarn,	that	fabric	or	yarn	may	be	used	in	garments	made	for	subsequent	seasons	or	made	into	past	seasons'	styles	for	distribution	in	our	factory	stores.

Suppliers	operate	under	the	close	supervision	of	our	global	manufacturing	division	and	buying	agents	headquartered	in	Asia,	the	Americas	and	Europe.	All	garments	are	produced	according	to	our specifications.	Production	and	quality	control	staff	in	the	Americas,	Asia	and	Europe	monitor	manufacturing	at	supplier	facilities	in	order	to	correct	problems	prior	to	shipment	of	the	final	product. Procedures	have	been	implemented	under	our	vendor	certification	and	compliance	programs,	so	that	quality	assurance	is	focused	upon	as	early	as	possible	in	the	production	process,	allowing merchandise	to	be	received	at	the	distribution	facilities	and	shipped	to	customers	with	minimal	interruption.

# Competition

Competition	is	very	strong	in	the	segments	of	the	fashion	and	consumer	product	industries	in	which	we	operate.	We	compete	with	numerous	designers	and	manufacturers	of	apparel	and accessories,	fragrances	and	home	furnishing	products,	domestic	and	foreign.	Some	of	our	competitors	may	be	significantly	larger	and	have	substantially	greater	resources	than	us.	We	compete	primarily on	the	basis	of	fashion,	quality	and	service,	which	depend	on	our	ability	to:

•	anticipate	and	respond	to	changing	consumer	demands	in	a	timely	manner;

•	maintain	favorable	brand	recognition;

•	develop	and	produce	high	quality	products	that	appeal	to	consumers;

•	appropriately	price	our	products;

•	provide	strong	and	effective	marketing	support;

•	ensure	product	availability;	and

•	obtain	sufficient	retail	floor	space	and	effectively	present	our	products	at	retail.

See	Item	1A	—	"Risk	Factors	—	Risks	Relating	to	the	Industry	in	Which	We	Compete	—	We	face	intense	competition	in	the	worldwide	apparel	industry."

# Distribution

To	facilitate	distribution	in	the	U.S.,	Ralph	Lauren	products	are	shipped	from	manufacturers	to	a	network	of	distribution	centers	for	inspection,	sorting,	packing	and	shipment	to	retail	customers. This	network	includes	our	distribution	center	in	Greensboro,	North	Carolina,	third	party	logistics	centers	—	primarily	in	Chino	Hills,	California	—	and,	for	Childrenswear	products,	a	leased	distribution center	in	Martinsburg,	West	Virginia.	Our	full-price	store,	factory	store	and	Club	Monaco	shipments	are	distributed	through	this	network.	All	facilities	are	designed	to	allow	for	high	density	cube	storage and	utilize	bar	code	technology	to	provide	inventory	management	and	controls.	European	distribution	has	been	consolidated	into	one	third	party	facility	located	in	Parma,	Italy.	Japan	logistics	have	been consolidated	into	one	third	party	facility	in	Kawasaki.

RalphLauren.com	and	Rugby.com	customer	contact	functions	and	order	fulfillment	are	performed	at	a	leased	facility	in	High	Point,	North	Carolina.

# Management	Information	Systems

Our	management	information	systems	make	the	marketing,	manufacturing,	importing	and	distribution	of	our	products	more	efficient	by	providing,	among	other	things:

•	comprehensive	order	processing;

•	production	information;

•	accounting	information;	and

•	an	enterprise	view	of	information	for	our	marketing,	manufacturing,	importing	and	distribution	functions.

The	point-of-sale	registers	in	conjunction	with	other	systems	in	our	stores	enable	us	to	track	inventory	from	store	receipt	to	final	sale	on	a	real-time	basis.	We	believe	our	merchandising	and financial	systems,	coupled	with	our	point-of-sale	registers	and	software	programs,	allow	for	stock	replenishment,	effective	merchandise	planning	and	real-time	inventory	accounting.	See	Item	1A	— "Risk	Factors	—	Risks	Related	to	Our	Business	—	Certain	legal	proceedings	and	regulatory	matters	could	adversely	impact	our	results	of	operations."

We	also	utilize	an	automated	replenishment	system,	Logility,	to	facilitate	the	processing	of	basic	replenishment	orders	from	our	Retail	segment	and	wholesale	customers,	the	movement	of	goods through	distribution	channels,	and	the	collection	of	information	for	planning	and	forecasting.	We	have	a	collaborative	relationship	with

many	of	our	suppliers	that	enables	us	to	reduce	cash-to-cash	cycles	in	the	management	of	our	inventory.	See	Item	1A	—	"Risk	Factors	—	Risks	Related	to	Our	Business	—	Our	business	could	suffer	if our	computer	systems	and	websites	are	disrupted	or	cease	to	operate	effectively."

# Wholesale	Credit	Control

We	manage	our	own	credit	function.	We	sell	our	merchandise	primarily	to	major	department	stores	and	extend	credit	based	on	an	evaluation	of	the	customer's	financial	condition,	usually	without requiring	collateral.	We	monitor	credit	levels	and	the	financial	condition	of	our	customers	on	a	continuing	basis	to	minimize	credit	risk.	We	do	not	factor	our	accounts	receivables	or	maintain	credit insurance	to	manage	the	risks	of	bad	debts.	Collection	and	deduction	transactional	activities	are	principally	provided	through	a	third	party	service	provider.	Our	bad	debt	expenses	were	approximately $14	million	in	Fiscal	2009,	representing	less	than	1	percent	of	net	revenues	but	higher	than	our	historical	experience	due	largely	to	the	negative	effects	of	the	slowdown	in	the	global	economy	on	the financial	condition	and	liquidity	of	our	customer	base.	See	Item	1A	—	"Risk	Factors	—	Risks	Related	to	Our	Business	—	Our	business	could	be	negatively	impacted	by	any	financial	instability	of	our customers."

# Wholesale	Backlog

We	generally	receive	wholesale	orders	for	apparel	products	approximately	three	to	five	months	prior	to	the	time	the	products	are	delivered	to	stores.	Such	orders	are	generally	subject	to	broad cancellation	rights.	As	of	March	28,	2009,	our	total	backlog	was	$1.289	billion,	compared	to	$1.573	billion	as	of	March	29,	2008.	We	expect	that	substantially	all	of	our	backlog	orders	as	of	March	28, 2009	will	be	filled	within	the	next	fiscal	year.	The	size	of	our	order	backlog	depends	upon	a	number	of	factors,	including	the	timing	of	the	market	weeks	for	our	particular	lines	during	which	a	significant percentage	of	our	orders	are	received,	and	the	timing	of	shipments.	As	a	consequence,	a	comparison	of	the	size	of	our	order	backlog	from	period	to	period	may	not	be	necessarily	meaningful,	nor	may	it be	indicative	of	eventual	shipments.	Nevertheless,	the	decrease	in	our	order	backlog	from	the	prior	year	is	associated	in	part	with	a	reduction	in	customer	orders	relating	to	the	contraction	in	consumer spending	expected	to	continue	during	Fiscal	2010.

# Trademarks

We	own	the	"Polo,"	"Ralph	Lauren",	"Polo	by	Ralph	Lauren	Design"	and	the	famous	polo	player	astride	a	horse	trademarks	in	the	U.S.	and	approximately	100	countries	worldwide.	Other trademarks	that	we	similarly	own	include:

•	"Lauren	Ralph	Lauren";

•	Various	trademarks	pertaining	to	fragrances	and	cosmetics.

Mr.	Ralph	Lauren	has	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	has	the	right	to	engage	in	personal	projects	involving film	or	theatrical	productions	(not	including	or	relating	to	our	business)	through	RRL	Productions,	Inc.,	a	company	wholly	owned	by	Mr.	Lauren.	Any	activity	by	these	companies	has	no	impact	on	us.

Our	trademarks	are	the	subjects	of	registrations	and	pending	applications	throughout	the	world	for	use	on	a	variety	of	items	of	apparel,	apparel-related	products,	home	furnishings,	restaurant	and café	services,	online	services	and	online	publications	and	beauty	products,	as	well	as	in	connection	with	retail	services,	and	we	continue	to	expand	our	worldwide	usage	and	registration	of	related trademarks.	In	general,	trademarks	remain	valid	and	enforceable	as	long	as	the	marks	are	used	in	connection	with	the	related	products	and	services	and	the	required	registration	renewals	are	filed.	We regard	the	license	to	use	the	trademarks	and	our	other	proprietary	rights	in	and	to	the	trademarks	as	extremely	valuable	assets	in	marketing	our	products	and,	on	a	worldwide	basis,	vigorously	seek	to protect	them	against	infringement	(see	Item	3	—	"Legal	Proceedings"	for	further	discussion).	As	a	result	of	the	appeal	of	our	trademarks,	our	products	have	been	the	object	of	counterfeiting.	We	have	a broad	enforcement	program	which	has	been	generally	effective	in	controlling	the	sale	of	counterfeit	products	in	the	U.S.	and	in	major	markets	abroad.

In	markets	outside	of	the	U.S.,	our	rights	to	some	or	all	of	our	trademarks	may	not	be	clearly	established.	In	the	course	of	our	international	expansion,	we	have	experienced	conflicts	with	various third	parties	who	have	acquired	ownership	rights	in	certain	trademarks,	including	"Polo"	and/or	a	representation	of	a	polo	player	astride	a	horse,	which	impede	our	use	and	registration	of	our	principal trademarks.	While	such	conflicts	are	common	and	may	arise	again	from	time	to	time	as	we	continue	our	international	expansion,	we	have	generally	successfully	resolved	such	conflicts	in	the	past	through both	legal	action	and	negotiated	settlements	with	third-party	owners	of	the	conflicting	marks	(see	Item	1A	—	"Risk	Factors	—	Risks	Related	to	Our	Business	—	Our	trademarks	and	other	intellectual property	rights	may	not	be	adequately	protected	outside	the	U.S."	and	Item	3	—	"Legal	Proceedings"	for	further	discussion).	Although	we	have	not	in	the	past	suffered	any	material	restraints	or restrictions	on	doing	business	in	desirable	markets,	we	cannot	assure	that	significant	impediments	will	not	arise	in	the	future	as	we	expand	product	offerings	and	additional	trademarks	to	new	markets.

# Import	Restrictions	and	Other	Government	Regulations

Virtually	all	of	our	merchandise	imported	into	the	U.S.,	Canada,	and	Europe	is	subject	to	duties.	Until	January	1,	2008,	much	of	our	apparel	merchandise	was	also	subject	to	safeguard	quotas. Notwithstanding	quota	elimination,	China's	accession	agreement	for	membership	in	the	WTO	provided	that	WTO	member	countries	(including	the	U.S.,	Canada	and	European	countries)	could	reimpose quotas	on	specific	categories	of	products	in	the	event	it	is	determined	that	imports	from	China	surged	and	threatened	to	create	a	market	disruption	for	such	categories	of	products	(so	called	"safeguard quota	provisions").	Such	safeguard	quotas	were	permissible	through	January	1,	2008.	From	January	1,	2008	through	January	1,	2011,	WTO	member	countries	can	reimpose	merchandise-specific safeguard	quota.	No	such	quotas	are	currently	in	effect.	In	addition,	effective	January	1,	2008,	the	European	Union	agreed	with	China	on	a	new	textile	arrangement	which	imposed	a	double	surveillance licensing	scheme	which	terminated	at	the	end	of	calendar	year	2008.	The	U.S.	and	other	countries	may	also	unilaterally	impose	additional	duties	in	response	to	a	particular	product	being	imported	(from China	or	other	countries)	at	unfairly	traded	prices	that	in	such	increased	quantities	as	to	cause	(or	threaten)	injury	to	the	relevant	domestic	industry	(generally	known	as	"anti-dumping"	actions).	The European	Union	has	imposed	certain	anti-dumping	duties	on	imports	from	China	and	Vietnam	in	certain	footwear	categories.	Canada	currently	also	has	an	anti-dumping	proceeding	on	footwear	under consideration.	If	dumping	is	suspected	in	the	U.S.,	the	U.S.	Government	may	self-initiate	a	dumping	case	on	behalf	of	the	U.S.	textile	industry	which	could	significantly	affect	our	costs.	Furthermore, additional	duties,	generally	known	as	countervailing	duties,	can	also	be	imposed	by	the	U.S.	Government	to	offset	subsidies	provided	by	a	foreign	government	to	foreign	manufactures	if	the	importation of	such	subsidized	merchandise	injures	or	threatens	to	injure	a	U.S.	industry.	Recent	developments	have	now	made	it	possible	to	impose	countervailing	duties	on	products	from	non-market	economies, such	as	China,	which	could	significantly	increase	our	costs.

We	are	also	subject	to	other	international	trade	agreements	and	regulations,	such	as	the	North	American	Free	Trade	Agreement,	the	Central	American	Free	Trade	Agreement	and	the	Caribbean Basin	Initiative.	In	addition,	each	of	the	countries	in	which	our	products	are	sold	has	laws	and	regulations	covering	imports.	Because	the	U.S.	and	the	other	countries	in	which	our	products	are manufactured	and	sold	may,	from	time	to	time,	impose	new	duties,	tariffs,	surcharges	or	other	import	controls	or	restrictions,	including	the	imposition	of	"safeguard	quota,"	or	adjust	presently	prevailing duty	or	tariff	rates	or	levels,	we	maintain	a	program	of	intensive	monitoring	of	import	restrictions	and	opportunities.	We	seek	to	minimize	our	potential	exposure	to	import	related	risks	through,	among other	measures,	adjustments	in	product	design	and	fabrication,	shifts	of	production	among	countries	and	manufacturers,	as	well	as	through	geographical	diversification	of	our	sources	of	supply.

As	almost	all	our	products	are	manufactured	by	foreign	suppliers,	the	enactment	of	new	legislation	or	the	administration	of	current	international	trade	regulations,	executive	action	affecting	textile agreements,	or	changes	in	sourcing	patterns	resulting	from	the	elimination	of	quota	could	adversely	affect	our	operations.	Although	we	generally	expect	that	the	2005	elimination	of	quotas	will	result, over	the	long	term,	in	an	overall	reduction	in	the	cost	of	apparel	produced	abroad,	the	implementation	of	any	"safeguard	quota	provisions"	or	any	"anti-dumping"	or	"countervailing	duty"	actions	may result,	over	the	near	term,	in	cost	increases	and	in	disruption	of	the	supply	chain	for	certain	products	categories.	See	Item	1A	—	"Risk	Factors"	below	for	further	discussion.

Apparel	and	other	products	sold	by	us	are	also	subject	to	regulation	in	the	U.S.	and	other	countries	by	other	governmental	agencies,	including,	in	the	U.S.,	the	Federal	Trade	Commission, U.S.	Fish	and	Wildlife	Service	and	the	Consumer	Products	Safety	Commission,	including	the	recently	enacted	Consumer	Product	Safety	Improvement	Act	("CPSIA")	which	imposes	new	limitations	on the	permissible	amounts	of	lead	and	phthalates	allowed	in	children's	products.	These	regulations	relate	principally	to	product	labeling,	licensing	requirements,	flammability	testing,	and	product	safety particularly	with	respect	to	products	used	by	children.	We	believe	that	we	are	in	substantial	compliance	with	those	regulations,	as	well	as	applicable	federal,	state,	local,	and	foreign	rules	and	regulations governing	the	discharge	of	materials	hazardous	to	the	environment.	We	do	not	estimate	any	significant	capital	expenditures	for	environmental	control	matters	either	in	the	current	year	or	in	the	near future.	Our	licensed	products	and	licensing	partners	are	also	subject	to	regulation.	Our	agreements	require	our	licensing	partners	to	operate	in	compliance	with	all	laws	and	regulations,	and	we	are	not aware	of	any	violations	which	could	reasonably	be	expected	to	have	a	material	adverse	effect	on	our	business	or	results	of	operations.

Although	we	have	not	suffered	any	material	restriction	from	doing	business	in	desirable	markets	in	the	past,	we	cannot	assure	that	significant	impediments	will	not	arise	in	the	future	as	we	expand product	offerings	and	introduce	additional	trademarks	to	new	markets.

# Employees

As	of	March	28,	2009,	we	had	approximately	17,000	employees,	both	full	and	part-time,	consisting	of	approximately	12,000	in	the	U.S.	and	approximately	5,000	in	foreign	countries.	30	of	our U.S.	production	and	distribution	employees	in	the	womenswear	business	are	members	of	UNITE	HERE	(which	was	previously	known	as	the	Union	of	Needletrades,	Industrial	and	Textile	Employees, prior	to	its	merger	with	the	Hotel	Employees	and	Restaurant	Employees	International	Union)	under	an	industry	association	collective	bargaining	agreement,	which	our	womenswear	subsidiary	has adopted.	We	consider	our	relations	with	both	our	union	and	non-union	employees	to	be	good.

# Executive	Officers

The	following	are	our	current	executive	officers	and	their	principal	recent	business	experience:

Ralph	Lauren Age	69 Mr.	Lauren	has	been	Chairman,	Chief	Executive	Officer	and	a	director	of	the Company	since	prior	to	the	Company's	initial	public	offering	in	1997,	and	was	a member	of	the	Advisory	Board	of	the	Board	of	Directors	of	the	Company's predecessors	since	their	organization.	He	founded	Polo	in	1967	and	has	provided leadership	in	the	design,	marketing,	advertising	and	operational	areas	since	such	time. Roger	N.	Farah Age	56 Mr.	Farah	has	been	President,	Chief	Operating	Officer	and	a	director	of	the	Company since	April	2000.	He	was	Chairman	of	the	Board	of	Venator	Group,	Inc.	from December	1994	to	April	2000,	and	was	Chief	Executive	Officer	of	Venator	Group,	Inc. from	December	1994	to	August	1999.	Mr.	Farah	is	a	member	of	the	Board	of	Directors of	Aetna,	Inc.	and	Progressive	Corp. Jackwyn	Nemerov Age	57 Ms.	Nemerov	has	been	Executive	Vice	President	of	the	Company	since	September 2004	and	a	director	of	the	Company	since	February	2007.	From	1998	to	2002,	she	was President	and	Chief	Operating	Officer	of	Jones	Apparel	Group,	Inc. Tracey	T.	Travis Age	46 Ms.	Travis	has	been	Senior	Vice	President	of	Finance	and	Chief	Financial	Officer	of the	Company	since	January	2005.	Ms.	Travis	served	as	Senior	Vice	President,	Finance of	Limited	Brands,	Inc.	from	April	2002	until	August	2004,	and	Chief	Financial Officer	of	Intimate	Brands,	Inc.	from	April	2001	to	April	2002.	Prior	to	that	time,	Ms. Travis	was	Chief	Financial	Officer	of	the	Beverage	Can	Americas	group	at	American National	Can	from	1999	to	2001,	and	held	various	finance	and	operations	positions	at Pepsi	Bottling	Group	from	1989-1999.	Ms.	Travis	is	a	member	of	the	boards	of directors	of	Jo-Ann	Stores,	Inc.	and	the	Lincoln	Center	Theater. Mitchell	A.	Kosh Age	59 Mr.	Kosh	has	served	as	Senior	Vice	President	of	Human	Resources	and	Legal	of	the Company	since	July	2000.	He	was	Senior	Vice	President	of	Human	Resources	of Conseco,	Inc.,	from	February	2000	to	July	2000.	Prior	to	that	time,	Mr.	Kosh	held executive	human	resource	positions	with	the	Venator	Group,	Inc.	starting	in	1996.

# Item	1A. Risk	Factors

There	are	risks	associated	with	an	investment	in	our	securities.	The	following	risk	factors	should	be	read	carefully	in	connection	with	evaluating	our	business	and	the	forward-looking	statements contained	in	this	Annual	Report	on	Form	10-K.	Any	of	the	following	risks	could	materially	adversely	affect	our	business,	our	prospects,	our	operating	results,	our	financial	condition,	the	trading	prices	of our	securities	and	the	actual	outcome	of	matters	as	to	which	forward-looking	statements	are	made	in	this	report.	Additional	risks	that	we	do	not	yet	know	of	or	that	we	currently	think	are	immaterial	may also	affect	our	business	operations.

# Risks	Related	to	Our	Business

# The	loss	of	the	services	of	Mr.	Ralph	Lauren	or	other	key	personnel	could	have	a	material	adverse	effect	on	our	business.

Mr.	Ralph	Lauren's	leadership	in	the	design,	marketing	and	operational	areas	of	our	business	has	been	a	critical	element	of	our	success	since	the	inception	of	our	Company.	The	death	or	disability of	Mr.	Lauren	or	other	extended	or	permanent	loss	of	his	services,	or	any	negative	market	or	industry	perception	with	respect	to	him	or	arising	from	his	loss,	could	have	a	material	adverse	effect	on	our business.	Our	other	executive	officers	and	other	members	of	senior	management	have	substantial	experience	and	expertise	in	our	business	and	have	made	significant	contributions	to	our	growth	and success.	The	unexpected	loss	of	services	of	one	or	more	of	these	individuals	could	also	adversely	affect	us.	We	are	not	protected	by	a	material	amount	of	key-man	or	similar	life	insurance	covering Mr.	Lauren,	our	other	executive	officers	and	certain	other	members	of	senior	management.	We	have	entered	into	employment	agreements	with	Mr.	Lauren	and	our	other	executive	officers,	but	the noncompete	period	with	respect	to	Mr.	Lauren	and	certain	other	executive	officers	could,	in	some	circumstances	in	the	event	of	their	termination	of	employment	with	the	Company,	end	prior	to	the employment	term	set	forth	in	their	employment	agreements.

# Our	business	could	be	negatively	impacted	by	any	financial	instability	of	our	customers.

We	sell	our	wholesale	merchandise	primarily	to	major	department	stores	across	the	U.S.	and	Europe	and	extend	credit	based	on	an	evaluation	of	each	customer's	financial	condition,	usually without	requiring	collateral.	However,	the	financial	difficulties	of	a	customer	could	cause	us	to	curtail	or	eliminate	business	with	that	customer.	We	may	also	assume	more	credit	risk	relating	to	that customer's	receivables.	In	the	aggregate,	our	seven	largest	department-store	customers	constituted	approximately	40%	of	our	gross	trade	accounts	receivable	outstanding	as	of	March	28,	2009	and contributed	approximately	50%	of	all	wholesale	revenues	for	Fiscal	2009.	Our	inability	to	collect	on	our	trade	accounts	receivable	from	any	one	of	these	customers	could	have	a	material	adverse	effect	on our	business	or	financial	condition.	See	Item	1	—	"Business	—	Wholesale	Credit	Control."

# The	current	economic	crisis	could	have	a	negative	impact	on	our	major	customers	and	suppliers	which	in	turn	could	materially	adversely	affect	our	results	of	operations	and	liquidity.

The	current	economic	crisis	is	having	a	significant	negative	impact	on	businesses	around	the	world.	Although	we	believe	that	our	cash	provided	by	operations	and	available	borrowing	capacity under	our	revolving	credit	facility	will	provide	us	with	sufficient	liquidity	through	the	current	economic	crisis,	the	impact	of	this	crisis	on	our	major	customers	and	suppliers	cannot	be	predicted	and	may be	quite	severe.	The	inability	of	major	manufacturers	to	ship	our	products	could	impair	our	ability	to	meet	the	delivery	date	requirements	of	our	customers.	A	disruption	in	the	ability	of	our	significant customers	to	access	liquidity	could	cause	serious	disruptions	or	an	overall	deterioration	of	their	businesses	which	could	lead	to	a	significant	reduction	in	their	future	orders	of	our	products	and	the	inability or	failure	on	their	part	to	meet	their	payment	obligations	to	us,	any	of	which	could	have	a	material	adverse	effect	on	our	results	of	operations	and	liquidity.

# We	cannot	assure	the	successful	implementation	of	our	growth	strategy.

As	part	of	our	growth	strategy,	we	seek	to	extend	our	brands,	expand	our	geographic	coverage	and	increase	direct	management	of	our	brands	by	opening	more	of	our	own	stores,	strategically acquiring	or	integrating	select	licenses	previously	held	by	our	licensees	and	enhancing	our	operations.	Implementation	of	our	strategy	involves	the

continued	expansion	of	our	business	in	Europe,	Asia	and	other	international	areas.	As	discussed	in	Item	1	—	"Business	—	Recent	Developments,"	on	August	1,	2008,	we	acquired	our	previously	licensed childrenswear	and	golf	apparel	businesses	in	Japan.	In	Fiscal	2008,	we	acquired	a	controlling	interest	in	Impact	21	Co.,	Ltd.	("Impact	21")	and	the	remaining	50%	interest	in	Polo	Ralph	Lauren	Japan Corporation	("PRL	Japan").	We	also	acquired	our	previously	licensed	belts	and	leather	goods	business	in	April	2007	and	the	remaining	50%	interest	in	Ralph	Lauren	Media,	LLC	("RL	Media")	in	March 2007.

Also,	as	discussed	in	Item	1	—	"Business	—	Recent	Developments,"	in	February	2009,	we	entered	into	an	agreement	with	Dickson	to	assume	direct	control	of	our	Polo-branded	licensed	apparel businesses	in	Southeast	Asia	effective	January	1,	2010.

We	may	have	difficulty	integrating	acquired	businesses	into	our	operations,	hiring	and	retaining	qualified	key	employees,	or	otherwise	successfully	managing	such	expansion.	Furthermore,	we may	not	be	able	to	successfully	integrate	the	business	of	any	licensee	that	we	acquire	into	our	own	business	or	achieve	any	expected	cost	savings	or	synergies	from	such	integration.

In	Fiscal	2008,	we	launched	American	Living,	a	new	lifestyle	brand	created	exclusively	in	the	U.S.	for	JCPenney.	The	success	of	American	Living	and	the	introduction	of	new	product	categories in	both	the	U.S.	and	overseas	may	be	negatively	impacted	in	Fiscal	2010	by	the	contraction	in	consumer	spending	associated	with	the	current	weakened	global	economic	environment.	See	Item	7	— "Overview	—	Global	Economic	Developments"	for	further	discussion.

Implementation	of	our	growth	strategy	involves	the	continuation	and	expansion	of	our	retail	distribution	network,	both	in	the	U.S.	and	abroad,	which	are	subject	to	many	factors	beyond	our control.	We	may	not	be	able	to	procure,	purchase	or	lease	desirable	free-	standing	or	department	store	locations,	or	renew	and	maintain	existing	free-standing	store	leases	and	department	store	locations on	acceptable	terms,	or	secure	suitable	replacement	locations.	The	lease	negotiation	as	well	as	the	number	and	timing	of	new	stores	actually	opened	during	any	given	period,	and	their	associated contribution	to	net	income	for	the	period,	depends	on	a	number	of	factors	including,	but	not	limited,	to:	(i)	the	availability	of	suitable	financing	to	us	and	our	landlords;	(ii)	the	timing	of	the	delivery	of the	leased	premises	to	us	from	our	landlords	in	order	to	commence	build-out	construction	activities;	(iii)	our	ability	and	our	landlords'	ability	to	obtain	all	necessary	governmental	licenses	and	permits	to construct	and	operate	our	stores	on	a	timely	basis;	(iv)	our	ability	to	manage	the	construction	and	development	costs	of	new	stores;	(v)	the	rectification	of	any	unforeseen	engineering	or	environmental problems	with	the	leased	premises;	(vi)	adverse	weather	during	the	construction	period;	and	(vii)	the	hiring	and	training	of	qualified	operating	personnel	in	the	local	market.	While	we	continue	to	explore new	markets	and	are	always	evaluating	new	potential	locations,	any	of	the	above	factors	could	have	an	adverse	impact	on	our	financial	operations.

In	Europe,	we	lack	the	large	wholesale	distribution	channels	we	have	in	the	U.S.,	and	we	may	have	difficulty	developing	successful	distribution	strategies	and	alliances	in	each	of	the	major European	countries.	In	Japan,	our	primary	mode	of	distribution	is	via	a	network	of	shops	located	within	the	leading	department	stores.	We	may	have	difficulty	in	successfully	retaining	this	network,	and expanding	into	alternate	distribution	channels.	Additionally,	macroeconomic	trends	may	not	be	favorable,	and	could	limit	our	ability	to	implement	our	growth	strategies	in	select	geographies	where	we have	foreign	operations,	such	as	Europe	and	Asia.

# Our	business	could	suffer	as	a	result	of	consolidations,	liquidations,	restructurings	and	other	ownership	changes	in	the	retail	industry.

Several	of	our	department	store	customers,	including	some	under	common	ownership,	account	for	significant	portions	of	our	wholesale	net	sales.	We	believe	that	a	substantial	portion	of	sales	of our	licensed	products	by	our	domestic	licensing	partners,	including	sales	made	by	our	sales	force	of	Ralph	Lauren	Home	products,	are	also	made	to	our	largest	department	store	customers.	In	the aggregate,	our	seven	largest	department-store	customers	accounted	for	approximately	50%	of	our	wholesale	net	sales	during	Fiscal	2009.	There	can	be	no	assurance	that	consolidations,	restructurings, reorganizations	or	other	ownership	changes	in	the	department	store	sector	will	not	have	a	material	adverse	effect	on	our	wholesale	business.

We	typically	do	not	enter	into	long-term	agreements	with	our	customers.	Instead,	we	enter	into	a	number	of	purchase	order	commitments	with	our	customers	for	each	of	our	lines	every	season.	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	or	eliminate	the amount	of	merchandise	purchased	from	us	or	our	licensing	partners;	or	to	change	their	manner	of	doing	business	with	us	or	our	licensing	partners	or	their	new	strategic	and	operational	initiatives, including	their	continued	focus	on	further	development	of	their	"private	label"	initiatives,	could	have	a	material	adverse	effect	on	our	business	or	financial	condition.

# Our	profitability	may	decline	as	a	result	of	increasing	pressure	on	margins.

The	apparel	industry	is	subject	to	significant	pricing	pressure	caused	by	many	factors,	including	intense	competition,	consolidation	in	the	retail	industry,	pressure	from	retailers	to	reduce	the	costs of	products	and	changes	in	consumer	spending	patterns.	These	factors	may	cause	us	to	reduce	our	sales	prices	to	retailers	and	consumers,	which	could	cause	our	gross	margin	to	decline	if	we	are	unable	to appropriately	manage	inventory	levels	and/or	otherwise	offset	price	reductions	with	comparable	reductions	in	our	operating	costs.	If	our	sales	prices	decline	and	we	fail	to	sufficiently	reduce	our	product costs	or	operating	expenses,	our	profitability	will	decline.	This	could	have	a	material	adverse	effect	on	our	results	of	operations,	liquidity	and	financial	condition.

# Certain	legal	proceedings	and	regulatory	matters	could	adversely	impact	our	results	of	operations.

We	are	involved	in	certain	legal	proceedings	and	are	subject	from	time	to	time	to	various	claims	involving	alleged	breach	of	contract	claims,	credit	card	fraud,	security	breaches	in	certain	of	our retail	store	information	systems,	employment	issues,	consumer	matters	and	other	litigations.	Certain	of	these	lawsuits	and	claims,	if	decided	adversely	to	us	or	settled	by	us,	could	result	in	material liability	to	the	Company	or	have	a	negative	impact	on	the	Company's	reputation	or	relations	with	its	employees,	customers,	licensees	or	other	third	parties.	In	addition,	regardless	of	the	outcome	of	any litigation	or	regulatory	proceedings,	such	proceedings	could	result	in	substantial	costs	and	may	require	that	the	Company	devotes	substantial	time	and	resources	to	defend	itself.	Further,	changes	in governmental	regulations	both	in	the	U.S.	and	in	other	countries	where	we	conduct	business	operations	could	have	an	adverse	impact	on	our	results	of	operations.	See	Item	3	—	"Legal	Proceedings"	for further	discussion	of	the	Company's	legal	matters.

# Our	business	could	suffer	if	our	computer	systems	and	websites	are	disrupted	or	cease	to	operate	effectively.

The	Company	relies	heavily	on	its	computer	systems	to	record	and	process	transactions	and	manage	and	operate	our	business.	We	also	utilize	an	automated	replenishment	system	to	facilitate	the processing	of	basic	replenishment	orders	from	our	wholesale	customers,	the	movement	of	goods	through	distribution	channels,	and	the	collection	of	information	for	planning	and	forecasting.	In	addition, we	have	e-commerce	and	other	Internet	websites	in	the	U.S.	Given	the	complexity	of	our	business	and	the	significant	number	of	transactions	that	we	engage	in	on	an	annual	basis,	it	is	imperative	that	we maintain	constant	operation	of	our	computer	hardware	and	software	systems.	Despite	our	preventative	efforts,	our	systems	are	vulnerable	from	time	to	time	to	damage	or	interruption	from,	among	other things,	security	breaches,	computer	viruses	or	power	outages.

# Our	business	is	subject	to	risks	associated	with	importing	products.

As	of	March	28,	2009,	we	source	a	significant	portion	of	our	products	outside	the	U.S.	through	arrangements	with	over	350	foreign	vendors	in	various	countries.	In	Fiscal	2009,	over	98%,	by dollar	value,	of	our	products	were	produced	outside	the	U.S.,	primarily	in	Asia,	Europe	and	South	America.	Risks	inherent	in	importing	our	products	include:

•	quotas	imposed	by	bilateral	textile	agreements	with	China	and	non-WTO	countries.	These	agreements	limit	the	amount	and	type	of	goods	that	may	be	imported	annually	from	these	countries;

•	changes	in	social,	political	and	economic	conditions	or	terrorist	acts	that	could	result	in	the	disruption	of	trade	from	the	countries	in	which	our	manufacturers	or	suppliers	are	located;

•	the	imposition	of	additional	regulations	relating	to	imports	or	exports;

•	the	imposition	of	additional	duties,	taxes	and	other	charges	on	imports	or	exports;

•	significant	fluctuations	of	the	cost	of	raw	materials;

•	significant	delays	in	the	delivery	of	cargo	due	to	security	considerations;

•	the	imposition	of	antidumping	or	countervailing	duty	proceedings	resulting	in	the	potential	assessment	of	special	antidumping	or	countervailing	duties;	and •	the	imposition	of	sanctions	in	the	form	of	additional	duties	either	by	the	U.S.	or	its	trading	partners	to	remedy	perceived	illegal	actions	by	national	governments.

Any	one	of	these	factors	could	have	a	material	adverse	effect	on	our	financial	condition	and	results	of	operations.

# Our	ability	to	conduct	business	in	international	markets	may	be	affected	by	legal,	regulatory,	political	and	economic	risks.

Our	ability	to	capitalize	on	growth	in	new	international	markets	and	to	maintain	the	current	level	of	operations	in	our	existing	international	markets	is	subject	to	risks	associated	with	international operations.	These	include:

•	the	burdens	of	complying	with	a	variety	of	foreign	laws	and	regulations;

•	unexpected	changes	in	regulatory	requirements;	and

•	new	tariffs	or	other	barriers	in	some	international	markets.

We	are	also	subject	to	general	political	and	economic	risks	in	connection	with	our	international	operations,	including:

•	political	instability	and	terrorist	attacks;

•	changes	in	diplomatic	and	trade	relationships;	and

•	general	economic	fluctuations	in	specific	countries	or	markets.

We	cannot	predict	whether	quotas,	duties,	taxes,	or	other	similar	restrictions	will	be	imposed	by	the	U.S.,	the	European	Union,	Asia,	or	other	countries	upon	the	import	or	export	of	our	products	in the	future,	or	what	effect	any	of	these	actions	would	have	on	our	business,	financial	condition	or	results	of	operations.	Changes	in	regulatory,	geopolitical,	social	or	economic	policies	and	other	factors may	have	a	material	adverse	effect	on	our	business	in	the	future	or	may	require	us	to	significantly	modify	our	current	business	practices.

# Our	trademarks	and	other	intellectual	property	rights	may	not	be	adequately	protected	outside	the	U.S.

We	believe	that	our	trademarks	and	other	proprietary	rights	are	extremely	important	to	our	success	and	our	competitive	position.	We	devote	substantial	resources	to	the	establishment	and protection	of	our	trademarks	and	anti-counterfeiting	activities	worldwide.	Significant	counterfeiting	of	our	products	continues,	however,	and	in	the	course	of	our	international	expansion	we	have experienced	conflicts	with	various	third	parties	that	have	acquired	or	claimed	ownership	rights	in	some	trademarks	that	include	Polo	and/or	a	representation	of	a	polo	player	astride	a	horse,	or	otherwise have	contested	our	rights	to	our	trademarks.	We	have	in	the	past	resolved	certain	of	these	conflicts	through	both	legal	action	and	negotiated	settlements,	none	of	which,	we	believe,	has	had	a	material impact	on	our	financial	condition	and	results	of	operations.	We	cannot	guarantee	that	the	actions	we	have	taken	to	establish	and	protect	our	trademarks	and	other	proprietary	rights	will	be	adequate	to prevent	counterfeiting	or	a	material	adverse	effect	on	our	business	or	brands	arising	from	imitation	of	our	products	by	others	or	to	prevent	others	from	seeking	to	block	sales	of	our	products	as	a	violation of	the	trademarks	and	proprietary	rights	of	others.	Also,	there	can	be	no	assurance	that	others	will	not	assert	rights	in,	or	ownership	of,	trademarks	and	other	proprietary	rights	of	ours	or	that	we	will	be able	to	successfully	resolve	these	types	of	conflicts	to	our	satisfaction	or	at	all.	In	addition,	the	laws	of	certain	foreign	countries	do	not	protect	proprietary	rights	to	the	same	extent	as	do	the	laws	of	the U.S.	See	Item	1	—	"Business	—	Trademarks,"	and	Item	3	—	"Legal	Proceedings."

# Our	business	could	suffer	as	a	result	of	a	manufacturer's	inability	to	produce	our	goods	on	time	and	to	our	specifications.

We	do	not	own	or	operate	any	manufacturing	facilities	and	depend	exclusively	on	independent	third	parties	for	the	manufacture	of	all	of	our	products.	Our	products	are	manufactured	to	our specifications	primarily	by	international	manufacturers.	During	Fiscal	2009,	less	than	2%,	by	dollar	value,	of	our	men's	and	women's	products	were	manufactured	in	the	U.S.	and	over	98%,	by	dollar value,	of	these	products	were	manufactured	in	other	countries.	The	inability	of	a	manufacturer	to	ship	orders	of	our	products	in	a	timely	manner	or	to	meet	our	quality	standards	could	cause	us	to	miss	the delivery	date	requirements	of	our	customers	for	those	items,	which	could	result	in	cancellation	of	orders,	refusal	to	accept	deliveries	or	a	substantial	reduction	in	purchase	prices,	any	of	which	could	have a	material	adverse	effect	on	our	financial	condition	and	results	of	operations.

# Our	business	could	suffer	if	one	of	our	manufacturers	fails	to	use	acceptable	labor	practices.

We	require	our	licensing	partners	and	independent	manufacturers	to	operate	in	compliance	with	applicable	laws	and	regulations.	While	our	internal	and	vendor	operating	guidelines	promote ethical	business	practices	and	our	staff	periodically	visits	and	monitors	the	operations	of	our	independent	manufacturers,	we	do	not	control	these	manufacturers	or	their	labor	practices.	The	violation	of labor	or	other	laws	by	an	independent	manufacturer	used	by	us	or	one	of	our	licensing	partners,	or	the	divergence	of	an	independent	manufacturer's	or	licensing	partner's	labor	practices	from	those generally	accepted	as	ethical	or	appropriate	in	the	U.S.,	could	interrupt,	or	otherwise	disrupt	the	shipment	of	finished	products	to	us	or	damage	our	reputation.	Any	of	these,	in	turn,	could	have	a	material adverse	effect	on	our	financial	condition	and	results	of	operations.

# Our	business	could	suffer	if	we	need	to	replace	manufacturers.

We	compete	with	other	companies	for	the	production	capacity	of	our	manufacturers	and	import	quota	capacity.	Some	of	these	competitors	have	greater	financial	and	other	resources	than	we	have, and	thus	may	have	an	advantage	in	the	competition	for	production	and	import	quota	capacity.	If	we	experience	a	significant	increase	in	demand,	or	if	an	existing	manufacturer	of	ours	must	be	replaced, we	may	have	to	expand	our	third-party	manufacturing	capacity.	We	cannot	guarantee	that	this	additional	capacity	will	be	available	when	required	on	terms	that	are	acceptable	to	us.	See	Item	1	— "Business	—	Sourcing,	Production	and	Quality."	We	enter	into	a	number	of	purchase	order	commitments	each	season	specifying	a	time	for	delivery,	method	of	payment,	design	and	quality specifications	and	other	standard	industry	provisions,	but	do	not	have	long-term	contracts	with	any	manufacturer.	None	of	the	manufacturers	we	use	produce	our	products	exclusively.

# Our	business	is	exposed	to	domestic	and	foreign	currency	fluctuations.

We	generally	purchase	our	products	in	U.S.	dollars.	However,	we	source	most	of	our	products	overseas.	As	a	result,	the	cost	of	these	products	may	be	affected	by	changes	in	the	value	of	the relevant	currencies.	Changes	in	currency	exchange	rates	may	also	affect	the	U.S.	dollar	value	of	the	foreign	currency	denominated	prices	at	which	our	international	businesses	sell	products.	Furthermore, our	international	sales	and	licensing	revenue	generally	is	derived	from	sales	in	foreign	currencies.	These	foreign	currencies	include	the	Japanese	Yen,	the	Euro	and	the	British	Pound	Sterling,	and	this revenue	could	be	materially	affected	by	currency	fluctuations.	Although	we	hedge	certain	exposures	to	changes	in	foreign	currency	exchange	rates	arising	in	the	ordinary	course	of	business,	we	cannot assure	that	foreign	currency	fluctuations	will	not	have	a	material	adverse	impact	on	our	financial	condition	and	results	of	operations.	See	Item	7	—	"Management's	Discussion	and	Analysis	of	Financial Condition	and	Results	of	Operations	—	Market	Risk	Management."

# We	rely	on	our	licensing	partners	to	preserve	the	value	of	our	licenses.

The	risks	associated	with	our	own	products	also	apply	to	our	licensed	products	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;

•	manage	its	labor	relations;

•	maintain	relationships	with	its	suppliers;

•	manage	its	credit	and	bankruptcy	risks	effectively;	and

•	maintain	relationships	with	its	customers.

Although	a	number	of	our	license	agreements	prohibit	licensing	partners	from	entering	into	licensing	arrangements	with	our	competitors,	our	licensing	partners	generally	are	not	precluded	from offering,	under	other	brands,	the	types	of	products	covered	by	their	license	agreements	with	us.	A	substantial	portion	of	sales	of	our	products	by	our	domestic	licensing	partners	are	also	made	to	our largest	customers.	While	we	have	significant	control	over	our	licensing	partners'	products	and	advertising,	we	rely	on	our	licensing	partners	for,	among	other	things,	operational	and	financial	control	over their	businesses.	Changes	in	management,	reduced	sales	of	licensed	products,	poor	execution	or	financial	difficulties	with	respect	to	any	of	our	licensing	partners	could	adversely	affect	our	revenues,	both directly	from	reduced	licensing	revenue	received	and	indirectly	from	reduced	sales	of	our	other	products.	See	Item	1	—	"Business	—	Our	Licensing	Segment."

# Failure	to	maintain	licensing	partners	could	harm	our	business.

Although	we	believe	in	most	circumstances	we	could	replace	existing	licensing	partners	if	necessary,	our	inability	to	do	so	for	any	period	of	time	could	adversely	affect	our	revenues,	both	directly from	reduced	licensing	revenue	received	and	indirectly	from	reduced	sales	of	our	other	products.	See	Item	1	—	"Our	Licensing	Segment."

# The	voting	shares	of	the	Company's	stock	are	concentrated	in	one	majority	stockholder.

As	of	March	28,	2009,	Mr.	Ralph	Lauren,	or	entities	controlled	by	Mr.	Ralph	Lauren,	owned	approximately	86%	of	the	voting	power	of	the	outstanding	common	stock	of	the	Company.	As	a result,	Mr.	Lauren	has	the	ability	to	exercise	significant	control	over	our	business,	including,	without	limitation,	(i)	the	election	of	the	Company's	Class	B	common	stock	directors,	voting	separately	as	a class,	and	(ii)	any	action	requiring	the	approval	of	our	stockholders,	including	the	adoption	of	amendments	to	our	certificate	of	incorporation	and	the	approval	of	mergers	or	sales	of	all	or	substantially	all of	our	assets.

# The	trading	prices	of	our	securities	periodically	may	rise	or	fall	based	on	the	accuracy	of	predictions	of	our	earnings	or	other	financial	performance.

Our	business	planning	process	is	designed	to	maximize	our	long-term	strength,	growth	and	profitability,	not	to	achieve	an	earnings	target	in	any	particular	fiscal	quarter.	We	believe	that	this longer-term	focus	is	in	the	best	interests	of	the	Company	and	our	stockholders.	At	the	same	time,	however,	we	recognize	that	from	time	to	time	it	may	be	helpful	to	provide	investors	with	guidance	as	to our	quarterly	and	annual	forecast	of	net	sales	and	earnings.	While	we	generally	expect	to	provide	updates	to	our	guidance	when	we	report	our	results	each	fiscal	quarter,	we	assume	no	responsibility	to update	any	of	our	forward-looking	statements	at	such	times	or	otherwise.	If	and	when	we	announce	actual	results	that	differ	from	those	that	have	been	predicted	by	us,	outside	analysts	or	others,	the market	price	of	our	securities	could	be	affected.	Investors	who	rely	on	the	predictions	when	making	investment	decisions	with	respect	to	our	securities	do	so	at	their	own	risk.	We	take	no	responsibility for	any	losses	suffered	as	a	result	of	such	changes	in	the	prices	of	our	securities.

# Risks	Relating	to	the	Industry	in	Which	We	Compete

# The	downturn	in	the	global	economy	may	continue	to	affect	consumer	purchases	of	discretionary	items	and	luxury	retail	products,	which	could	adversely	affect	our	sales.

The	industries	in	which	we	operate	are	cyclical.	Many	economic	factors	outside	of	our	control	affect	the	level	of	consumer	spending	in	the	apparel,	cosmetic,	fragrance,	accessories	and	home products	industries,	including,	among	others:

•	general	business	conditions;

•	economic	downturns;

•	employment	levels;

•	downturns	in	the	stock	market;

•	interest	rates;

•	the	housing	market;

•	consumer	debt	levels;

•	the	availability	of	consumer	credit;

•	increases	in	fuel	prices;

# •	taxation;	and

•	consumer	confidence	in	future	economic	conditions.

Consumer	purchases	of	discretionary	items	and	luxury	retail	products,	including	our	products,	may	continue	to	decline	during	recessionary	periods	and	at	other	times	when	disposable	income	is lower.	A	continuing	downturn	or	an	uncertain	outlook	in	the	economies	in	which	we,	or	our	licensing	partners,	sell	our	products	may	materially	adversely	affect	our	businesses	and	our	revenues	and profits.	See	Item	7	—	"Overview	—	Our	Objectives	and	Risks"	for	further	discussion.

The	domestic	and	international	political	situation	also	affects	consumer	confidence.	The	threat,	outbreak	or	escalation	of	terrorism,	military	conflicts	or	other	hostilities	could	lead	to	a	decrease	in consumer	spending.

# We	face	intense	competition	in	the	worldwide	apparel	industry.

We	face	a	variety	of	intense	competitive	challenges	from	other	domestic	and	foreign	fashion-oriented	apparel	and	casual	apparel	producers,	some	of	which	may	be	significantly	larger	and	more diversified	and	have	greater	financial	and	marketing	resources	than	we	have.	We	compete	with	these	companies	primarily	on	the	basis	of:

•	anticipating	and	responding	to	changing	consumer	demands	in	a	timely	manner;

•	maintaining	favorable	brand	recognition;

•	developing	innovative,	high-quality	products	in	sizes,	colors	and	styles	that	appeal	to	consumers;

•	appropriately	pricing	products;

•	failure	to	anticipate	and	maintain	proper	inventory	levels;

•	providing	strong	and	effective	marketing	support;

•	creating	an	acceptable	value	proposition	for	retail	customers;

•	ensuring	product	availability	and	optimizing	supply	chain	efficiencies	with	manufacturers	and	retailers;	and

•	obtaining	sufficient	retail	floor	space	and	effective	presentation	of	our	products	at	retail	stores.

We	also	face	increasing	competition	from	companies	selling	apparel	and	home	products	through	the	Internet.	Although	RL	Media	sells	our	products	domestically	through	the	Internet,	increased competition	in	the	worldwide	apparel,	accessories	and	home	product	industries	from	Internet-based	competitors	could	reduce	our	sales,	prices	and	margins	and	adversely	affect	our	results	of	operations.

# The	success	of	our	business	depends	on	our	ability	to	respond	to	constantly	changing	fashion	trends	and	consumer	demands.

Our	success	depends	in	large	part	on	our	ability	to	originate	and	define	fashion	product	and	home	product	trends,	as	well	as	to	anticipate,	gauge	and	react	to	changing	consumer	demands	in	a timely	manner.	Our	products	must	appeal	to	a	broad	range	of	consumers	worldwide	whose	preferences	cannot	be	predicted	with	certainty	and	are

subject	to	rapid	change.	We	cannot	assure	you	that	we	will	be	able	to	continue	to	develop	appealing	styles	or	successfully	meet	constantly	changing	consumer	demands	in	the	future.	In	addition,	we cannot	assure	you	that	any	new	products	or	brands	that	we	introduce	will	be	successfully	received	by	consumers.	Any	failure	on	our	part	to	anticipate,	identify	and	respond	effectively	to	changing consumer	demands	and	fashion	trends	could	adversely	affect	retail	and	consumer	acceptance	of	our	products	and	leave	us	with	a	substantial	amount	of	unsold	inventory	or	missed	opportunities.	If	that occurs,	we	may	be	forced	to	rely	on	markdowns	or	promotional	sales	to	dispose	of	excess,	slow-moving	inventory,	which	may	harm	our	business	and	impair	the	image	of	our	brands.	Conversely,	if	we underestimate	consumer	demand	for	our	products	or	if	manufacturers	fail	to	supply	quality	products	in	a	timely	manner,	we	may	experience	inventory	shortages,	which	may	result	in	unfilled	orders, negatively	impact	customer	relationships,	diminish	brand	loyalty	and	result	in	lost	revenues.	See	Item	1	—	"Business	—		Sourcing,	Production	and	Quality."

# Item	1B. Unresolved	Staff	Comments

Not	applicable.

# Item	2. Properties

We	lease	space	for	our	retail	and	factory	showrooms,	and	warehouse	and	office	space	in	various	domestic	and	international	locations.	We	do	not	own	any	real	property	except	for	our	distribution facility	in	Greensboro,	North	Carolina	and	a	parcel	of	land	adjacent	to	the	facility,	and	retail	stores	in	Southampton,	New	York	and	Nantucket,	Massachusetts.

We	believe	that	our	existing	facilities	are	well	maintained,	in	good	operating	condition	and	are	adequate	for	our	present	level	of	operations.

The	following	table	sets	forth	information	with	respect	to	our	key	properties:

As	of	March	28,	2009,	we	operated	326	retail	stores,	totaling	approximately	2.5	million	square	feet.	We	anticipate	that	we	will	be	able	to	extend	our	retail	store	leases,	as	well	as	those	leases	for our	non-retail	facilities,	which	expire	in	the	near	future	on	satisfactory	terms	or	relocate	to	desirable	locations.

# Item	3. Legal	Proceedings

On	October	11,	2007	and	November	2,	2007,	two	class	action	lawsuits	were	filed	by	two	customers	in	state	court	in	California	asserting	that	while	they	were	shopping	at	certain	of	the	Company's factory	stores	in	California,	the	Company	allegedly	required	them	to	provide	certain	personal	information	at	the	point-of-sale	in	order	to	complete	a	credit	card	purchase.	The	plaintiffs	purported	to represent	a	class	of	customers	in	California	who	allegedly	were	injured	by	being	forced	to	provide	their	address	and	telephone	numbers	in	order	to	use	their	credit	cards	to	purchase	items	from	the Company's	stores,	which	allegedly	violated	Section	1747.08	of	California's	Song-Beverly	Act.	The	complaints	sought	an	unspecified	amount	of	statutory	penalties,	attorneys'	fees	and	injunctive	relief. The	Company	subsequently	had	the	actions	moved	to	the	United	States	District	Court	for	the	Eastern	and	Central	Districts	of	California.	The	Company	commenced	mediation	proceedings	with	respect	to these	lawsuits	and	on	October	17,	2008,	the	Company	agreed	in	principle	to	settle	these	claims	by	agreeing	to	issue	$20	merchandise	discount	coupons	with	six	month	expiration	dates	to	eligible	parties and	paying	the	plaintiffs'	attorneys'	fees.	The	terms	of	the	final	settlement	remain	subject	to	court	approval.	In	connection	with	this	settlement,	the	Company	recorded	a	$5	million	reserve	against	its expected	loss	exposure	during	the	second	quarter	of	Fiscal	2009.

On	August	19,	2005,	Wathne	Imports,	Ltd.	("Wathne"),	our	domestic	licensee	for	luggage	and	handbags,	filed	a	complaint	in	the	U.S.	District	Court	for	the	Southern	District	of	New	York	against us	and	Ralph	Lauren,	our	Chairman	and	Chief	Executive	Officer,	asserting,	among	other	things,	federal	trademark	law	violations,	breach	of	contract,	breach	of	obligations	of	good	faith	and	fair	dealing, fraud	and	negligent	misrepresentation.	The	complaint	sought,	among	other	relief,	injunctive	relief,	compensatory	damages	in	excess	of	$250	million	and	punitive	damages	of	not	less	than	$750	million. On	September	13,	2005,	Wathne	withdrew	this	complaint	from	the	U.S.	District	Court	and	filed	a	complaint	in	the	Supreme	Court	of	the	State	of	New	York,	New	York	County,	making	substantially	the same	allegations	and	claims	(excluding	the	federal	trademark	claims),	and	seeking	similar	relief.	On	February	1,	2006,	the	Court	granted	our	motion	to	dismiss	all	of	the	causes	of	action,	including	the cause	of	action	against	Mr.	Lauren,	except	for	the	breach	of	contract	claims,	and	denied	Wathne's	motion	for	a	preliminary	injunction.	We	believe	this	lawsuit	to	be	without	merit,	and	moved	for summary	judgment	on	the	remaining	claims.	Wathne	cross-moved	for	partial	summary	judgment.	A	hearing	on	these	motions	occurred	on	November	1,	2007.	The	judge	presiding	in	this	case	provided	a written	ruling	on	the	summary	judgment	motion	on	April	11,	2008.	The	Court	granted	Polo's	summary	judgment	motion	to	dismiss	in	large	measure,	and	denied	Wathne's	cross-motion.	Wathne	appealed the	dismissal	of	its	claims	and	a	hearing	in	connection	with	this	appeal	was	held	before	the	Appellate	Division	of	the	Supreme	Court	on	May	19,	2009.	A	ruling	from	the	Appellate	Division	with	respect to	this	appeal	is	not	expected	for	several	months.	A	trial	date	has	not	yet	been	established	in	connection	with	this	matter.	We	intend	to	continue	to	contest	the	remaining	claims	in	this	lawsuit	vigorously. Accordingly,	management	does	not	expect	that	the	ultimate	resolution	of	this	matter	will	have	a	material	adverse	effect	on	the	Company's	liquidity	or	financial	position.

On	March	2,	2006,	a	former	employee	at	our	Club	Monaco	store	in	Los	Angeles,	California	filed	a	lawsuit	against	the	Company	in	the	San	Francisco	Superior	Court	alleging	violations	of California	wage	and	hour	laws.	The	plaintiff	purported	to	represent	a	class	of	Club	Monaco	store	employees	who	allegedly	were	injured	by	being	improperly	classified	as	exempt	employees	and	thereby did	not	receive	compensation	for	overtime	and	did	not	receive	meal	and	rest	breaks.	The	complaint	sought	an	unspecified	amount	of	compensatory	damages,	disgorgement	of	profits,	attorneys'	fees	and injunctive	relief.	On	August	21,	2007,	eleven	former	and	then	current	employees	of	the	Company's	Club	Monaco	stores	in	California	filed	a	lawsuit	in	Los	Angeles	Superior	Court	alleging	similar	claims as	the	Club	Monaco	action	in	San	Francisco.	The	complaint	sought	an	unspecified	amount	of	compensatory	damages,	attorneys'	fees	and	punitive	damages.	The	parties	to	these	two	Club	Monaco litigations	agreed	to	retain	a	mediator	in	an	effort	to	resolve	both	matters	and	agreed	to	settle	all	claims	involving	both	litigations	at	an	aggregate	cost	of	$1.2	million.	The	terms	of	the	settlement	were recently	approved	by	both	the	Los	Angeles	and	San	Francisco	courts.

On	May	30,	2006,	four	former	employees	of	our	Ralph	Lauren	stores	in	Palo	Alto	and	San	Francisco,	California	filed	a	lawsuit	in	the	San	Francisco	Superior	Court	alleging	violations	of California	wage	and	hour	laws.	The	plaintiffs	purport	to	represent	a	class	of	employees	who	allegedly	have	been	injured	by	not	properly	being	paid	commission	earnings,	not	being	paid	overtime,	not receiving	rest	breaks,	being	forced	to	work	off	of	the	clock	while	waiting	to	enter	or	leave	the	store	and	being	falsely	imprisoned	while	waiting	to	leave	the	store.	The	complaint	seeks

an	unspecified	amount	of	compensatory	damages,	damages	for	emotional	distress,	disgorgement	of	profits,	punitive	damages,	attorneys'	fees	and	injunctive	and	declaratory	relief.	We	have	filed	a	cross- claim	against	one	of	the	plaintiffs	for	his	role	in	allegedly	assisting	a	former	employee	to	misappropriate	Company	property.	Subsequent	to	answering	the	complaint,	we	had	the	action	moved	to	the United	States	District	Court	for	the	Northern	District	of	California.	On	July	8,	2008,	the	United	States	District	Court	for	the	Northern	District	of	California	granted	plaintiffs'	motion	for	class	certification. We	believe	this	suit	is	without	merit	and	intend	to	contest	it	vigorously.	Accordingly,	management	does	not	expect	that	the	ultimate	resolution	of	this	matter	will	have	a	material	adverse	effect	on	the Company's	liquidity	or	financial	position.

On	May	15,	2009,	the	Company's	subsidiary,	Club	Monaco	Corp.,	commenced	an	action	in	the	Supreme	Court	of	the	State	of	New	York,	New	York	County,	against	LCJG	Distribution	Co.,	Ltd. ("LCJG")	and	Lane	Crawford	Joyce	Group	Limited	("Lane	Crawford").	LCJG	is	a	Club	Monaco	Corp.	licensee	in	Asia	pursuant	to	a	Club	Monaco	Store	License	Agreement,	dated	as	of	February	28, 2005	(as	amended,	the	"License	Agreement").	Lane	Crawford	is	the	guarantor	of	LCJG's	obligations	under	the	License	Agreement,	pursuant	to	a	Guaranty,	dated	as	of	February	28,	2005,	which	was executed	by	Lane	Crawford	(the	"Guaranty").	The	License	Agreement	requires	that	LCJG	pay	royalties	and	other	payments	to	Club	Monaco	Corp.	for	the	use	by	LCJG	of	the	Club	Monaco	brand	in connection	with	the	operation	of	various	Club	Monaco	stores	in	Asia.	Club	Monaco	Corp.'s	Complaint	alleges	that	LCJG	and	Lane	Crawford	have	breached	the	License	Agreement	and	Guaranty	by, among	other	things,	failing	to	pay	Club	Monaco	certain	royalties	and	other	payments	which	both	LCJG	and	Lane	Crawford	are	responsible	for	under	the	License	Agreement	and	Guaranty.	Management does	not	expect	that	the	ultimate	resolution	of	this	matter	will	have	a	material	adverse	effect	on	the	Company's	liquidity,	financial	position	or	results	of	operations.

In	the	third	quarter	of	Fiscal	2007,	the	Company	was	notified	of	an	alleged	compromise	of	its	retail	store	information	systems	that	process	its	credit	card	data	for	certain	Club	Monaco	stores	in Canada.	As	of	the	end	of	Fiscal	2007,	the	Company	had	recorded	a	total	reserve	of	$5.0	million	for	this	matter	based	on	its	best	estimate	of	its	potential	exposure	at	that	time.	In	October	2008,	the Company	was	notified	that	this	matter	had	been	fully	resolved.	The	Company's	aggregate	losses	in	this	matter	were	less	than	$0.4	million.	The	Company	reversed	$4.1	million	of	its	original	$5.0	million reserve	into	income	during	Fiscal	2008	based	on	favorable	developments	in	this	matter	at	that	point,	and	the	remaining	$0.5	million	excess	reserve	was	reversed	into	income	during	the	second	quarter	of Fiscal	2009.

We	are	otherwise	involved	from	time	to	time	in	legal	claims	and	proceedings	involving	credit	card	fraud,	trademark	and	intellectual	property,	licensing,	employee	relations	and	other	matters incidental	to	our	business.	We	believe	that	the	resolution	of	these	other	matters	currently	pending	will	not	individually	or	in	the	aggregate	have	a	material	adverse	effect	on	our	financial	condition	or results	of	operations.

# Item	4. Submission	of	Matters	to	a	Vote	of	Security	Holders

No	matters	were	submitted	to	a	vote	of	security	holders	during	the	fourth	quarter	of	the	fiscal	year	ended	March	28,	2009.

# PART	II

# Item	5. Market	for	Registrant's	Common	Equity,	Related	Stockholder	Matters	and	Issuer	Purchases	of	Equity	Securities

Our	Class	A	common	stock	is	traded	on	the	New	York	Stock	Exchange	("NYSE")	under	the	symbol	"RL."	The	following	table	sets	forth	the	high	and	low	sales	prices	per	share	of	the	Class	A common	stock	for	each	quarterly	period	in	our	two	most	recent	fiscal	years,	as	reported	on	the	NYSE	Composite	Tape:

|  | High | Low |
| :--- | :--- | :--- |
| Fiscal\t2009: |  |  |
| First\tQuarter | $71.20 | $57.07 |
| Second\tQuarter | 82.02 | 53.86 |
| Third\tQuarter | 70.64 | 31.22 |
| Fourth\tQuarter | 48.29 | 31.64 |
| Fiscal\t2008: |  |  |
| First\tQuarter | $101.46 | $87.70 |
| Second\tQuarter | 102.58 | 71.76 |
| Third\tQuarter | 78.61 | 60.50 |
| Fourth\tQuarter | 68.67 | 50.55 |

On	May	20,	2003,	our	Board	of	Directors	initiated	a	regular	quarterly	cash	dividend	program	of	$0.05	per	share,	or	$0.20	per	share	on	an	annual	basis,	on	our	Class	A	common	stock.

Approximately	$20	million	was	recorded	as	a	reduction	to	retained	earnings	during	Fiscal	2009	in	connection	with	these	dividends.

As	of	May	15,	2009,	there	were	1,136	holders	of	record	of	our	Class	A	common	stock	and	16	holders	of	record	of	our	Class	B	common	stock.	All	of	our	outstanding	shares	of	Class	B	common stock	are	owned	by	Mr.	Ralph	Lauren	and	related	entities	and	are	convertible	at	any	time	into	shares	of	Class	A	common	stock	on	a	one-for-one	basis.

During	the	fiscal	quarter	ended	March	28,	2009,	there	were	no	shares	repurchased	by	the	Company	as	part	of	the	publicly	announced	plans	or	programs.	The	remaining	availability	under	the Company's	common	stock	repurchase	program	was	approximately	$266	million	as	of	March	28,	2009.

The	following	graph	compares	the	cumulative	total	stockholder	return	(stock	price	appreciation	plus	dividends)	on	our	Class	A	common	stock	with	the	cumulative	total	return	of	the	Standard	& Poor's	500	Index,	and	a	peer	group	index	of	companies	that	we	believe	are	similar	to	ours	(the	"Peer	Group")	for	the	period	from	April	2,	2004,	the	last	trading	day	in	the	Company's	2004	fiscal	year, through	March	27,	2009,	the	last	trading	day	in	the	Company's	2009	fiscal	year.	Our	Peer	Group	consists	of	Coach,	Estee	Lauder,	Jones	Apparel,	Kenneth	Cole,	Liz	Claiborne,	Phillips	Van	Heusen, Tiffany	&	Co.,	VF	Corp.,	Warnaco,	LVMH,	Burberry,	PPR	SA,	Hermes	International,	Richemont,	Luxottica	and	Tod's	Group.	All	calculations	done	for	foreign	companies	in	our	Peer	Group	are	made using	the	local	foreign	issue	of	such	companies.	The	returns	are	calculated	by	assuming	an	investment	in	the	Class	A	common	stock	and	each	index	of	$100	on	April	2,	2004,	with	all	dividends reinvested.

# COMPARISON	OF	5	YEAR	CUMULATIVE	TOTAL	RETURN*

# Among	Polo	Ralph	Lauren	Corporation,	The	S&P	500	Index

# And	A	Peer	Group

* $100	invested	on	4/2/04	in	stock	or	3/31/04	in	index,	including	reinvestment	of	dividends.	Index	calculated	on	month-end	basis.

Copyright	©	2009	S&P,	a	division	of	The	McGraw-Hill	Companies	Inc.	All	rights	reserved.

# Item	6. Selected	Financial	Data

See	the	"Index	to	Consolidated	Financial	Statements	and	Supplementary	Information,"	and	specifically	"Selected	Financial	Information"	appearing	at	the	end	of	this	Annual	Report	on Form	10-K.

# Item	7. Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations

The	following	management's	discussion	and	analysis	of	financial	condition	and	results	of	operations	should	be	read	together	with	our	audited	consolidated	financial	statements	and	footnotes, which	are	included	elsewhere	in	this	Annual	Report	on	Form	10-K	for	Fiscal	2009	("Fiscal	2009	10-K").	We	utilize	a	52-53	week	fiscal	year	ending	on	the	Saturday	closest	to	March	31.	As	such,	fiscal year	2009	ended	on	March	28,	2009	and	reflected	a	52-week	period	("Fiscal	2009");	fiscal	year	2008	ended	on	March	29,	2008	and	reflected	a	52-week	period	("Fiscal	2008");	and	fiscal	year	2007	ended on	March	31,	2007	and	also	reflected	a	52-week	period	("Fiscal	2007").

# INTRODUCTION

Management's	discussion	and	analysis	of	financial	condition	and	results	of	operations	("MD&A")	is	provided	as	a	supplement	to	the	accompanying	audited	consolidated	financial	statements	and footnotes	to	help	provide	an	understanding	of	our	financial	condition	and	liquidity,	changes	in	financial	condition,	and	results	of	our	operations.	MD&A	is	organized	as	follows:

•	Overview.		This	section	provides	a	general	description	of	our	business,	including	our	objectives	and	risks,	and	a	summary	of	financial	performance	for	Fiscal	2009.	In	addition,	this	section includes	a	discussion	of	recent	developments	and	transactions	affecting	comparability	that	we	believe	are	important	in	understanding	our	results	of	operations	and	financial	condition,	and	in anticipating	future	trends.

•	Results	of	operations.		This	section	provides	an	analysis	of	our	results	of	operations	for	Fiscal	2009,	Fiscal	2008	and	Fiscal	2007.

•	Financial	condition	and	liquidity.		This	section	provides	an	analysis	of	our	cash	flows	for	Fiscal	2009,	Fiscal	2008	and	Fiscal	2007,	as	well	as	a	discussion	of	our	financial	condition	and liquidity	as	of	March	28,	2009.	The	discussion	of	our	financial	condition	and	liquidity	includes	(i)	our	available	financial	capacity	under	our	credit	facility,	(ii)	a	summary	of	our	key	debt compliance	measures	and	(iii)	a	summary	of	our	outstanding	debt	and	commitments	as	of	March	28,	2009.

•	Market	risk	management.		This	section	discusses	how	we	manage	our	risk	exposures	related	to	interest	rates,	foreign	currency	exchange	rates	and	our	investments,	as	well	as	the	underlying market	conditions	as	of	March	28,	2009.

•	Critical	accounting	policies.		This	section	discusses	accounting	policies	considered	to	be	important	to	our	financial	condition	and	results	of	operations,	which	require	significant	judgment	and estimation	on	the	part	of	management	in	their	application.	In	addition,	all	of	our	significant	accounting	policies,	including	our	critical	accounting	policies,	are	summarized	in	Notes	3	and	4	to our	accompanying	audited	consolidated	financial	statements.

•	Recently	issued	accounting	standards.		This	section	discusses	the	potential	impact	to	our	reported	financial	condition	and	results	of	operations	of	accounting	standards	that	have	been	issued, but	which	we	have	not	yet	adopted.

# OVERVIEW

# Our	Business

Our	Company	is	a	global	leader	in	the	design,	marketing	and	distribution	of	premium	lifestyle	products	including	men's,	women's	and	children's	apparel,	accessories,	fragrances	and	home furnishings.	Our	long-standing	reputation	and	distinctive	image	have	been	consistently	developed	across	an	expanding	number	of	products,	brands	and	international	markets.	Our	brand	names	include Polo	by	Ralph	Lauren,	Ralph	Lauren	Purple	Label,	Ralph	Lauren	Collection,	Black	Label,	Blue	Label,	Lauren	by	Ralph	Lauren,	RRL,	RLX,	Rugby,	Ralph	Lauren	Childrenswear,	American	Living, Chaps	and	Club	Monaco,	among	others.

We	classify	our	businesses	into	three	segments:	Wholesale,	Retail	and	Licensing.	Our	wholesale	business	(representing	approximately	57%	of	Fiscal	2009	net	revenues)	consists	of	wholesale- channel	sales	made	principally	to	major	department	stores,	specialty	stores	and	golf	and	pro	shops	located	throughout	the	U.S.,	Europe	and	Asia.	Our	retail	business	(representing	approximately	39%	of Fiscal	2009	net	revenues)	consists	of	retail-channel	sales	directly	to	consumers	through	full-price	and	factory	retail	stores	located	throughout	the	U.S.,	Canada,	Europe,	South	America	and	Asia,	and through	our	retail	internet	sites	located	at	www.RalphLauren.com	and	www.Rugby.com.	In	addition,	our	licensing	business	(representing	approximately	4%	of	Fiscal	2009	net	revenues)	consists	of royalty-based	arrangements	under	which	we	license	the	right	to	third	parties	to	use	our	various	trademarks	in	connection	with	the	manufacture	and	sale	of	designated	products,	such	as	apparel,	eyewear and	fragrances,	in	specified	geographical	areas	for	specified	periods.	Approximately	28%	of	our	Fiscal	2009	net	revenues	was	earned	in	international	regions	outside	of	the	U.S.	and	Canada.	See	Note	21 to	the	accompanying	audited	consolidated	financial	statements	for	a	summary	of	net	revenues	by	geographic	location.

Our	business	is	typically	affected	by	seasonal	trends,	with	higher	levels	of	wholesale	sales	in	our	second	and	fourth	quarters	and	higher	retail	sales	in	our	second	and	third	quarters.	These	trends result	primarily	from	the	timing	of	seasonal	wholesale	shipments	and	key	vacation	travel,	back-to-school	and	holiday	shopping	periods	in	the	Retail	segment.

# Our	Objectives	and	Risks

Our	core	strengths	include	a	portfolio	of	global	luxury	lifestyle	brands,	a	strong	and	experienced	management	team,	a	proven	ability	to	develop	and	extend	our	brands	distributed	through	multiple retail	channels	in	global	markets,	a	disciplined	investment	philosophy	and	a	solid	balance	sheet.	Despite	the	various	risks	associated	with	the	deterioration	in	the	global	economic	environment	as	further discussed	below,	we	believe	our	core	strengths	will	allow	us	to	continue	to	execute	our	strategy	for	long-term	sustainable	growth	in	revenue,	net	income	and	operating	cash	flow.

Our	financial	performance	has	been	driven	by	the	Company's	focus	on	six	key	objectives:

•	Creating	unique	businesses	primarily	centered	around	one	core	and	heritage-driven	brand;

•	Diversifying	and	expanding	our	products	and	prices,	distribution	channels	and	geographic	regions;

•	Improving	brand	control	and	positioning;

•	Focusing	on	selective	strategic	partnerships;

•	Implementing	infrastructure	improvements	that	support	a	worldwide	business;	and

•	Funding	our	expansion	through	strong	operating	cash	flow.

As	our	business	has	grown,	our	portfolio	mix	and	brand	control	has	evolved	from	primarily	that	of	a	mono-brand	U.S.	centric	menswear	wholesaler	with	a	broad	array	of	product	and	geographic licenses	to	that	of	a	portfolio	of	lifestyle	brands	with	a	"direct	control"	model	over	most	of	our	brands,	products	and	international	territories.	We	believe	that	this	broader	and	better-diversified	portfolio mix	positions	us	for	ongoing	growth,	offering	our	customers	a	range	of	products,	price	points	and	channels	of	distribution,	and	our	size	and	global	operations	favorably	position	us	to	take	advantage	of synergies	in	design,	sourcing	and	distribution.

While	balancing	our	long-term	key	strategic	objectives	with	our	near-term	priorities	to	manage	through	the	many	risks	associated	with	the	weakened	global	economic	environment,	including	a significant	contraction	in	consumer	spending,	we	intend	to	continue	to	pursue	select	opportunities	for	growth	during	the	course	of	Fiscal	2010	and	beyond.	These	opportunities	and	continued	investment initiatives	include:

•	International	Growth	Opportunities

Ø The	transition	of	our	wholesale	and	retail	businesses	in	Southeast	Asia	from	a	licensed	to	a	wholly	owned	operation	effective	January	1,	2010,	and	the	development	of	a	supporting organizational	infrastructure;	and

Ø Ongoing	development	and	integration	of	our	recently	acquired	Japanese	businesses,	including	the	continued	execution	of	our	plans	to	build	a	supporting	organizational	infrastructure and	retail	business.

# •	Brand	Extension	and	Product	Diversification	Growth	Opportunities

Ø Further	development	of	a	wide	array	of	luxury	accessories	product	offerings,	including	handbags,	footwear,	small	leathergoods	and	watches/jewelry;	and

Ø The	continued	expansion	of	our	Lauren	product	line	in	Europe	and	other	international	markets.

•	Direct-to-Consumer	Growth	Opportunities

Ø Global	expansion	of	our	direct-to-consumer	presence	in	various	formats	and	key	markets,	including	Paris,	France. •	Cost	Savings	Opportunities

Ø The	ongoing	evaluation	of	strategies	to	better	align	our	cost	base	with	lower	sales	trends	associated	with	the	recent	contraction	in	consumer	spending.

# Global	Economic	Developments

Our	opportunities	for	long-term	growth	are	accompanied	by	significant	challenges	and	risks,	particularly	in	the	near	term.	Over	the	course	of	the	past	year,	the	global	economic	environment	has deteriorated	significantly	and	has	evolved	into	what	is	commonly	called	a	"global	economic	crisis."	Negative	developments	have	included	declining	values	in	real	estate,	restricted	criteria	for	obtaining credit	and	capital,	liquidity	concerns	for	most	borrowers,	the	failure	of	certain	major	financial	institutions,	rising	unemployment,	and	significant	declines	and	volatility	in	global	financial	markets.	In response	to	these	unprecedented	economic	conditions,	the	United	States	and	many	other	countries	have	taken	a	number	of	significant	measures	designed	to	stabilize	the	state	of	their	financial	systems. Notwithstanding	these	measures,	consumer	confidence	in	the	U.S.,	as	measured	by	the	Conference	Board,	has	been	at	all-time	low	levels.

The	global	economic	crisis	has	negatively	impacted	to	a	significant	degree	the	level	of	consumer	spending	for	discretionary	items	over	the	course	of	the	past	year	and	through	April	2009.	This has	negatively	affected	our	business	as	it	is	highly	dependent	on	consumer	demand	for	our	products.	Despite	the	more	challenging	economic	environment	that	affected	both	the	Company's	wholesale customers	and	retail	channels,	we	continued	to	experience	reported	revenue	growth	during	Fiscal	2009.

However,	beginning	in	October	2008,	our	Retail	segment	began	to	experience	sharp	declines	in	comparative	store	sales,	as	did	many	of	our	traditional	wholesale	customers.	In	particular,	our comparable	store	sales	for	the	second	half	of	Fiscal	2009	declined	approximately	23%	for	full-price	Ralph	Lauren	sales,	approximately	19%	for	full-price	Club	Monaco	sales	and	approximately	6%	for factory	store	sales.	To	realign	our	cost	base	with	lower	sales	trends,	the	Company	initiated	a	restructuring	plan	during	the	fourth	quarter	of	Fiscal	2009.	This	plan	included	a	reduction	in	workforce	and the	closure	of	certain	underperforming	retail	stores.	Cost	reduction	actions	related	to	the	restructuring	plan	are	anticipated	to	result	in	annualized	pretax	cash	savings	of	approximately	$25	million beginning	in	Fiscal	2010.	We	also	have	mitigated	the	impact	of	the	contraction	in	consumer	spending	by	taking	proactive	measures	to	scale	back	our	inventory	levels	across	all	channels,	with	inventory down	approximately	2%	at	the	end	of	Fiscal	2009	compared	to	the	prior	year	excluding	the	effects	of	acquisitions.

The	global	economic	environment	and	the	related	contraction	in	the	anticipated	level	of	consumer	spending	will	likely	continue	to	have	a	negative	effect	on	our	sales	and	operating	margins	across all	segments	for	the	foreseeable	future.	As	of	March	28,	2009,	largely	in	response	to	the	global	macroeconomic	environment,	our	traditional	retail	partners	have	reduced	their	initial	wholesale	orders	for Fall	2009	apparel	products	by	approximately	10%.

We	continue	to	evaluate	strategies	to	control	costs	by	focusing	on	operational	efficiencies	on	a	Company-wide	basis,	by	conservatively	managing	our	inventory	levels,	and	by	controlling	capital spending.	The	implementation	of	these	strategies	may	necessitate	additional	cost-savings	actions	going	forward.

For	a	detailed	discussion	of	significant	risk	factors	that	have	the	potential	to	cause	our	actual	results	to	differ	materially	from	our	expectations,	see	Part	I,	Item	1A	—	"Risk	Factors"	included elsewhere	in	this	Fiscal	2009	10-K.

# Summary	of	Financial	Performance

# Operating	Results

During	Fiscal	2009,	we	reported	revenues	of	$5.019	billion,	net	income	of	$406.0	million	and	net	income	per	diluted	share	of	$4.01.	This	compares	to	revenues	of	$4.880	billion,	net	income	of $419.8	million	and	net	income	per	diluted	share	of	$3.99	during	Fiscal	2008.	As	discussed	further	below,	the	comparability	of	our	operating	results	has	been	affected	by	recent	acquisitions	and $79.0	million	of	pretax	charges	recognized	in	Fiscal	2009	related	to	asset	impairments	and	restructurings.

Our	operating	performance	for	Fiscal	2009	included	revenue	growth	of	2.8%,	principally	due	to	the	inclusion	of	a	full	year	of	revenues	from	the	newly	launched	American	Living	product	line, increased	revenues	from	our	European	and	Japanese	Wholesale	businesses,	continued	growth	in	RalphLauren.com	and	Rugby.com	sales	(collectively,	"RalphLauren.com"),	and	net	favorable	foreign currency	effects.	These	increases	were	partially	offset	by	a	net	decline	in	comparable	global	Retail	store	sales	and	lower	Wholesale	sales	to	our	traditional	department	and	specialty	store	customers	in	the U.S.	associated	with	the	current	weakened	global	economic	environment.	We	also	experienced	an	increase	in	gross	profit	percentage	of	30	basis	points	to	54.4%,	primarily	due	to	the	growth	of	our European	and	Japanese	Wholesale	operations,	as	well	as	the	net	decrease	of	unfavorable	purchase	accounting	effects	in	our	Wholesale	and	Retail	segments.	These	increases	were	partially	offset	by increased	markdown	activity	and	higher	reductions	in	the	carrying	cost	of	our	retail	inventory,	largely	relating	to	the	current	economic	downturn.	Selling,	general	and	administrative	("SG&A")	expenses increased	during	Fiscal	2009	attributable	largely	to	our	new	business	initiatives.

Net	income	declined	during	Fiscal	2009	as	compared	to	Fiscal	2008,	principally	due	to	a	$57.9	million	decrease	in	operating	income,	offset	in	part	by	a	$40.8	million	decrease	in	the	provision	for income	taxes.	The	decrease	in	the	provision	for	income	taxes	was	driven	by	a	370	basis	point	decline	in	our	effective	tax	rate	and	the	overall	decrease	in	pretax	income.	Net	income	per	diluted	share slightly	increased	compared	to	the	prior	fiscal	year,	as	the	effect	of	lower	weighted-average	diluted	shares	outstanding	was	mostly	offset	by	the	decrease	in	net	income	in	Fiscal	2009.	These	results	were negatively	impacted	by	$79.0	million	of	pretax	charges	recognized	in	Fiscal	2009	related	to	asset	impairments	and	restructurings,	which	had	an	aggregate	effect	of	reducing	net	income	in	Fiscal	2009	by $49.7	million	($0.49	per	diluted	share).

# Financial	Condition	and	Liquidity

Our	financial	position	reflects	the	overall	relative	strength	of	our	business	results.	We	ended	Fiscal	2009	in	a	net	cash	and	short-term	investments	position	(total	cash	and	cash	equivalents,	plus short-term	investments	less	total	debt)	of	$413.5	million,	compared	to	a	net	debt	position	(total	debt	less	total	cash	and	cash	equivalents	and	short-term	investments)	of	$53.4	million	as	of	the	end	of	Fiscal 2008. The	improvement	in	our	financial	position	was	primarily	due	to	growth	in	operating	cash	flows,	partially	offset	by	our	treasury	stock	repurchases,	capital	expenditures	and	the	funding	of	our recent	Japanese	Childrenswear	and	Golf	Acquisition	(as	defined	under	"Recent	Developments").	Our	stockholders'	equity	increased	to	$2.735	billion	as	of	March	28,	2009,	compared	to	$2.390	billion	as of	March	29,	2008.	This	increase	was	primarily	due	to	our	net	income	during	Fiscal	2009,	offset	in	part	by	our	share	repurchase	activity.

We	generated	$774.2	million	of	cash	from	operations	during	Fiscal	2009,	compared	to	$695.4	million	during	Fiscal	2008.	We	used	our	cash	availability	to	support	our	common	stock	repurchase program,	to	reinvest	in	our	business	through	capital	spending,	to	fund	our	Japanese	Childrenswear	and	Golf	Acquisition	for	approximately	$26.0	million,	and	to	repay	$196.8	million	of	debt	that	matured in	May	2008	relating	to	our	Japanese	Business	Acquisitions	(as	defined	under	"Recent	Developments").	In	particular,	we	used	$169.8	million	to	repurchase	2.5	million	shares	of	Class	A	common	stock. We	also	spent	$185.0	million	for	capital	expenditures	primarily	associated	with	global	retail	store	expansion,	construction	and	renovation	of	department	store	shop-within-shops	and	investments	in	our facilities	and	technological	infrastructure.

# Transactions	Affecting	Comparability	of	Results	of	Operations	and	Financial	Condition

The	comparability	of	the	Company's	operating	results	for	the	three	fiscal	years	presented	herein	has	been	affected	by	certain	transactions,	including:

•	Acquisitions	that	occurred	in	Fiscal	2009,	Fiscal	2008	and	Fiscal	2007.	In	particular,	the	Company	completed	the	Japanese	Childrenswear	and	Golf	Acquisition	on	August	1,	2008,	the Japanese	Business	Acquisitions	on	May	29,	2007,	the	Small	Leathergoods	Business	Acquisition	on	April	13,	2007	and	the	RL	Media	Minority	Interest	Acquisition	on	March	28,	2007	(each as	defined	in	Note	5	to	the	accompanying	audited	consolidated	financial	statements);

•	Certain	pretax	charges	related	to	asset	impairments	and	restructurings	during	the	fiscal	years	presented;	and

•	The	adoption	of	the	provisions	of	Financial	Accounting	Standards	Board	Interpretation	No.	48,	"Accounting	for	Uncertainty	in	Income	Taxes	—	An	Interpretation	of	Statement	of	Financial Accounting	Standards	("FAS")	No.	109"	("FIN	48")	as	of	the	beginning	of	Fiscal	2008.	The	incremental	impact	of	the	adoption	of	FIN	48	decreased	the	effective	tax	rate	by	97	basis	points in	Fiscal	2008.	See	Note	13	to	the	accompanying	audited	consolidated	financial	statements	for	further	discussion	of	the	Company's	adoption	of	FIN	48.

A	summary	of	the	effect	of	certain	of	these	items	on	pretax	income	for	each	applicable	fiscal	year	presented	is	noted	below	(references	to	"Notes"	are	to	the	notes	to	the	accompanying	audited consolidated	financial	statements):

| Impairments	of	assets	(see	Note	11) | $(55.4) | $(5.0) | $— |
| :--- | :--- | :--- | :--- |
| Restructuring\tcharges\t(see\tNote\t12) | (23.6) | — | (4.6) |
|  | $(79.0) | $(5.0) | $(4.6) |

The	following	discussion	of	results	of	operations	highlights,	as	necessary,	the	significant	changes	in	operating	results	arising	from	these	items	and	transactions.	However,	unusual	items	or transactions	may	occur	in	any	period.	Accordingly,	investors	and	other	financial	statement	users	individually	should	consider	the	types	of	events	and	transactions	that	have	affected	operating	trends.

In	February	2009,	the	Company	entered	into	an	agreement	with	Dickson	Concepts	International	Limited	("Dickson")	to	assume	direct	control	of	its	Polo-branded	licensed	apparel	businesses	in Southeast	Asia	effective	January	1,	2010	in	exchange	for	a	payment	of	$20	million	and	certain	other	consideration.	Dickson	is	currently	the	Company's	licensee	for	Polo-branded	apparel	in	the	Southeast Asia	region,	which	is	comprised	of	China,	Hong	Kong,	Indonesia,	Malaysia,	the	Philippines,	Singapore,	Taiwan	and	Thailand.	In	connection	with	this	agreement,	the	Company	entered	into	a	one-year extension	of	its	underlying	sub-license	agreement	with	Dickson,	which	was	originally	scheduled	to	expire	on	December	31,	2008.	The	transaction	is	subject	to	certain	customary	closing	conditions.	The Company	expects	to	account	for	this	transaction	as	an	asset	purchase	during	the	fourth	quarter	of	Fiscal	2010.

On	August	1,	2008,	in	connection	with	the	transition	of	the	Polo-branded	childrenswear	and	golf	apparel	businesses	in	Japan	from	a	licensed	to	a	wholly	owned	operation,	the	Company	acquired certain	net	assets	(including	inventory)	from	Naigai	Co.	Ltd.	("Naigai")	in	exchange	for	a	payment	of	approximately	¥2.8	billion	(approximately	$26	million	as	of	the	acquisition	date)	and	certain	other consideration	(the	"Japanese	Childrenswear	and	Golf	Acquisition").	The	Company	funded	the	Japanese	Childrenswear	and	Golf	Acquisition	with	available	cash	on-hand.	Naigai	was	the	Company's licensee	for	childrenswear,	golf	apparel	and	hosiery	under	the	Polo	by	Ralph	Lauren	and	Ralph	Lauren	brands	in	Japan.	In	conjunction	with	the	Japanese	Childrenswear	and	Golf	Acquisition,

the	Company	also	entered	into	an	additional	5-year	licensing	and	design-related	agreement	with	Naigai	for	Polo	and	Chaps-branded	hosiery	in	Japan	and	a	transition	services	agreement	for	the	provision of	a	variety	of	operational,	human	resources	and	information	systems-related	services	over	a	period	of	up	to	eighteen	months	from	the	date	of	the	closing	of	the	transaction.

# Japanese	Business	Acquisitions

On	May	29,	2007,	the	Company	acquired	control	of	certain	of	its	Japanese	businesses	that	were	formerly	conducted	under	licensed	arrangements,	consistent	with	the	Company's	long-term strategy	of	international	expansion.	In	particular,	the	Company	acquired	approximately	77%	of	the	outstanding	shares	of	Impact	21	Co.,	Ltd.	("Impact	21")	that	it	did	not	previously	own	in	a	cash	tender offer	(the	"Impact	21	Acquisition"),	thereby	increasing	its	ownership	in	Impact	21	from	approximately	20%	to	approximately	97%.	Impact	21	previously	conducted	the	Company's	men's,	women's	and jeans	apparel	and	accessories	business	in	Japan	under	a	pre-existing,	sub-license	arrangement.	In	addition,	the	Company	acquired	the	remaining	50%	interest	in	Polo	Ralph	Lauren	Japan	Corporation ("PRL	Japan"),	which	holds	the	master	license	to	conduct	Polo's	business	in	Japan,	from	Onward	Kashiyama	and	Seibu	(the	"PRL	Japan	Minority	Interest	Acquisition").	Collectively,	the	Impact	21 Acquisition	and	the	PRL	Japan	Minority	Interest	Acquisition	are	herein	referred	to	as	the	"Japanese	Business	Acquisitions."

The	purchase	price	initially	paid	in	connection	with	the	Japanese	Business	Acquisitions	was	approximately	$360	million,	including	transaction	costs	of	approximately	$12	million.	In	February 2008,	the	Company	acquired	approximately	1%	of	the	remaining	Impact	21	shares	outstanding	at	an	aggregate	cost	of	$5	million.	During	the	first	quarter	of	Fiscal	2009,	the	Company	acquired	the remaining	2%	of	Impact	21	shares	outstanding	at	an	aggregate	cost	of	approximately	$9	million	and	completed	the	process	of	acquiring	the	remaining	outstanding	shares	not	exchanged	as	of	the	close	of the	tender	offer	period	(the	"minority	squeeze-out").	As	a	result	of	these	transactions,	Impact	21	is	a	100%-owned	subsidiary	of	the	Company.

The	Company	funded	the	Japanese	Business	Acquisitions	with	available	cash	on-hand	and	¥20.5	billion	of	borrowings	under	a	one-year	term	loan	agreement	pursuant	to	an	amendment	and restatement	to	the	Company's	existing	credit	facility.	The	Company	repaid	the	borrowing	by	its	maturity	date	on	May	22,	2008	using	$196.8	million	of	Impact	21's	cash	on-hand	acquired	as	part	of	the acquisition.

The	results	of	operations	for	Impact	21,	which	were	previously	accounted	for	using	the	equity	method	of	accounting,	have	been	consolidated	in	the	Company's	results	of	operations	commencing April	1,	2007.	Accordingly,	the	Company	recorded	within	minority	interest	expense	the	amount	of	Impact	21's	net	income	allocable	to	the	holders	of	the	approximate	80%	of	the	Impact	21	shares	not owned	by	the	Company	prior	to	the	closing	date	of	the	tender	offer.	The	results	of	operations	for	PRL	Japan	had	already	been	consolidated	by	the	Company	in	all	prior	periods.

See	Note	5	to	the	accompanying	audited	consolidated	financial	statements	for	further	discussion	of	the	Company's	acquisitions	during	the	fiscal	years	presented.

In	Fiscal	2008,	the	Company	launched	American	Living,	a	new	lifestyle	brand	created	exclusively	in	the	U.S.	for	distribution	by	J.C.	Penney	Company,	Inc.	("JCPenney")	through	the	Company's Global	Brand	Concepts	group.	The	Company	began	shipping	related	product	to	JCPenney	in	December	2007.	See	"Overview	—	Global	Economic	Developments."

# RESULTS	OF	OPERATIONS

The	following	table	summarizes	our	results	of	operations	and	expresses	the	percentage	relationship	to	net	revenues	of	certain	financial	statement	captions:

|  | March	28, | March	29, |  |  |
| :--- | :--- | :--- | :--- | :--- |
|  | 2009 | 2008 | $\tChange | %\tChange |
|  | (millions,\texcept\tper\tshare\tdata) | (millions,\texcept\tper\tshare\tdata) |  |  |
| Net\trevenues | $5,018.9 | $4,880.1 | $138.8 | 2.8\t % |
| Cost\tof\tgoods\tsold(a) | (2,288.2) | (2,242.0) | (46.2) | 2.1\t % |
| Gross\tprofit | 2,730.7 | 2,638.1 | 92.6 | 3.5\t % |
| Gross\tprofit\tas\t%\tof\tnet\trevenues | 54.4% | 54.1% |  |  |
| Selling,\tgeneral\tand\tadministrative\texpenses(a) | (2,036.0) | (1,932.5) | (103.5) | 5.4\t % |
| SG&A\tas\t%\tof\tnet\trevenues | 40.6% | 39.6% |  |  |
| Amortization\tof\tintangible\tassets | (20.2) | (47.2) | 27.0 | (57.2) % |
| Impairments\tof\tassets | (55.4) | (5.0) | (50.4) | 1,008.0\t % |
| Restructuring\tcharges | (23.6) | — | (23.6) | NM |
| Operating\tincome | 595.5 | 653.4 | (57.9) | (8.9) % |
| Operating\tincome\tas\t%\tof\tnet\trevenues | 11.9% | 13.4% |  |  |
| Foreign\tcurrency\tgains\t(losses) | 1.6 | (6.4) | 8.0 | (125.0) % |
| Interest\texpense | (26.6) | (25.7) | (0.9) | 3.5\t % |
| Interest\tand\tother\tincome,\tnet | 22.0 | 24.7 | (2.7) | (10.9) % |
| Equity\tin\tincome\t(loss)\tof\tequity-method\tinvestees | (5.0) | (1.8) | (3.2) | 177.8\t % |
| Minority\tinterest\texpense | — | (2.1) | 2.1 | (100.0) % |
| Income\tbefore\tprovision\tfor\tincome\ttaxes | 587.5 | 642.1 | (54.6) | (8.5) % |
| Provision\tfor\tincome\ttaxes | (181.5) | (222.3) | 40.8 | (18.4) % |
| Effective\ttax\trate(b) | 30.9% | 34.6% |  |  |
| Net\tincome | $406.0 | $419.8 | $(13.8) | (3.3) % |
| Net\tincome\tper\tcommon\tshare\t—\tBasic | $4.09 | $4.10 | $(0.01) | (0.2) % |
| Net\tincome\tper\tcommon\tshare\t—\tDiluted | $4.01 | $3.99 | $0.02 | 0.5\t % |

(a) Includes	total	depreciation	expense	of	$164.2	million	and	$154.1	million	for	Fiscal	2009	and	Fiscal	2008,	respectively.

(b) Effective	tax	rate	is	calculated	by	dividing	the	provision	for	income	taxes	by	income	before	provision	for	income	taxes.

NM Not	meaningful.

Net	Revenues.		Net	revenues	increased	by	$138.8	million,	or	2.8%,	to	$5.019	billion	in	Fiscal	2009	from	$4.880	billion	in	Fiscal	2008.	The	increase	was	principally	due	to	growth	in	our	global Wholesale	business,	increased	global	Retail	sales,	and	net	favorable	foreign	currency	effects.	Excluding	the	effect	of	foreign	currency,	net	revenues	increased	by	2.2%.	On	a	reported	basis,	Wholesale revenues	increased	by	$129.1	million,	primarily	as	a	result	of	the	inclusion	of	a	full	year	of	revenues	from	the	newly	launched	American	Living	product	line	and	increased	revenues	from	our	European and	Japanese	businesses,	offset	in	part	by	decreased	sales	in	our	core	domestic	product	lines.	Retail	revenues	increased	by	$23.9	million	primarily	as	a	result	of	continued	global	store	expansion	and growth	in	RalphLauren.com	sales,	partially	offset	by	a	net	decline	in	comparable	store	sales.	Licensing	revenue	decreased	by	$14.2	million,	primarily	due	to	a	decrease	in	international	licensing	royalties as	a	result	of	the	Japanese	Childrenswear	and	Golf	Acquisition	(see	"Recent	Developments"	for	further	discussion).

Net	revenues	for	our	three	business	segments	are	provided	below:

# Fiscal	Years	Ended

|  | March	28, | March	29, |  |  |
| :--- | :--- | :--- | :--- | :--- |
|  | 2009 | 2008 | $\tChange | %\tChange |
|  |  | (millions) |  |  |
| Net\tRevenues: |  |  |  |  |
| Wholesale | $2,887.2 | $2,758.1 | $129.1 | 4.7\t % |
| Retail | 1,936.5 | 1,912.6 | 23.9 | 1.2\t % |
| Licensing | 195.2 | 209.4 | (14.2) | (6.8) % |
| Total\tnet\trevenues | $5,018.9 | $4,880.1 | $138.8 | 2.8\t % |

Wholesale	net	revenues	—	The	net	increase	primarily	reflects:

•	a	$74	million	net	increase	in	our	European	businesses	on	a	constant	currency	basis	driven	by	increased	sales	in	our	menswear,	womenswear	and	childrenswear	product	lines,	partially	offset by	an	increase	in	promotional	activity;

•	a	$47	million	net	increase	in	our	Japanese	operations	on	a	constant	currency	basis	primarily	as	a	result	of	the	inclusion	of	revenues	from	the	Japanese	Childrenswear	and	Golf	Acquisition	(see "Recent	Developments"	for	further	discussion),	offset	in	part	by	sales	declines	in	our	core	businesses;	and

•	a	$37	million	net	increase	in	revenues	due	to	a	favorable	foreign	currency	effect	related	to	the	strengthening	of	the	Yen,	partially	offset	by	an	unfavorable	foreign	currency	effect	related	to	the weakening	of	the	Euro,	both	in	comparison	to	the	U.S.	dollar	in	Fiscal	2009.

The	above	increases	were	partially	offset	by:

•	a	$29	million	aggregate	net	decrease	in	our	domestic	businesses	primarily	due	to	reduced	shipments	across	our	core	menswear,	womenswear	and	childrenswear	product	lines	as	a	result	of	the ongoing	challenging	U.S.	retail	environment	(as	discussed	further	in	the	"Overview"	section).	Offsetting	this	decrease	was	the	inclusion	of	a	full	year	of	revenues	from	the	newly	launched American	Living	product	line	and	an	increase	in	footwear	sales	largely	attributable	to	increased	door	penetration.

Retail	net	revenues	—	For	purposes	of	the	discussion	of	Retail	operating	performance	below,	we	refer	to	the	measure	"comparable	store	sales."	Comparable	store	sales	refer	to	the	growth	of	sales in	stores	that	are	open	for	at	least	one	full	fiscal	year.	Sales	for	stores	that	are	closing	during	a	fiscal	year	are	excluded	from	the	calculation	of	comparable	store	sales.	Sales	for	stores	that	are	either relocated,	enlarged	(as	defined	by	gross	square	footage	expansion	of	25%	or	greater)	or	closed	for	30	or	more	consecutive	days	for	renovation	are	also	excluded	from	the	calculation	of	comparable	store sales	until	such	stores	have	been	in	their	location	or	in	a	newly	renovated	state	for	at	least	one	full	fiscal	year.	Comparable	store	sales	information	includes	both	Ralph	Lauren	(including	Rugby)	and	Club Monaco	stores.

The	net	increase	in	Retail	net	revenues	primarily	reflects:

•	an	$81	million	aggregate	net	increase	in	sales	from	non-comparable	stores,	primarily	relating	to	new	store	openings	within	the	past	twelve	months.	There	was	a	net	increase	in	average	global store	count	of	21	stores,	to	a	total	of	326	stores,	as	compared	to	the	prior	fiscal	year.	The	net	increase	in	store	count	was	primarily	due	to	a	number	of	new	domestic	and	international	full-price and	factory	store	openings;	and

•	an	$84	million	aggregate	net	decrease	in	comparable	store	sales	driven	by	our	global	full-price	stores,	including	an	aggregate	net	unfavorable	foreign	currency	effect	of	$13	million	primarily related	to	the

weakening	of	the	Euro	in	comparison	to	the	U.S.	dollar	in	Fiscal	2009.	Comparable	store	sales	are	provided	below:

# Fiscal	Year	Ended

Licensing	revenue	—	The	net	decrease	primarily	reflects:

•	a	$17	million	decrease	in	international	licensing	royalties,	primarily	due	to	the	Japanese	Childrenswear	and	Golf	Acquisition	(see	"Recent	Developments"	for	further	discussion).

The	above	decrease	was	partially	offset	by:

•	a	$3	million	increase	in	domestic	licensing	royalties,	primarily	driven	by	increases	in	men's	personal	apparel	and	the	inclusion	of	a	full	year	of	royalties	for	American	Living.	These	increases were	partially	offset	by	a	decrease	in	fragrance-related	royalties.

Gross	Profit.		Cost	of	goods	sold	includes	the	expenses	incurred	to	acquire	and	produce	inventory	for	sale,	including	product	costs,	freight-in,	and	import	costs,	as	well	as	changes	in	reserves	for shrinkage	and	inventory	realizability.	The	costs	of	selling	merchandise,	including	those	associated	with	preparing	the	merchandise	for	sale,	such	as	picking,	packing,	warehousing	and	order	charges,	are included	in	SG&A	expenses.

Gross	profit	increased	by	$92.6	million,	or	3.5%,	to	$2.731	billion	in	Fiscal	2009	from	$2.638	billion	in	Fiscal	2008.	Gross	profit	as	a	percentage	of	net	revenues	increased	by	30	basis	points	to 54.4%	in	Fiscal	2009	from	54.1%	in	Fiscal	2008,	primarily	driven	by	the	growth	of	our	European	and	Japanese	wholesale	operations,	as	well	as	the	net	decrease	of	unfavorable	purchase	accounting effects	associated	with	prior	business	acquisitions.	These	increases	were	partially	offset	by	increased	markdown	activity	and	higher	reductions	in	the	carrying	cost	of	our	retail	inventory,	largely	as	a result	of	the	current	economic	downturn.

Gross	profit	as	a	percentage	of	net	revenues	is	dependent	upon	a	variety	of	factors,	including	changes	in	the	relative	sales	mix	among	distribution	channels,	changes	in	the	mix	of	products	sold,	the timing	and	level	of	promotional	activities,	foreign	currency	exchange	rates,	and	fluctuations	in	material	costs.	These	factors,	among	others,	may	cause	gross	profit	as	a	percentage	of	net	revenues	to fluctuate	from	year	to	year.

Selling,	General	and	Administrative	Expenses.		SG&A	expenses	primarily	include	compensation	and	benefits,	marketing,	distribution,	bad	debts,	information	technology,	facilities,	legal	and other	costs	associated	with	finance	and	administration.	SG&A	expenses	increased	by	$103.5	million,	or	5.4%,	to	$2.036	billion	in	Fiscal	2009	from	$1.932	billion	in	Fiscal	2008.	The	increase	included	a net	unfavorable	foreign	currency	effect	of	approximately	$14	million,	primarily	related	to	the	strengthening	of	the	Yen,	partially	offset	by	the	weakening	of	the	Euro,	both	in	comparison	to	the	U.S.	dollar in	Fiscal	2009.	SG&A	expenses	as	a	percent	of	net	revenues	increased	to	40.6%	in	Fiscal	2009	from	39.6%	in	Fiscal	2008.	The	100	basis	point	increase	was	primarily	driven	by	increased

operating	expenses	attributable	to	our	new	business	initiatives.	The	$103.5	million	increase	in	SG&A	expenses	was	primarily	driven	by:

•	the	inclusion	of	SG&A	costs	of	approximately	$38	million	related	to	our	newly	acquired	Japanese	Childrenswear	and	Golf	operations,	including	costs	incurred	pursuant	to	transition	service arrangements	(see	"Recent	Developments"	for	further	discussion);

•	higher	compensation-related	expenses	of	approximately	$35	million	principally	relating	to	increased	selling	costs	associated	with	higher	retail	sales	and	our	ongoing	product	line	expansion, including	American	Living	and	a	dedicated	dress	business	across	multiple	brands.	These	increases	were	partially	offset	by	lower	stock-based	compensation	expense	largely	driven	by	a decrease	in	the	Company's	share	price	as	of	the	date	of	its	annual	equity	award	grant	in	the	second	quarter	of	Fiscal	2009	compared	to	the	share	price	as	of	the	comparable	grant	date	in	Fiscal 2008;

•	an	approximate	$29	million	increase	in	rent	and	utility	costs	to	support	the	ongoing	global	growth	of	our	businesses,	including	rent	expense	related	to	certain	retail	stores	scheduled	to	open	in Fiscal	2010;

•	an	approximate	$12	million	net	increase	in	litigation-related	charges,	including	approximately	$4	million	related	to	the	reversal	of	a	reserve	for	credit	card	matters	in	Fiscal	2008;	and

•	an	approximate	$11	million	increase	in	bad	debt	expenses	due	largely	to	the	negative	effects	of	the	slowdown	in	the	global	economy	on	the	financial	condition	and	liquidity	of	our	customer base.

•	an	approximate	$20	million	decrease	in	brand-related	marketing	and	advertising	costs	primarily	as	a	result	of	the	implementation	of	related	cost-savings	initiatives	in	response	to	the	current economic	downturn,	as	well	as	the	absence	of	costs	associated	with	the	Company's	40th	Anniversary	celebration	in	Fiscal	2008.

Amortization	of	Intangible	Assets.		Amortization	of	intangible	assets	decreased	by	$27.0	million,	or	57.2%,	to	$20.2	million	in	Fiscal	2009	from	$47.2	million	in	Fiscal	2008.	The	decrease	was primarily	due	to	the	absence	of	the	amortization	of	the	licenses	acquired	in	the	Japanese	Business	Acquisitions,	which	were	fully	amortized	by	the	end	of	Fiscal	2008.	See	"Recent	Developments"	for further	discussion	of	the	acquisitions.

Impairments	of	Assets.		An	aggregate	non-cash	impairment	charge	of	$55.4	million	was	recognized	in	Fiscal	2009,	compared	to	$5.0	million	in	Fiscal	2008.	These	charges	reduced	the	net	carrying values	of	certain	long-lived	assets,	primarily	in	the	Company's	Retail	segment,	to	their	estimated	fair	values.	These	impairment	charges	were	primarily	attributable	to	lower-than-expected	operating performances	in	certain	stores,	which	in	Fiscal	2009,	arose	in	large	part	due	to	the	significant	contraction	in	consumer	spending	experienced	during	the	latter	half	of	that	fiscal	year.	See	Note	11	to	the accompanying	audited	consolidated	financial	statements	for	further	discussion.

Restructuring	Charges.		Restructuring	charges	of	$23.6	million	were	recognized	in	Fiscal	2009	primarily	associated	with	a	restructuring	plan	initiated	during	the	fourth	quarter	of	Fiscal	2009	to better	align	the	Company's	cost	base	with	lower	sales	and	operating	margin	trends	associated	with	the	recent	slowdown	in	consumer	spending,	and	to	improve	overall	operating	effectiveness	(the	"Fiscal 2009	Restructuring	Plan").	This	Fiscal	2009	Restructuring	Plan	included	a	reduction	in	workforce	and	the	closure	of	certain	underperforming	retail	stores.	No	restructuring	charges	were	recorded	in	Fiscal 2008.	See	Note	12	to	the	accompanying	audited	consolidated	financial	statements	for	further	discussion.

Operating	Income.		Operating	income	decreased	by	$57.9	million,	or	8.9%,	to	$595.5	million	in	Fiscal	2009	from	$653.4	million	in	Fiscal	2008.	Operating	income	as	a	percentage	of	net	revenues decreased	150	basis	points	to	11.9%	in	Fiscal	2009	from	13.4%	in	Fiscal	2008.	The	decrease	in	operating	income	as	a	percentage	of	net	revenues	primarily	reflected	increases	in	SG&A	expenses,	and $79.0	million	of	pretax	charges	related	to	asset	impairments	and	restructurings,	partially	offset	by	a	decrease	in	amortization	of	intangible	assets,	as	previously	discussed.

Operating	income	as	reported	for	our	three	business	segments	is	provided	below:

|  | March	28, | March	29, |  |  |
| :--- | :--- | :--- | :--- | :--- |
|  | 2009 | 2008 | $\tChange | %\tChange |
|  |  | (millions) |  |  |
| Operating\tIncome: |  |  |  |  |
| Wholesale | $613.3 | $565.4 | $47.9 | 8.5\t % |
| Retail | 108.2 | 204.2 | (96.0) | (47.0) % |
| Licensing | 103.6 | 96.7 | 6.9 | 7.1\t % |
|  | 825.1 | 866.3 | (41.2) | (4.8) % |
| Less: |  |  |  |  |
| Unallocated\tcorporate\texpenses | (206.5) | (217.0) | 10.5 | (4.8) % |
| Unallocated\tlegal\tand\trestructuring\tcharges | (23.1) | 4.1 | (27.2) | (663.4) % |
| Total\toperating\tincome | $595.5 | $653.4 | $(57.9) | (8.9) % |

Wholesale	operating	income	increased	by	$47.9	million	primarily	as	a	result	of	higher	revenues,	as	well	as	improved	gross	margin	largely	driven	by	our	European	and	Japanese	wholesale operations.	The	increase	also	was	due	to	the	net	decrease	of	unfavorable	purchase	accounting	effects	primarily	associated	with	prior	business	acquisitions.	These	increases	were	partially	offset	by	higher SG&A	expenses	attributable	largely	to	our	new	business	initiatives.

Retail	operating	income	decreased	by	$96.0	million	primarily	as	a	result	of	$47.0	million	of	higher	impairment-related	charges,	higher	reductions	in	the	carrying	cost	of	our	retail	inventory,	and higher	rent	and	occupancy	costs.	The	decrease	was	partially	offset	by	higher	revenues	and	the	absence	of	certain	unfavorable	purchase	accounting	effects	associated	with	the	RL	Media	Minority	Interest Acquisition	included	in	the	prior	fiscal	year.

Licensing	operating	income	increased	by	$6.9	million	primarily	as	a	result	of	a	decrease	in	amortization	of	intangible	assets	due	to	the	absence	of	the	amortization	of	the	license	acquired	in	the Japanese	Business	Acquisitions,	which	was	fully	amortized	by	the	end	of	Fiscal	2008.	Also	contributing	to	the	increased	operating	income	was	an	increase	in	domestic	licensing	royalties,	primarily	driven by	the	inclusion	of	royalties	for	American	Living.	These	increases	were	offset	in	part	by	a	net	decrease	in	international	royalties	primarily	due	to	the	Japanese	Childrenswear	and	Golf	Acquisition	(see "Recent	Developments"	for	further	discussion).

Unallocated	corporate	expenses	decreased	by	$10.5	million	primarily	as	a	result	of	a	decrease	in	brand-related	marketing	and	advertising	costs,	as	well	as	lower	stock-based	compensation expense,	as	previously	discussed.

Unallocated	legal	and	restructuring	charges	of	$23.1	million	in	Fiscal	2009	were	comprised	of	restructuring	charges	of	$23.6	million	primarily	associated	with	the	Fiscal	2009	Restructuring	Plan, as	previously	discussed,	offset	by	a	reversal	of	an	excess	reserve	in	the	amount	of	$0.5	million	related	to	the	Credit	Card	Matter	(as	discussed	in	Note	16	to	the	accompanying	audited	consolidated financial	statements).	In	Fiscal	2008,	unallocated	legal	and	restructuring	charges	were	comprised	of	a	reversal	of	an	excess	reserve	in	the	amount	of	$4.1	million	related	to	the	Credit	Card	Matter.

Foreign	Currency	Gains	(Losses).		The	effect	of	foreign	currency	exchange	rate	fluctuations	resulted	in	a	gain	of	$1.6	million	in	Fiscal	2009,	compared	to	a	loss	of	$6.4	million	in	Fiscal	2008. The	prior	fiscal	year	loss	included	a	$1.6	million	write-off	of	foreign	currency	option	contracts,	entered	into	to	manage	certain	foreign	currency	exposure	associated	with	the	Japanese	Business Acquisitions,	which	expired	unexercised.	Excluding	the	aforementioned	transaction,	foreign	currency	gains	increased	in	Fiscal	2009	as	compared	to	Fiscal	2008,	primarily	due	to	the	timing	of	the settlement	of	intercompany	receivables	and	payables	(that	were	not	of	a	long-term	investment	nature)	between	certain	of	our	international	and	domestic	subsidiaries.	Foreign	currency	gains	and	losses	are unrelated	to	the	impact	of	changes	in	the	value	of	the	U.S.	dollar	when	operating	results	of	our	foreign	subsidiaries	are	translated	to	U.S.	dollars.

Interest	Expense.		Interest	expense	includes	the	borrowing	costs	of	our	outstanding	debt,	including	amortization	of	debt	issuance	costs,	and	interest	related	to	our	capital	lease	obligations.	Interest expense	increased	by	$0.9	million,	to	$26.6	million	in	Fiscal	2009	from	$25.7	million	in	Fiscal	2008.	This	increase	is	primarily	due	to	an	increase	in	interest	expense	related	to	capital	lease	obligations, offset	in	part	by	a	decrease	in	interest	expense	related	to	borrowings	under	a	one-year	term	loan	agreement	repaid	by	the	Company	in	May	2008.

Interest	and	Other	Income,	net.		Interest	and	other	income,	net,	decreased	by	$2.7	million,	to	$22.0	million	in	Fiscal	2009	from	$24.7	million	in	Fiscal	2008.	This	decrease	was	primarily	driven	by lower	yields	relating	to	lower	market	rates	of	interest	in	Fiscal	2009,	offset	in	part	by	an	increase	in	our	average	balance	of	cash	and	short-term	investments	during	Fiscal	2009.

Equity	in	Income	(Loss)	of	Equity-Method	Investees.		The	equity	in	loss	of	equity-method	investees	of	$5.0	million	in	Fiscal	2009	and	$1.8	million	in	Fiscal	2008	primarily	related	to	certain start-up	costs	associated	with	the	recently	formed	joint	venture,	the	RL	Watch	Company,	which	the	Company	accounts	for	under	the	equity	method	of	accounting.

Minority	Interest	Expense.		Minority	interest	expense	of	$2.1	million	in	Fiscal	2008	related	to	the	Company's	remaining	50%	interest	in	PRL	Japan,	which	was	acquired	in	May	2007,	and	the allocation	of	Impact	21's	net	income	to	the	holders	of	the	80%	interest	not	owned	by	the	Company	prior	to	the	closing	date	of	the	related	acquisition.	No	minority	interest	expense	was	recorded	in	Fiscal 2009	as	both	of	these	companies	are	now	wholly	owned.

Provision	for	Income	Taxes.		The	provision	for	income	taxes	represents	federal,	foreign,	state	and	local	income	taxes.	The	provision	for	income	taxes	decreased	by	$40.8	million,	or	18.4%,	to $181.5	million	in	Fiscal	2009	from	$222.3	million	in	Fiscal	2008.	The	decrease	in	provision	for	income	taxes	was	principally	due	to	an	overall	decrease	in	pretax	income	in	Fiscal	2009	compared	to Fiscal	2008.	This	decrease	also	was	due	to	a	reduction	in	our	reported	effective	tax	rate	of	370	basis	points,	to	30.9%	in	Fiscal	2009	from	34.6%	in	Fiscal	2008.	The	lower	effective	tax	rate	was	primarily due	to	a	shift	in	the	geographic	mix	of	earnings.	In	particular,	there	was	a	greater	proportion	of	earnings	generated	in	lower-taxed	jurisdictions	and	the	tax	benefits	associated	with	the	asset	impairment	and restructuring	charges	were	recognized	in	higher-taxed	jurisdictions.	The	effective	tax	rate	differs	from	statutory	rates	due	to	the	effect	of	state	and	local	taxes,	tax	rates	in	foreign	jurisdictions	and	certain nondeductible	expenses.	Our	effective	tax	rate	will	change	from	year	to	year	based	on	non-recurring	factors	including,	but	not	limited	to,	the	geographic	mix	of	earnings,	the	timing	and	amount	of	foreign dividends,	enacted	tax	legislation,	state	and	local	taxes,	tax	audit	findings	and	settlements,	and	the	interaction	of	various	global	tax	strategies.

Net	Income.		Net	income	decreased	by	$13.8	million,	or	3.3%,	to	$406.0	million	in	Fiscal	2009	from	$419.8	million	in	Fiscal	2008.	The	decrease	in	net	income	principally	related	to	a $57.9	million	decrease	in	operating	income,	offset	in	part	by	a	$40.8	million	decrease	in	the	provision	for	income	taxes,	as	previously	discussed.	These	results	were	negatively	impacted	by	$79.0	million of	pretax	charges	recognized	in	Fiscal	2009	related	to	asset	impairments	and	restructurings,	which	had	an	aggregate	effect	of	reducing	net	income	in	Fiscal	2009	by	$49.7	million.

Net	Income	Per	Diluted	Share.		Net	income	per	diluted	share	increased	by	$0.02,	or	0.5%,	to	$4.01	per	share	in	Fiscal	2009	from	$3.99	per	share	in	Fiscal	2008,	as	the	effect	of	lower	weighted- average	diluted	shares	outstanding	was	mostly	offset	by	the	decrease	in	net	income	in	Fiscal	2009.	These	results	were	negatively	impacted	by	$79.0	million	of	pretax	charges	recognized	in	Fiscal	2009 related	to	asset	impairments	and	restructurings,	which	had	an	aggregate	effect	of	reducing	net	income	per	diluted	share	in	Fiscal	2009	by	$0.49.

|  | March	29, | March	31, |  |  |
| :--- | :--- | :--- | :--- | :--- |
|  | 2008 | 2007 | $\tChange | %\tChange |
|  |  | (millions,\texcept\tper\tshare\tdata) |  |  |
| Net\trevenues | $4,880.1 | $4,295.4 | $584.7 | 13.6\t % |
| Cost\tof\tgoods\tsold(a) | (2,242.0) | (1,959.2) | (282.8) | 14.4\t % |
| Gross\tprofit | 2,638.1 | 2,336.2 | 301.9 | 12.9\t % |
| Gross\tprofit\tas\t%\tof\tnet\trevenues | 54.1% | 54.4% |  |  |
| Selling,\tgeneral\tand\tadministrative\texpenses(a) | (1,932.5) | (1,663.4) | (269.1) | 16.2\t % |
| SG&A\tas\t%\tof\tnet\trevenues | 39.6% | 38.7% |  |  |
| Amortization\tof\tintangible\tassets | (47.2) | (15.6) | (31.6) | 202.6\t % |
| Impairments\tof\tassets | (5.0) | — | (5.0) | NM |
| Restructuring\tcharges | — | (4.6) | 4.6 | (100.0) % |
| Operating\tincome | 653.4 | 652.6 | 0.8 | 0.1\t % |
| Operating\tincome\tas\t%\tof\tnet\trevenues | 13.4% | 15.2% |  |  |
| Foreign\tcurrency\tgains\t(losses) | (6.4) | (1.5) | (4.9) | 326.7\t % |
| Interest\texpense | (25.7) | (21.6) | (4.1) | 19.0\t % |
| Interest\tand\tother\tincome,\tnet | 24.7 | 26.1 | (1.4) | (5.4) % |
| Equity\tin\tincome\t(loss)\tof\tequity-method\tinvestees | (1.8) | 3.0 | (4.8) | (160.0) % |
| Minority\tinterest\texpense | (2.1) | (15.3) | 13.2 | (86.3) % |
| Income\tbefore\tprovision\tfor\tincome\ttaxes | 642.1 | 643.3 | (1.2) | (0.2) % |
| Provision\tfor\tincome\ttaxes | (222.3) | (242.4) | 20.1 | (8.3) % |
| Effective\ttax\trate(b) | 34.6% | 37.7% |  |  |
| Net\tincome | $419.8 | $400.9 | $18.9 | 4.7\t % |
| Net\tincome\tper\tcommon\tshare\t—\tBasic | $4.10 | $3.84 | $0.26 | 6.8\t % |
| Net\tincome\tper\tcommon\tshare\t—\tDiluted | $3.99 | $3.73 | $0.26 | 7.0\t % |

Net	Revenues.		Net	revenues	increased	by	$584.7	million,	or	13.6%,	to	$4.880	billion	in	Fiscal	2008	from	$4.295	billion	in	Fiscal	2007.	The	increase	was	driven	by	a	combination	of	organic growth,	acquisitions	and	favorable	foreign	currency	effects.	Excluding	the	effect	of	acquisitions,	net	revenues	increased	by	$371.2	million,	or	8.6%.	On	a	reported	basis,	Wholesale	revenues	increased	by $442.2	million	primarily	as	a	result	of	incremental	revenues	from	the	newly	acquired	Impact	21	and	Small	Leathergoods	businesses,	the	inclusion	of	revenues	from	the	initial	shipments	of	the	American Living	product	line	to	JCPenney	and	increased	sales	in	our	global	menswear	and	womenswear	product	lines,	primarily	driven	by	strong	performance	in	Europe.	The	increase	in	net	revenues	also	was driven	by	an	increase	of	$169.4	million	in	our	Retail	segment	revenues	as	a	result	of	an	increase	in	comparable	global	retail	store	sales,	continued	global	store	expansion	and	growth	in	RalphLauren.com sales.	The	increase	in	net	revenues	was	partially	offset	by	a	decrease	of	$26.9	million	in	licensing	revenue,	primarily	due	to	a	decrease	in

international	licensing	royalties	as	a	result	of	the	loss	of	licensing	revenues	from	Impact	21,	which	is	now	consolidated	as	part	of	the	Wholesale	segment.	Also	contributing	to	the	decrease	in	licensing revenue	was	a	net	decrease	in	domestic	licensing	royalties,	primarily	due	to	the	absence	of	approximately	$8	million	of	minimum	royalty	and	design-service	fees	received	in	connection	with	the termination	of	a	licensing	arrangement	in	the	prior	fiscal	year.

|  | March	29, | March	31, |  |  |
| :--- | :--- | :--- | :--- | :--- |
|  | 2008 | 2007 | $\tChange | %\tChange |
|  |  | (millions) |  |  |
| Net\tRevenues: |  |  |  |  |
| Wholesale | $2,758.1 | $2,315.9 | $442.2 | 19.1\t % |
| Retail | 1,912.6 | 1,743.2 | 169.4 | 9.7\t % |
| Licensing | 209.4 | 236.3 | (26.9) | (11.4) % |
| Total\tnet\trevenues | $4,880.1 | $4,295.4 | $584.7 | 13.6\t % |

•	the	inclusion	of	$254	million	of	revenues	from	the	newly	acquired	Impact	21	and	Small	Leathergoods	businesses,	net	of	intercompany	eliminations;

•	an	approximate	$47	million	increase	in	our	European	businesses	on	a	constant	currency	basis	driven	by	increased	sales	in	our	menswear	and	womenswear	product	lines;

•	an	aggregate	$81	million	net	increase	in	our	U.S.	businesses.	The	net	increase	was	primarily	due	to	the	initial	shipments	of	the	American	Living	product	line	to	JCPenney;	an	increase	in	our menswear	shipments;	a	net	increase	in	womenswear,	primarily	driven	by	Chaps,	partially	offset	by	increased	promotional	activity;	and	an	increase	in	footwear	attributable	to	increased	door penetration.	Offsetting	these	increases	were	a	decline	in	our	childrenswear	product	lines	due	to	weaker	sales	at	department	stores	and	increased	promotional	activity;	and	a	planned	reduction in	our	off-price	channel	denim	business;	and

•	a	$60	million	increase	in	revenues	due	to	a	favorable	foreign	currency	effect,	primarily	related	to	the	continued	strengthening	of	the	Euro	in	comparison	to	the	U.S.	dollar	in	Fiscal	2008.

Retail	net	revenues	—	The	increase	primarily	reflects:

•	a	$87	million	aggregate	net	increase	in	comparable	full-price	and	factory	store	sales	on	a	global	basis,	including	a	net	aggregate	favorable	$22	million	foreign	currency	effect.	This	net increase	was	driven	by	increases	in	comparable	store	sales	as	provided	below:

•	a	$52	million	aggregate	net	increase	in	sales	from	non-comparable	stores,	primarily	relating	to	new	store	openings	within	the	past	fiscal	year.	There	was	a	net	increase	in	average	global	store count	of	9	stores,	to	a	total	of	313	stores,	compared	to	the	prior	fiscal	year.	The	net	increase	in	store	count	was	primarily	due	to	several	new	domestic	and	international	full-price	and	factory store	openings;	and

•	a	$26	million	net	decrease	in	international	licensing	royalties,	primarily	due	to	the	loss	of	licensing	revenues	from	Impact	21,	which	is	now	consolidated	as	part	of	the	Wholesale	segment;	and •	a	$1	million	net	decrease	in	domestic	licensing	royalties,	primarily	due	to	the	absence	of	approximately	$8	million	of	minimum	royalty	and	design-service	fees	received	in	connection	with	the termination	of	a	licensing	arrangement	in	the	prior	fiscal	year.	The	net	decrease	was	partially	offset	by	an	increase	in	eyewear-related	royalties	as	a	result	of	the	licensing	agreement	entered into	with	Luxottica	Group,	S.p.A.	and	affiliates,	which	took	effect	on	January	1,	2007.

Gross	profit	increased	by	$301.9	million,	or	12.9%,	to	$2.638	billion	in	Fiscal	2008	from	$2.336	billion	in	Fiscal	2007.	Gross	profit	as	a	percentage	of	net	revenues	decreased	by	30	basis	points	to 54.1%	in	Fiscal	2008	from	54.4%	in	Fiscal	2007,	primarily	due	to	the	dilutive	effect	of	our	recent	acquisitions.	Excluding	the	effect	of	acquisitions,	gross	profit	increased	by	$208.6	million,	or	8.9%,	and gross	profit	as	a	percentage	of	net	revenues	increased	10	basis	points	compared	to	Fiscal	2007.	The	increase	in	gross	profit	as	a	percentage	of	net	revenues	was	due	to	improved	performance	in	our European	wholesale	operations	which	generally	carry	higher	margins,	offset	in	part	by	increased	domestic	promotional	activity	as	well	as	a	slight	change	in	the	overall	relative	sales	mix	between	the Wholesale	segment	and	the	higher	margin	Retail	and	Licensing	segments.

Selling,	General	and	Administrative	Expenses.		SG&A	expenses	primarily	include	compensation	and	benefits,	marketing,	distribution,	bad	debts,	information	technology,	facilities,	legal	and other	costs	associated	with	finance	and	administration.	SG&A	expenses	increased	by	$269.1	million,	or	16.2%,	to	$1.932	billion	in	Fiscal	2008	from	$1.663	billion	in	Fiscal	2007.	The	increase	included approximately	$36	million	of	unfavorable	foreign	currency	effects,	primarily	related	to	the	continued	strengthening	of	the	Euro	in	comparison	to	the	U.S.	dollar	during	Fiscal	2008.	SG&A	expenses	as	a percent	of	net	revenues	increased	to	39.6%	in	Fiscal	2008	from	38.7%	in	Fiscal	2007.	The	net	90	basis	point	increase	was	primarily	associated	with	operating	expenses	at	the	Company's	newly	acquired businesses	and	certain	start-up	costs	related	to	new	business	launches.	The	$269.1	million	increase	in	SG&A	expenses	was	primarily	driven	by:

•	the	inclusion	of	SG&A	costs	of	approximately	$91	million	for	our	newly	acquired	Impact	21	and	Small	Leathergoods	businesses,	including	costs	incurred	pursuant	to	transition	service arrangements;

•	higher	stock-based	compensation	expense	of	approximately	$27	million	primarily	due	to	an	increase	in	the	Company's	share	price	as	of	the	date	of	its	annual	equity	award	grant	in	the	second quarter	of	Fiscal	2008	compared	to	the	share	price	as	of	the	comparable	grant	date	in	Fiscal	2007;

•	higher	compensation-related	expenses	(excluding	stock-based	compensation)	of	approximately	$56	million,	principally	relating	to	increased	selling	costs	associated	with	higher	retail	and wholesale	sales	and	our	ongoing	product	line	expansion,	including	American	Living	and	a	dedicated	dress	business	across	multiple	brands,	as	well	as	severance-related	costs;

•	an	approximate	$39	million	increase	in	rent	and	utility	costs	to	support	the	ongoing	global	growth	of	our	businesses,	including	rent	expense	related	to	certain	retail	stores	scheduled	to	open	in Fiscal	2009;	and

•	an	approximate	$25	million	increase	in	depreciation	expense	primarily	associated	with	global	retail	store	expansion,	construction	and	renovation	of	department	store	shop-within-shops	and investments	in	our	facilities	and	technological	infrastructure.

Amortization	of	Intangible	Assets.		Amortization	of	intangible	assets	increased	by	$31.6	million,	to	$47.2	million	in	Fiscal	2008	from	$15.6	million	in	Fiscal	2007.	The	net	increase	was	primarily due	to	the	amortization	of	intangible	assets	acquired	in	connection	with	the	Company's	recent	acquisitions.	See	Note	5	to	the	accompanying	audited	consolidated	financial	statements	for	further discussion	of	the	acquisitions.

Impairments	of	Assets.		A	non-cash	impairment	charge	of	$5.0	million	was	recognized	in	Fiscal	2008	to	reduce	the	carrying	value	of	certain	long-lived	assets	in	the	Company's	Retail	segment	to their	estimated	fair	value.	The	impairment	was	primarily	attributable	to	lower-than-expected	operating	cash	flow	performance	in	certain	stores.	No	impairment	charges	were	recognized	in	Fiscal	2007. See	Note	11	to	the	accompanying	audited	consolidated	financial	statements	for	further	discussion.

Restructuring	Charges.		Restructuring	charges	of	$4.6	million	were	recognized	in	Fiscal	2007	primarily	associated	with	the	Club	Monaco	retail	business.	No	significant	restructuring	charges	were recognized	in	Fiscal	2008.	See	Note	12	to	the	accompanying	audited	consolidated	financial	statements	for	further	discussion.

Operating	Income.		Operating	income	increased	slightly	by	$0.8	million,	or	0.1%,	to	$653.4	million	in	Fiscal	2008	from	$652.6	million	in	Fiscal	2007.	Operating	income	as	a	percentage	of revenue	decreased	180	basis	points,	to	13.4%	in	Fiscal	2008	from	15.2%	in	Fiscal	2007,	primarily	due	to	the	effect	of	purchase	accounting	relating	to	the	acquisitions.	Excluding	the	effect	of	acquisitions, operating	income	increased	by	$43.0	million,	or	6.6%,	while	operating	income	as	a	percentage	of	net	revenues	decreased	30	basis	points	in	Fiscal	2008.	The	decrease	in	operating	income	as	a	percentage of	net	revenues	primarily	reflected	the	increase	in	SG&A	expenses	due	to	business	expansion,	partially	offset	by	an	increase	in	gross	profit	margin	as	previously	discussed.

|  | March	29, | March	31, |  |  |
| :--- | :--- | :--- | :--- | :--- |
|  | 2008 | 2007 | $\tChange | %\tChange |
|  |  | (millions) |  |  |
| Operating\tIncome: |  |  |  |  |
| Wholesale | $565.4 | $477.8 | $87.6 | 18.3\t % |
| Retail | 204.2 | 224.2 | (20.0) | (8.9) % |
| Licensing | 96.7 | 141.6 | (44.9) | (31.7) % |
|  | 866.3 | 843.6 | 22.7 | 2.7\t % |
| Less: |  |  |  |  |
| Unallocated\tcorporate\texpenses | (217.0) | (183.4) | (33.6) | 18.3\t % |
| Unallocated\tlegal\tand\trestructuring\tcharges | 4.1 | (7.6) | 11.7 | (153.9) % |
| Total\toperating\tincome | $653.4 | $652.6 | $0.8 | 0.1\t % |

Wholesale	operating	income	increased	by	$87.6	million,	including	the	favorable	effects	from	the	Japanese	Business	and	Small	Leathergoods	Business	Acquisitions.	Excluding	the	effects	of	these acquisitions,	Wholesale	operating	income	increased	by	$61.4	million	primarily	as	a	result	of	increased	net	sales,	including	shipments	of	American	Living,	and	improved	gross	margin	primarily	in	our European	wholesale	operations,	offset	in	part	by	increased	domestic	promotional	activity	in	certain	product	categories.	The	increase	was	partially	offset	by	higher	net	SG&A	expenses	in	support	of	our new	product	lines.

Retail	operating	income	decreased	by	$20.0	million,	including	the	unfavorable	effects	from	purchase	accounting	related	to	the	RL	Media	Minority	Interest	Acquisition.	Excluding	the	effects	of the	acquisition,	Retail	operating	income	decreased	by	$9.0	million	primarily	as	a	result	of	increased	markdown	activity,	a	non-cash

impairment	charge	of	$5.0	million,	and	an	increase	in	occupancy	and	other	operating	costs	principally	related	to	worldwide	store	expansion,	as	we	continue	to	develop	and	invest	in	our	existing	retail concepts	and	formats.	The	decrease	also	reflected	an	increase	in	selling-related	salaries	and	associated	costs,	as	well	as	increased	fulfillment	costs	associated	with	higher	sales	at	RalphLauren.com.

Licensing	operating	income	decreased	by	$44.9	million,	including	the	unfavorable	effects	from	the	Japanese	Business	and	Small	Leathergoods	Business	Acquisitions.	Excluding	the	effects	of these	acquisitions,	Licensing	operating	income	increased	by	$12.5	million	primarily	due	to	an	increase	in	eyewear-related	royalties.	This	increase	was	partially	offset	by	the	absence	of	approximately $8	million	of	minimum	royalty	and	design-service	fees	received	in	connection	with	the	termination	of	a	licensing	arrangement	in	the	prior	fiscal	year.

Unallocated	corporate	expenses	increased	by	$33.6	million,	primarily	as	a	result	of	increases	in	brand-related	marketing	costs,	including	costs	associated	with	various	events	related	to	the Company's	40th	anniversary,	and	compensation-related	and	facilities	costs	to	support	the	ongoing	growth	of	our	businesses.	The	increase	in	compensation-related	costs	includes	higher	stock-based compensation	expense	and	severance-related	costs,	as	previously	discussed	under	SG&A	expenses.

Unallocated	legal	and	restructuring	charges	were	comprised	of	a	reversal	of	an	excess	reserve	in	the	amount	of	$4.1	million	in	Fiscal	2008	related	to	the	Credit	Card	Matter	(as	discussed	in Note	16	to	the	accompanying	audited	consolidated	financial	statements).	Unallocated	legal	and	restructuring	charges	were	$7.6	million	in	Fiscal	2007	and	were	principally	associated	with	the	Club Monaco	Restructuring	Plan	charges	of	$4.0	million	(as	defined	in	Note	12	to	the	accompanying	audited	consolidated	financial	statements)	and	costs	of	$3.0	million	related	to	the	Credit	Card	Matter.

Foreign	Currency	Gains	(Losses).		The	effect	of	foreign	currency	exchange	rate	fluctuations	resulted	in	a	loss	of	$6.4	million	in	Fiscal	2008,	compared	to	a	loss	of	$1.5	million	in	Fiscal	2007. Foreign	currency	losses	increased	compared	to	the	prior	fiscal	year	primarily	due	to	a	$2.0	million	write-off	of	foreign	currency	option	contracts,	entered	into	to	manage	certain	foreign	currency exposures	associated	with	the	Japanese	Business	Acquisitions,	most	of	which	expired	unexercised	as	of	March	29,	2008,	hedge	activity	associated	with	the	return	of	capital	from	a	foreign	subsidiary	and intercompany	royalty	activity,	as	well	as	the	timing	of	the	settlement	of	third	party	and	intercompany	receivables	and	payables	(that	were	not	of	a	long-term	investment	nature).	Foreign	currency	gains and	losses	are	unrelated	to	the	impact	of	changes	in	the	value	of	the	U.S.	dollar	when	operating	results	of	our	foreign	subsidiaries	are	translated	to	U.S.	dollars.

Interest	Expense.		Interest	expense	includes	the	borrowing	costs	of	our	outstanding	debt,	including	amortization	of	debt	issuance	costs,	and	interest	related	to	our	capital	lease	obligations.	Interest expense	increased	by	$4.1	million	to	$25.7	million	in	Fiscal	2008	from	$21.6	million	in	Fiscal	2007.	The	increase	is	primarily	due	to	additional	borrowings	undertaken	during	the	first	quarter	of	Fiscal 2008	in	connection	with	the	Japanese	Business	Acquisitions	(see	"Financial	Condition	and	Liquidity	—	Debt	and	Covenant	Compliance"	for	further	discussion),	as	well	as	the	higher	principal	amount	of our	outstanding	Euro	denominated	debt.	This	increase	was	partially	offset	by	the	absence	of	overlapping	interest	on	debt	during	the	period	between	the	issuance	of	approximately	€300	million	principal amount	of	4.5%	notes	due	October	4,	2013	(the	"Euro	Debt")	and	the	repayment	of	approximate	€227	million	principal	amount	of	6.125%	notes	outstanding	that	were	due	on	November	22,	2006,	from an	original	issuance	of	€275	million	in	1999	(the	"1999	Euro	Debt"),	in	the	prior	fiscal	year.

Interest	and	Other	Income,	net.		Interest	and	other	income,	net,	decreased	by	$1.4	million,	to	$24.7	million	in	Fiscal	2008	from	$26.1	million	in	Fiscal	2007.	This	decrease	was	principally	driven by	lower	average	interest	rates,	lower	balances	on	our	invested	excess	cash	and	higher	transaction-related	costs.

Equity	in	Income	(Loss)	of	Equity-Method	Investees.		The	equity	in	loss	of	equity-method	investees	of	$1.8	million	in	Fiscal	2008	related	to	certain	start-up	costs	associated	with	the	recently formed	joint	venture,	RL	Watch	Company,	which	the	Company	accounts	for	under	the	equity	method	of	accounting.	The	equity	in	income	of	equity-method	investees	of	$3.0	million	in	Fiscal	2007 related	to	Impact	21,	which	was	previously	accounted	for	as	an	equity-method	investment.	The	results	of	operations	for	Impact	21	have	been	consolidated	in	the	Company's	results	of	operations commencing	April	1,	2007.	Accordingly,	no	equity	income	related	to	Impact	21	was	recorded	in	Fiscal	2008.	See	Note	5	to	the	accompanying	audited	consolidated	financial	statements	for	further discussion	of	the	Company's	Impact	21	Acquisition.

Minority	Interest	Expense.		Minority	interest	expense	decreased	by	$13.2	million,	to	$2.1	million	in	Fiscal	2008	from	$15.3	million	in	Fiscal	2007.	The	decrease	is	related	to	the	Company's acquisition	of	the	remaining	50%	interests	in	RL	Media	and	PRL	Japan.	This	decrease	was	partially	offset	by	an	increase	related	to	the	allocation	of	Impact	21's	net	income	to	the	holders	of	the approximate	80%	interest	not	owned	by	the	Company	prior	to	the	closing	date	of	the	related	tender	offer	and	to	the	holders	of	the	remaining	approximate	3%	interest	not	owned	by	the	Company	as	of	the end	of	Fiscal	2008.	See	Note	5	to	the	accompanying	audited	consolidated	financial	statements	for	further	discussion	of	the	Company's	acquisitions.

Provision	for	Income	Taxes.		The	provision	for	income	taxes	represents	federal,	foreign,	state	and	local	income	taxes.	The	provision	for	income	taxes	decreased	by	$20.1	million,	or	8.3%,	to $222.3	million	in	Fiscal	2008	from	$242.4	million	in	Fiscal	2007.	This	decrease	was	primarily	due	to	a	decrease	in	our	reported	effective	tax	rate	of	310	basis	points,	to	34.6%	in	Fiscal	2008	from	37.7% in	Fiscal	2007,	and	a	decrease	in	pretax	income	in	Fiscal	2008	compared	to	Fiscal	2007.	The	lower	effective	tax	rate	is	primarily	due	to	tax	reserve	reductions	associated	with	an	audit	settlement	and	the expiration	of	a	statute	of	limitations,	lower	state	income	taxes	as	well	as	a	change	in	the	geographic	mix	of	earnings,	partially	offset	by	certain	higher,	non-deductible	expenses	under	§	162(m)	of	the Internal	Revenue	Code.	The	effective	tax	rate	differs	from	statutory	rates	due	to	the	effect	of	state	and	local	taxes,	tax	rates	in	foreign	jurisdictions	and	certain	nondeductible	expenses.	Our	effective	tax rate	will	change	from	year	to	year	based	on	non-recurring	factors	including,	but	not	limited	to,	the	geographic	mix	of	earnings,	the	timing	and	amount	of	foreign	dividends,	enacted	tax	legislation,	state and	local	taxes,	tax	audit	findings	and	settlements,	and	the	interaction	of	various	global	tax	strategies.	See	Note	13	to	the	accompanying	audited	consolidated	financial	statements	for	a	discussion	of	the Company's	adoption	of	FIN	48	as	of	the	beginning	of	Fiscal	2008.

Net	Income.		Net	income	increased	by	$18.9	million,	or	4.7%,	to	$419.8	million	in	Fiscal	2008	from	$400.9	million	in	Fiscal	2007.	The	increase	in	net	income	principally	related	to	the $20.1	million	decrease	in	provision	for	income	taxes	discussed	above	and	the	$0.8	million	increase	in	operating	income.	The	increase	was	partially	offset	by	reductions	in	operating	income	primarily related	to	the	dilutive	effect	of	purchase	accounting,	an	increase	in	domestic	promotional	activity	and	higher	SG&A	expenses	principally	associated	with	our	recent	acquisitions.	The	net	dilutive	effect related	to	the	Company's	recent	acquisitions	included	approximately	$53	million	of	non-cash	amortization	of	intangible	assets	and	inventory.	See	Note	5	to	the	accompanying	audited	consolidated financial	statements	for	further	discussion	of	the	Company's	acquisitions.

Net	Income	Per	Diluted	Share.		Net	income	per	diluted	share	increased	by	$0.26,	or	7.0%,	to	$3.99	per	share	in	Fiscal	2008	from	$3.73	per	share	in	Fiscal	2007.	The	increase	in	diluted	per	share results	was	primarily	due	to	the	higher	level	of	net	income	and	lower	weighted-average	diluted	shares	outstanding	for	Fiscal	2008	compared	to	the	prior	fiscal	year.

| Cash	and	cash	equivalents | $481.2 | $551.5 | $(70.3) |
| :--- | :--- | :--- | :--- |
| Short-term\tinvestments | 338.7 | 74.3 | 264.4 |
| Current\tmaturities\tof\tdebt | — | (206.4) | 206.4 |
| Long-term\tdebt | (406.4) | (472.8) | 66.4 |
| Net\tcash\tand\tshort-term\tinvestments\t(net\tdebt)(a) | $413.5 | $(53.4) | $466.9 |
| Stockholders'\tequity | $2,735.1 | $2,389.7 | $345.4 |

(a) "Net	cash	and	short-term	investments"	is	defined	as	total	cash	and	cash	equivalents,	plus	short-term	investments	less	total	debt.	"Net	debt"	is	defined	as	total	debt	less	total	cash	and	cash	equivalents and	short-term	investments.

The	increase	to	the	Company's	net	cash	and	short-term	investments	position	as	of	March	28,	2009	as	compared	to	a	net	debt	position	as	of	March	29,	2008	was	primarily	due	to	growth	in operating	cash	flows,	partially	offset	by	the	Company's	use	of	cash	to	support	its	treasury	stock	repurchases,	capital	expenditures	and	acquisition	spending.	In	Fiscal	2009,	the	Company	used $169.8	million	to	repurchase	2.5	million	shares	of	Class	A	common	stock	and	spent	$185.0	million	for	capital	expenditures.	The	Company	also	used	approximately	$26.0	million	to	fund	its	recent Japanese	Childrenswear	and	Golf	Acquisition.	In	addition,	the	Company	repaid	its	current	maturities	of	debt	using	available	cash	on-hand	in	May	2008.

The	increase	in	the	Company's	short-term	investments	was	primarily	due	to	the	investment	of	excess	cash	in	time	deposits	with	maturities	greater	than	90	days.

The	increase	in	stockholders'	equity	was	primarily	due	to	the	Company's	net	income	in	Fiscal	2009,	offset	in	part	by	an	increase	in	treasury	stock	as	a	result	of	the	Company's	common	stock repurchase	program.

# Cash	Flows

|  | March	28, | March	29, |  |
| :--- | :--- | :--- | :--- |
|  | 2009 | 2008 | $\tChange |
|  |  | (millions) |  |
| Net\tcash\tprovided\tby\toperating\tactivities | $774.2 | $695.4 | $78.8 |
| Net\tcash\tused\tin\tinvesting\tactivities | (458.0) | (505.0) | 47.0 |
| Net\tcash\tused\tin\tfinancing\tactivities | (352.1) | (260.5) | (91.6) |
| Effect\tof\texchange\trate\tchanges\ton\tcash\tand\tcash\tequivalents | (34.4) | 57.7 | (92.1) |
| Net\tincrease\t(decrease)\tin\tcash\tand\tcash\tequivalents | $(70.3) | $(12.4) | $(57.9) |

Net	Cash	Provided	by	Operating	Activities.		Net	cash	provided	by	operating	activities	increased	to	$774.2	million	in	Fiscal	2009,	compared	to	$695.4	million	in	Fiscal	2008.	This	net	increase	in operating	cash	flow	was	primarily	driven	by:

•	an	increase	in	net	income	before	depreciation,	amortization,	non-cash	asset	impairment	charges,	stock-based	compensation	and	other	non-cash	expenses;	and •	an	approximate	$84	million	decrease	in	cash	tax	payments.

•	an	increase	in	inventory	primarily	due	to	the	Japanese	Childrenswear	and	Golf	Acquisition,	offset	in	part	by	the	effects	of	ongoing	inventory	management	across	most	businesses.

Other	than	the	items	described	above,	the	changes	in	operating	assets	and	liabilities	were	attributable	to	normal	operating	fluctuations.

Net	Cash	Used	in	Investing	Activities.		Net	cash	used	in	investing	activities	was	$458.0	million	in	Fiscal	2009,	as	compared	to	$505.0	million	in	Fiscal	2008.	The	net	decrease	in	cash	used	in investing	activities	was	primarily	driven	by:

•	a	decrease	in	net	cash	used	to	fund	the	Company's	acquisitions.	In	Fiscal	2009,	the	Company	used	$46.3	million	primarily	to	fund	the	Japanese	Childrenswear	and	Golf	Acquisition	and	to complete	the	minority	squeeze-out	related	to	the	Japanese	Business	Acquisitions.	On	a	comparative	basis,	in	Fiscal	2008,	the	Company	used	$188.7	million	principally	to	fund	the	Japanese Business	Acquisitions,	net	of	cash	acquired,	and	the	Small	Leathergoods	Business	Acquisition;

•	a	decrease	in	cash	used	in	connection	with	capital	expenditures.	In	Fiscal	2009,	the	Company	spent	$185.0	million	for	capital	expenditures,	as	compared	to	$217.1	million	in	Fiscal	2008.	The Company's	capital	expenditures	were	primarily	associated	with	global	retail	store	expansion,	construction	and

renovation	of	department	store	shop-within-shops	and	investments	in	its	facilities	and	technological	infrastructure;	and

•	a	change	in	restricted	cash	deposits.	In	Fiscal	2009,	net	restricted	cash	of	$26.9	million	was	released	primarily	in	connection	with	the	partial	settlement	of	certain	international	tax	matters.	On a	comparative	basis,	Fiscal	2008	included	net	restricted	cash	deposits	of	$15.1	million.

# The	above	decreases	were	partially	offset	by:

•	an	increase	in	cash	used	to	purchase	investments,	less	proceeds	from	sales	and	maturities	of	investments.	In	Fiscal	2009,	the	Company	used	$623.1	million	to	purchase	investments,	less $369.5	million	of	proceeds	from	sales	and	maturities	of	investments.	On	a	comparative	basis,	in	Fiscal	2008,	$96.8	million	was	used	to	purchase	investments,	less	$12.7	million	of	proceeds from	sales	and	maturities	of	investments.

Net	Cash	Used	in	Financing	Activities.		Net	cash	used	in	financing	activities	was	$352.1	million	in	Fiscal	2009,	as	compared	to	$260.5	million	in	Fiscal	2008.	The	increase	in	net	cash	used	in financing	activities	was	primarily	driven	by:

•	the	repayment	of	¥20.5	billion	($196.8	million	as	of	the	repayment	date)	of	borrowings	under	a	one-year	term	loan	agreement	pursuant	to	an	amendment	and	restatement	to	the	Company's existing	credit	facility	(the	"Term	Loan")	in	Fiscal	2009	related	to	the	Japanese	Business	Acquisitions.	On	a	comparative	basis,	Fiscal	2008	included	the	receipt	of	proceeds	from	the	Term Loan	of	$168.9	million	as	of	the	borrowing	date;	and

•	a	decrease	in	excess	tax	benefits	from	stock-based	compensation	arrangements	of	$22.3	million	in	Fiscal	2009	as	compared	to	the	prior	fiscal	year.

•	a	decrease	in	repurchases	of	the	Company's	Class	A	common	stock	pursuant	to	the	Company's	common	stock	repurchase	program.	Approximately	2.5	million	shares	of	Class	A	common stock	at	a	cost	of	$169.8	million	(including	approximately	0.4	million	shares	at	a	cost	of	$24.0	million	that	was	traded	prior	to	the	end	of	Fiscal	2008	for	which	settlement	occurred	in	April 2008)	were	repurchased	in	Fiscal	2009,	as	compared	to	approximately	6.0	million	shares	of	Class	A	common	stock	at	a	cost	of	$475.4	million	in	Fiscal	2008.

|  | March	29, | March	31, |  |
| :--- | :--- | :--- | :--- |
|  | 2008 | 2007 | $\tChange |
|  |  | (millions) |  |
| Net\tcash\tprovided\tby\toperating\tactivities | $695.4 | $796.1 | $(100.7) |
| Net\tcash\tused\tin\tinvesting\tactivities | (505.0) | (434.6) | (70.4) |
| Net\tcash\tused\tin\tfinancing\tactivities | (260.5) | (95.2) | (165.3) |
| Effect\tof\texchange\trate\tchanges\ton\tcash\tand\tcash\tequivalents | 57.7 | 11.9 | 45.8 |
| Net\tincrease\t(decrease)\tin\tcash\tand\tcash\tequivalents | $(12.4) | $278.2 | $(290.6) |

Net	Cash	Provided	by	Operating	Activities.		Net	cash	provided	by	operating	activities	decreased	to	$695.4	million	in	Fiscal	2008,	compared	to	$796.1	million	in	Fiscal	2007.	This	$100.7	million net	decrease	in	operating	cash	flow	was	primarily	driven	by:

•	the	absence	of	the	approximately	$180	million,	net	of	certain	tax	withholdings,	received	under	an	eyewear	licensing	agreement	in	the	prior	fiscal	year;	and

•	an	increase	in	other	receivables	primarily	attributable	to	the	timing	of	estimated	tax	payments.

•	an	increase	in	net	income	before	non-cash	depreciation,	amortization	and	stock-based	compensation	expenses;

•	improved	accounts	receivable	cash	collections	in	the	Company's	Wholesale	segment;	and

•	the	effects	of	ongoing	inventory	management,	which	resulted	in	lower	average	balance	and	increased	inventory	turns	across	certain	businesses.

Net	Cash	Used	in	Investing	Activities.		Net	cash	used	in	investing	activities	was	$505.0	million	in	Fiscal	2008,	as	compared	to	$434.6	million	in	Fiscal	2007.	The	net	increase	in	cash	used	in investing	activities	was	primarily	driven	by:

•	an	increase	in	net	cash	used	to	fund	the	Company's	acquisitions.	In	Fiscal	2008,	the	Company	used	$188.7	million	principally	to	fund	the	Japanese	Business	Acquisitions,	net	of	cash acquired,	and	the	Small	Leathergoods	Business	Acquisition;	whereas	in	Fiscal	2007,	$176.1	million	was	used	primarily	to	fund	the	RL	Media	Minority	Interest	Acquisition;

•	an	increase	in	cash	used	in	connection	with	capital	expenditures.	In	Fiscal	2008,	the	Company	spent	$217.1	million	for	capital	expenditures,	as	compared	to	$184.0	million	in	Fiscal	2007.	The increase	in	capital	expenditures	is	primarily	associated	with	global	retail	store	expansion,	construction	and	renovation	of	department	store	shop-within-shops	and	investments	in	our	facilities and	technological	infrastructure,	including	showrooms	related	to	our	new	businesses;

•	an	increase	related	to	purchases	of	investments	of	$96.8	million,	less	proceeds	from	sales	and	maturities	of	investments	of	$12.7	million,	in	Fiscal	2008;	and

•	a	partially	offsetting	decrease	in	restricted	cash	deposits.	During	Fiscal	2008,	$15.1	million	of	cash	was	restricted	as	compared	to	$74.5	million	during	Fiscal	2007.	Restricted	cash	was	placed in	escrow	with	certain	banks	as	collateral	to	secure	guarantees	of	a	corresponding	amount	made	by	the	banks	to	certain	international	tax	authorities	on	behalf	of	the	Company.

Net	Cash	Used	in	Financing	Activities.		Net	cash	used	in	financing	activities	was	$260.5	million	in	Fiscal	2008,	as	compared	to	$95.2	million	in	Fiscal	2007.	The	increase	in	net	cash	used	in financing	activities	was	primarily	driven	by:

•	increased	repurchases	of	the	Company's	Class	A	common	stock	pursuant	to	the	Company's	common	stock	repurchase	program.	Approximately	6.0	million	shares	of	Class	A	common	stock at	a	cost	of	$475.4	million	were	repurchased	in	Fiscal	2008,	as	compared	to	approximately	3.5	million	shares	of	Class	A	common	stock	at	a	cost	of	$231.3	million	in	Fiscal	2007;	and •	a	partially	offsetting	increase	in	proceeds	from	issuance	of	debt.	Fiscal	2008	included	the	receipt	of	proceeds	from	borrowings	of	¥20.5	billion	($168.9	million	as	of	the	borrowing	date)	under a	one-year	term	loan	agreement	in	connection	with	the	Japanese	Business	Acquisitions.	On	a	comparative	basis,	Fiscal	2007	included	the	receipt	of	proceeds	from	the	issuance	of	€300	million principal	amount	($380.0	million)	of	Euro	Debt,	offset	in	part	by	the	repayment	of	approximately	€227	million	principal	amount	($291.6	million)	of	1999	Euro	Debt.

# Liquidity

The	Company's	primary	sources	of	liquidity	are	the	cash	flow	generated	from	its	operations,	$450	million	of	availability	under	its	credit	facility,	available	cash	and	cash	equivalents,	investments and	other	available	financing	options.	These	sources	of	liquidity	are	needed	to	fund	the	Company's	ongoing	cash	requirements,	including	working	capital	requirements,	global	retail	store	expansion, construction	and	renovation	of	shop-within-shops,	investment	in	technological	infrastructure,	acquisitions,	joint	ventures,	dividends,	debt	repayment,	stock

repurchases,	contingent	liabilities	(including	uncertain	tax	positions)	and	other	corporate	activities.	Notwithstanding	the	current	global	economic	crisis,	management	believes	that	the	Company's	existing sources	of	cash	will	be	sufficient	to	support	its	operating,	capital	and	debt	service	requirements	for	the	foreseeable	future,	including	the	finalization	of	acquisitions	and	plans	for	business	expansion.

As	discussed	below	under	the	section	entitled	"Debt	and	Covenant	Compliance,"	the	Company	had	no	revolving	credit	borrowings	outstanding	under	its	credit	facility	as	of	March	28,	2009. However,	as	discussed	further	below,	the	Company	may	elect	to	draw	on	its	credit	facility	or	other	potential	sources	of	financing	for,	among	other	things,	a	material	acquisition,	settlement	of	a	material contingency	(including	uncertain	tax	positions)	or	a	material	adverse	business	development,	as	well	as	for	other	general	corporate	business	purposes.	In	recognition	of	the	current	global	economic	crisis, the	Company	believes	its	credit	facility	is	adequately	diversified	with	no	undue	concentrations	in	any	one	financial	institution.	In	particular,	as	of	March	28,	2009,	there	were	13	financial	institutions participating	in	the	credit	facility,	with	no	one	participant	maintaining	a	maximum	commitment	percentage	in	excess	of	approximately	20%.	Although	there	can	be	no	assurances,	management	believes that	the	participating	institutions	will	be	able	to	fulfill	their	obligations	to	provide	financing	in	accordance	with	the	terms	of	the	credit	facility	in	the	event	of	the	Company's	election	to	draw	funds	in	the foreseeable	future.

In	May	2007,	the	Company	completed	the	Japanese	Business	Acquisitions.	These	transactions	were	funded	with	available	cash	on-hand	and	the	¥20.5	billion	Term	Loan.	The	Company	repaid	the borrowing	by	its	maturity	date	on	May	22,	2008	using	$196.8	million	of	Impact	21's	cash	on-hand	acquired	as	part	of	the	acquisition.

# Common	Stock	Repurchase	Program

In	May	2008,	the	Company's	Board	of	Directors	approved	an	expansion	of	the	Company's	existing	common	stock	repurchase	program	that	allows	the	Company	to	repurchase	up	to	an	additional $250	million	of	Class	A	common	stock.	Repurchases	of	shares	of	Class	A	common	stock	are	subject	to	overall	business	and	market	conditions.	In	Fiscal	2009,	1.8	million	shares	of	Class	A	common stock	were	repurchased	by	the	Company	at	a	cost	of	$126.2	million	under	its	repurchase	program.	Also,	during	the	first	quarter	of	Fiscal	2009,	0.4	million	shares	traded	prior	to	the	end	of	Fiscal	2008 were	settled	at	a	cost	of	$24.0	million.	The	remaining	availability	under	the	common	stock	repurchase	program	was	approximately	$266	million	as	of	March	28,	2009.

In	addition,	in	Fiscal	2009,	0.3	million	shares	of	Class	A	common	stock	at	a	cost	of	$19.6	million	were	surrendered	to,	or	withheld	by,	the	Company	in	satisfaction	of	withholding	taxes	in connection	with	the	vesting	of	awards	under	the	Company's	1997	Long-Term	Stock	Incentive	Plan,	as	amended	and	restated.

In	Fiscal	2008,	share	repurchases	amounted	to	6.1	million	shares	of	Class	A	common	stock	at	a	cost	of	$476.4	million,	including	$24.0	million	(0.4	million	shares)	that	was	traded	prior	to	the	end of	the	fiscal	year	for	which	settlement	occurred	in	April	2008.	In	addition,	in	Fiscal	2008,	0.3	million	shares	of	Class	A	common	stock	at	a	cost	of	$23.0	million	were	surrendered	to,	or	withheld	by,	the Company	in	satisfaction	of	withholding	taxes	in	connection	with	the	vesting	of	awards	under	the	Company's	1997	Long-Term	Stock	Incentive	Plan,	as	amended	and	restated.

In	Fiscal	2007,	the	Company	repurchased	3.5	million	shares	of	Class	A	common	stock	at	a	cost	of	$231.3	million.

# Dividends

The	Company	declared	a	quarterly	dividend	of	$0.05	per	outstanding	share	in	each	quarter	of	Fiscal	2009,	Fiscal	2008	and	Fiscal	2007.	The	aggregate	amount	of	dividend	payments	was $19.9	million	in	Fiscal	2009,	$20.5	million	in	Fiscal	2008	and	$20.9	million	in	Fiscal	2007.

The	Company	intends	to	continue	to	pay	regular	quarterly	dividends	on	its	outstanding	common	stock.	However,	any	decision	to	declare	and	pay	dividends	in	the	future	will	be	made	at	the discretion	of	the	Company's	Board	of	Directors	and	will	depend	on,	among	other	things,	the	Company's	results	of	operations,	cash	requirements,	financial	condition	and	other	factors	that	the	Board	of Directors	may	deem	relevant.

# Debt	and	Covenant	Compliance

# Euro	Debt

The	Company	has	outstanding	approximately	€300	million	principal	amount	of	4.5%	notes	due	October	4,	2013.	The	Company	has	the	option	to	redeem	all	of	the	Euro	Debt	at	any	time	at	a redemption	price	equal	to	the	principal	amount	plus	a	premium.	The	Company	also	has	the	option	to	redeem	all	of	the	Euro	Debt	at	any	time	at	par	plus	accrued	interest	in	the	event	of	certain developments	involving	U.S.	tax	law.	Partial	redemption	of	the	Euro	Debt	is	not	permitted	in	either	instance.	In	the	event	of	a	change	of	control	of	the	Company,	each	holder	of	the	Euro	Debt	has	the option	to	require	the	Company	to	redeem	the	Euro	Debt	at	its	principal	amount	plus	accrued	interest.	The	indenture	governing	the	Euro	Debt	(the	"Indenture")	contains	certain	limited	covenants	that restrict	the	Company's	ability,	subject	to	specified	exceptions,	to	incur	liens	or	enter	into	a	sale	and	leaseback	transaction	for	any	principal	property.	The	Indenture	does	not	contain	any	financial covenants.

As	of	March	28,	2009,	the	carrying	value	of	the	Euro	Debt	was	$406.4	million,	compared	to	$472.8	million	as	of	March	29,	2008.	The	Company	may	from	time	to	time	repurchase	all	or	a	portion of	its	Euro	Debt	in	the	open	market,	via	tender	offer	or	otherwise.

# Revolving	Credit	Facility	and	Term	Loan

The	Company	has	a	credit	facility	that	provides	for	a	$450	million	unsecured	revolving	line	of	credit	through	November	2011	(the	"Credit	Facility").	The	Credit	Facility	also	is	used	to	support	the issuance	of	letters	of	credit.	As	of	March	28,	2009,	there	were	no	borrowings	outstanding	under	the	Credit	Facility,	and	the	Company	was	contingently	liable	for	$13.7	million	of	outstanding	letters	of credit	(primarily	relating	to	inventory	purchase	commitments).	The	Company	has	the	ability	to	expand	its	borrowing	availability	to	$600	million	subject	to	the	agreement	of	one	or	more	new	or	existing lenders	under	the	facility	to	increase	their	commitments.	There	are	no	mandatory	reductions	in	borrowing	ability	throughout	the	term	of	the	Credit	Facility.

Borrowings	under	the	Credit	Facility	bear	interest,	at	the	Company's	option,	either	at	(a)	a	base	rate	determined	by	reference	to	the	higher	of	(i)	the	prime	commercial	lending	rate	of	JP	Morgan Chase	Bank,	N.A.	in	effect	from	time	to	time	and	(ii)	the	weighted-average	overnight	Federal	funds	rate	(as	published	by	the	Federal	Reserve	Bank	of	New	York)	plus	50	basis	points	or	(b)	a	LIBOR	rate in	effect	from	time	to	time,	as	adjusted	for	the	Federal	Reserve	Board's	Euro	currency	liabilities	maximum	reserve	percentage	plus	a	margin	defined	in	the	Credit	Facility	("the	applicable	margin").	The applicable	margin	of	35	basis	points	is	subject	to	adjustment	based	on	the	Company's	credit	ratings.

In	addition	to	paying	interest	on	any	outstanding	borrowings	under	the	Credit	Facility,	the	Company	is	required	to	pay	a	commitment	fee	to	the	lenders	under	the	Credit	Facility	in	respect	of	the unutilized	commitments.	The	commitment	fee	rate	of	8	basis	points	under	the	terms	of	the	Credit	Facility	also	is	subject	to	adjustment	based	on	the	Company's	credit	ratings.

The	Credit	Facility	contains	a	number	of	covenants	that,	among	other	things,	restrict	the	Company's	ability,	subject	to	specified	exceptions,	to	incur	additional	debt;	incur	liens	and	contingent liabilities;	sell	or	dispose	of	assets,	including	equity	interests;	merge	with	or	acquire	other	companies;	liquidate	or	dissolve	itself;	engage	in	businesses	that	are	not	in	a	related	line	of	business;	make	loans, advances	or	guarantees;	engage	in	transactions	with	affiliates;	and	make	investments.	The	Credit	Facility	also	requires	the	Company	to	maintain	a	maximum	ratio	of	Adjusted	Debt	to	Consolidated EBITDAR	(the	"leverage	ratio")	of	no	greater	than	3.75	as	of	the	date	of	measurement	for	four	consecutive	quarters.	Adjusted	Debt	is	defined	generally	as	consolidated	debt	outstanding	plus	8	times consolidated	rent	expense	for	the	last	twelve	months.	EBITDAR	is	defined	generally	as	consolidated	net	income	plus	(i)	income	tax	expense,	(ii)	net	interest	expense,	(iii)	depreciation	and	amortization expense	and	(iv)	consolidated	rent	expense.	As	of	March	28,	2009,	no	Event	of	Default	(as	such	term	is	defined	pursuant	to	the	Credit	Facility)	has	occurred	under	the	Company's	Credit	Facility.

Upon	the	occurrence	of	an	Event	of	Default	under	the	Credit	Facility,	the	lenders	may	cease	making	loans,	terminate	the	Credit	Facility,	and	declare	all	amounts	outstanding	to	be	immediately due	and	payable.	The	Credit	Facility	specifies	a	number	of	events	of	default	(many	of	which	are	subject	to	applicable	grace	periods),	including,	among	others,	the	failure	to	make	timely	principal	and interest	payments	or	to	satisfy	the	covenants,	including	the

financial	covenant	described	above.	Additionally,	the	Credit	Facility	provides	that	an	Event	of	Default	will	occur	if	Mr.	Ralph	Lauren,	the	Company's	Chairman	and	Chief	Executive	Officer,	and	related entities	controlled	by	Mr.	Lauren	fail	to	maintain	a	specified	minimum	percentage	of	the	voting	power	of	the	Company's	common	stock.

The	Credit	Facility	was	amended	and	restated	as	of	May	22,	2007	to	provide	for	the	addition	of	the	¥20.5	billion	Term	Loan.	This	loan	was	made	to	Polo	JP	Acqui	B.V.,	a	wholly	owned subsidiary	of	the	Company,	and	was	guaranteed	by	the	Company,	as	well	as	the	other	subsidiaries	of	the	Company	which	currently	guarantee	the	Credit	Facility.	The	proceeds	of	the	Term	Loan	were	used to	finance	the	Japanese	Business	Acquisitions.	Borrowings	under	the	Term	Loan	bore	interest	at	a	fixed	rate	of	1.2%.	The	Company	repaid	the	borrowing	by	its	maturity	date	on	May	22,	2008	using $196.8	million	of	Impact	21's	cash	on-hand	acquired	as	part	of	the	acquisition.	See	"Recent	Developments"	for	further	discussion	of	the	Japanese	Business	Acquisitions.

# Contractual	and	Other	Obligations

# Firm	Commitments

The	following	table	summarizes	certain	of	the	Company's	aggregate	contractual	obligations	as	of	March	28,	2009,	and	the	estimated	timing	and	effect	that	such	obligations	are	expected	to	have on	the	Company's	liquidity	and	cash	flow	in	future	periods.	The	Company	expects	to	fund	the	firm	commitments	with	operating	cash	flow	generated	in	the	normal	course	of	business	and,	if	necessary, availability	under	its	$450	million	credit	facility	or	other	potential	sources	of	financing.

|  | Fiscal<br>2010 | Fiscal<br>2011-2012 | Fiscal<br>2013-2014 | 2015	and<br>Thereafter | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  | (millions) |  |  |
| Euro\tdebt | $—\t $— | $—\t $— | $406.4 | $— | $406.4 |
| Capital\tleases | 8.3 | 18.1 | 18.0 | 47.3 | 91.7 |
| Operating\tleases | 179.9 | 326.8 | 294.9 | 831.0 | 1,632.6 |
| Inventory\tpurchase\tcommitments | 579.3 | 0.2 | — | — | 579.5 |
| Total | $767.5 | $345.1 | $719.3 | $878.3 | $2,710.2 |

The	following	is	a	description	of	the	Company's	material,	firmly	committed	contractual	obligations	as	of	March	28,	2009:

•	Euro	debt	represents	the	principal	amount	due	at	maturity	of	the	Company's	outstanding	Euro	Debt	on	a	U.S.	dollar-equivalent	basis.	Amounts	do	not	include	any	fair	value	adjustments,	call premiums	or	interest	payments;

•	Lease	obligations	represent	the	minimum	lease	rental	payments	under	noncancelable	leases	for	the	Company's	real	estate	and	operating	equipment	in	various	locations	around	the	world. Approximately	60%	of	these	lease	obligations	relates	to	the	Company's	retail	operations.	Information	has	been	presented	separately	for	operating	and	capital	leases.	In	addition	to	such amounts,	the	Company	is	normally	required	to	pay	taxes,	insurance	and	occupancy	costs	relating	to	its	leased	real	estate	properties;	and

•	Inventory	purchase	commitments	represent	the	Company's	legally	binding	agreements	to	purchase	fixed	or	minimum	quantities	of	goods	at	determinable	prices.

Excluded	from	the	above	contractual	obligations	table	is	the	non-current	liability	for	unrecognized	tax	benefits	of	$154.8	million	recognized	pursuant	to	FIN	48.	This	liability	for	unrecognized	tax benefits	has	been	excluded	because	the	Company	cannot	make	a	reliable	estimate	of	the	period	in	which	the	liability	will	be	settled,	if	ever.

The	above	table	also	excludes	the	following:	(i)	amounts	included	in	current	liabilities	in	the	consolidated	balance	sheet	as	of	March	28,	2009	as	these	items	will	be	paid	within	one	year;	and (ii)	non-current	liabilities	that	have	no	cash	outflows	associated	with	them	(e.g.,	deferred	revenue)	or	the	cash	outflows	associated	with	them	are

uncertain	or	do	not	represent	a	"purchase	obligation"	as	the	term	is	used	herein	(e.g.,	deferred	taxes	and	other	miscellaneous	items).

The	Company	also	has	certain	contractual	arrangements	that	would	require	it	to	make	payments	if	certain	circumstances	occur.	See	Note	16	to	the	accompanying	audited	consolidated	financial statements	for	a	description	of	the	Company's	contingent	commitments	not	included	in	the	above	table.

# Off-Balance	Sheet	Arrangements

The	Company's	off-balance	sheet	firm	commitments,	which	include	outstanding	letters	of	credit	and	minimum	funding	commitments	to	investees,	amounted	to	$19.9	million	as	of	March	28, 2009.	In	addition,	as	discussed	in	"Recent	Developments,"	the	Company	has	entered	into	an	agreement	to	assume	direct	control	of	its	Polo-branded	licensed	apparel	business	in	Southeast	Asia	effective January	1,	2010	in	exchange	for	a	cash	payment	of	$20.0	million	and	certain	other	consideration.	The	Company	does	not	maintain	any	other	off-balance	sheet	arrangements,	transactions,	obligations	or other	relationships	with	unconsolidated	entities	that	would	be	expected	to	have	a	material	current	or	future	effect	on	its	financial	condition	or	results	of	operations.

# MARKET	RISK	MANAGEMENT

The	Company	is	exposed	to	a	variety	of	risks,	including	changes	in	foreign	currency	exchange	rates	relating	to	certain	anticipated	cash	flows	from	its	international	operations	and	possible declines	in	the	fair	value	of	reported	net	assets	of	certain	of	its	foreign	operations,	as	well	as	changes	in	the	fair	value	of	its	fixed-rate	debt	relating	to	changes	in	interest	rates.	Consequently,	in	the	normal course	of	business	the	Company	employs	established	policies	and	procedures,	including	the	use	of	derivative	financial	instruments,	to	manage	such	risks.	The	Company	does	not	enter	into	derivative transactions	for	speculative	or	trading	purposes.

As	a	result	of	the	use	of	derivative	instruments,	the	Company	is	exposed	to	the	risk	that	counterparties	to	derivative	contracts	will	fail	to	meet	their	contractual	obligations.	To	mitigate	the counterparty	credit	risk,	the	Company	has	a	policy	of	only	entering	into	contracts	with	carefully	selected	financial	institutions	based	upon	their	credit	ratings	and	other	financial	factors.	The	Company's established	policies	and	procedures	for	mitigating	credit	risk	on	derivative	transactions	include	reviewing	and	assessing	the	creditworthiness	of	counterparties.	As	a	result	of	the	above	considerations,	the Company	does	not	believe	it	is	exposed	to	any	undue	concentration	of	counterparty	risk	with	respect	to	its	derivative	contracts	as	of	March	28,	2009.	However,	the	Company	does	have	approximately 48%	of	its	derivative	instruments	in	asset	positions	placed	with	one	creditworthy	financial	institution.

# Foreign	Currency	Risk	Management

The	Company	manages	its	exposure	to	changes	in	foreign	currency	exchange	rates	through	the	use	of	foreign	currency	exchange	contracts.	Refer	to	Note	15	to	the	audited	consolidated	financial statements	for	a	summarization	of	the	notional	amounts	and	fair	values	of	the	Company's	foreign	currency	exchange	contracts	outstanding	as	of	March	28,	2009.

# Forward	Foreign	Currency	Exchange	Contracts

From	time	to	time,	the	Company	may	enter	into	forward	foreign	currency	exchange	contracts	as	hedges	to	reduce	its	risk	from	exchange	rate	fluctuations	on	inventory	purchases,	intercompany royalty	payments	made	by	certain	of	its	international	operations,	intercompany	contributions	made	to	fund	certain	marketing	efforts	of	its	international	operations,	interest	payments	made	in	connection with	outstanding	debt,	other	foreign	currency-denominated	operational	obligations	including	payroll,	rent,	insurance	and	benefit	payments,	and	foreign	currency-denominated	revenues.	As	part	of	our overall	strategy	to	manage	the	level	of	exposure	to	the	risk	of	foreign	currency	exchange	rate	fluctuations,	primarily	to	changes	in	the	value	of	the	Euro,	the	Japanese	Yen,	the	Swiss	Franc,	and	the	British Pound	Sterling,	the	Company	hedges	a	portion	of	its	foreign	currency	exposures	anticipated	over	the	ensuing	twelve-month	to	two-year	periods.	In	doing	so,	the	Company	uses	foreign	currency	exchange contracts	that	generally	have	maturities	of	three	months	to	two	years	to	provide	continuing	coverage	throughout	the	hedging	period.

The	Company's	foreign	exchange	risk	management	activities	are	governed	by	policies	and	procedures	approved	by	its	Audit	Committee	and	Board	of	Directors.	Our	policies	and	procedures provide	a	framework	that	allows	for	the	management	of	currency	exposures	while	ensuring	the	activities	are	conducted	within	established	Company	guidelines.	Our	policies	includes	guidelines	for	the organizational	structure	of	our	risk	management	function	and	for	internal	controls	over	foreign	exchange	risk	management	activities,	including	but	not	limited	to	authorization	levels,	transactional	limits, and	credit	quality	controls,	as	well	as	various	measurements	for	monitoring	compliance.	We	monitor	foreign	exchange	risk	using	different	techniques	including	a	periodic	review	of	market	value	and sensitivity	analyses.

The	Company	records	its	foreign	currency	exchange	contracts	at	fair	value	in	its	consolidated	balance	sheets.	Foreign	currency	exchange	contracts	designated	as	cash	flow	hedges	at	hedge inception	are	accounted	for	in	accordance	with	FAS	No.	133,	"Accounting	for	Derivative	Instruments	and	Hedging	Activities,"	and	subsequent	amendments	(collectively,	"FAS	133").	As	such,	to	the extent	these	hedges	are	effective,	the	related	gains	(losses)	are	deferred	in	stockholders'	equity	as	a	component	of	accumulated	other	comprehensive	income.	These	deferred	gains	(losses)	are	then recognized	in	our	consolidated	statements	of	operations	as	follows:

•	Forecasted	Inventory	Purchases	—	Recognized	as	part	of	the	cost	of	the	inventory	being	hedged	within	cost	of	goods	sold	when	the	related	inventory	is	sold.

•	Intercompany	Royalty	Payments	and	Marketing	Contributions	—	Recognized	within	foreign	currency	gains	(losses)	in	the	period	in	which	the	related	royalties	or	marketing	contributions being	hedged	are	received	or	paid.

•	Operational	Obligations	—	Recognized	primarily	within	SG&A	expenses	in	the	period	in	which	the	hedged	forecasted	transaction	affects	earnings.

•	Interest	Payments	on	Euro	Debt	—	Recognized	within	foreign	currency	gains	(losses)	in	the	period	in	which	the	recorded	liability	impacts	earnings	due	to	foreign	currency	exchange remeasurement.

The	Company	recognized	net	losses	on	foreign	currency	exchange	contracts	in	earnings	of	approximately	$6	million	for	Fiscal	2009	and	$8	million	for	Fiscal	2008,	and	a	net	gain	of approximately	$4	million	for	Fiscal	2007.

# Sensitivity

The	Company	performs	a	sensitivity	analysis	to	determine	the	effects	that	market	risk	exposures	may	have	on	the	fair	values	of	the	Company's	derivative	financial	instruments.	To	perform	the sensitivity	analysis,	the	Company	assesses	the	risk	of	loss	in	fair	values	from	the	effect	of	hypothetical	changes	in	foreign	currency	exchange	rates.	This	analysis	assumes	a	like	movement	by	all	foreign currencies	in	our	hedge	portfolio	against	the	U.S.	dollar.	Based	on	all	foreign	currency	exchange	contracts	outstanding	as	of	March	28,	2009,	a	10%	devaluation	of	the	U.S.	dollar	as	compared	to	the	level of	foreign	currency	exchange	rates	for	currencies	under	contract	as	of	March	28,	2009	would	result	in	approximately	$2	million	of	net	unrealized	losses.	Conversely,	a	10%	appreciation	of	the	U.S.	dollar would	result	in	approximately	$2	million	of	net	unrealized	gains.	As	the	Company's	outstanding	foreign	currency	exchange	contracts	are	primarily	designated	as	cash	flow	hedges	of	forecasted transactions,	the	unrealized	loss	or	gain	as	a	result	of	a	10%	devaluation	or	appreciation	would	be	largely	offset	by	changes	in	the	underlying	hedged	items.

# Hedge	of	a	Net	Investment	in	Certain	European	Subsidiaries

The	Company	designated	the	entire	principal	amount	of	its	outstanding	Euro	Debt	as	a	hedge	of	its	net	investment	in	certain	of	its	European	subsidiaries.	As	required	by	FAS	133,	the	changes	in fair	value	of	a	derivative	instrument	or	a	non-derivative	financial	instrument	(such	as	debt)	that	is	designated	as	a	hedge	of	a	net	investment	in	a	foreign	operation	are	reported	in	the	same	manner	as	a translation	adjustment	under	FAS	No.	52,	"Foreign	Currency	Translation,"	to	the	extent	it	is	effective	as	a	hedge.	As	such,	changes	in	the	fair	value	of	the	Euro	Debt	resulting	from	changes	in	the	Euro exchange	rate	have	been,	and	continue	to	be,	reported	in	stockholders'	equity	as	a	component	of	accumulated	other	comprehensive	income.	The	Company	recorded	within	other	comprehensive

income	the	translation	effects	of	the	Euro	Debt	to	U.S.	dollars,	resulting	in	a	gain	of	$66.6	million	for	Fiscal	2009,	and	losses	of	$73.8	million	for	Fiscal	2008	and	$30.8	million	for	Fiscal	2007.

# Interest	Rate	Risk	Management

During	the	first	six	months	of	Fiscal	2007,	the	Company	entered	into	three	forward-starting	interest	rate	swap	contracts	in	anticipation	of	the	Company's	proposed	refinancing	of	the	1999	Euro Debt,	which	was	completed	in	October	2006.	These	contracts	were	designated	as	cash	flow	hedges	of	a	forecasted	transaction	to	issue	new	debt	in	connection	with	the	planned	refinancing.	The	interest rate	swaps	hedged	a	total	of	€200.0	million,	a	portion	of	the	underlying	interest	rate	exposure	on	the	anticipated	refinancing.	Under	the	terms	of	the	swaps,	the	Company	paid	a	weighted-average	fixed rate	of	interest	of	4.1%	and	received	variable	interest	based	on	six-month	EURIBOR.	The	Company	terminated	the	swaps	on	September	28,	2006,	which	was	the	date	the	interest	rate	for	the	Euro	Debt was	determined.	As	a	result,	the	Company	made	a	payment	of	approximately	€3.5	million	($4.4	million)	in	settlement	of	the	swaps.	An	amount	of	$0.2	million	was	recognized	as	a	loss	in	Fiscal	2007	due to	the	partial	ineffectiveness	of	the	cash	flow	hedge	as	a	result	of	the	forecasted	transaction	closing	on	October	5,	2006	instead	of	November	22,	2006	(the	maturity	date	of	the	1999	Euro	Debt).	The remaining	loss	of	$4.2	million	was	deferred	as	a	component	of	comprehensive	income	within	stockholders'	equity	and	is	being	recognized	in	earnings	as	an	adjustment	to	interest	expense	over	the	seven- year	term	of	the	Euro	Debt.

No	other	interest	rate-related	agreements	have	been	entered	into	since	Fiscal	2007.

As	of	March	28,	2009,	the	Company	had	no	variable-rate	debt	outstanding.	As	such,	the	Company's	exposure	to	changes	in	interest	rates	primarily	related	to	its	fixed	rate	Euro	Debt.	As	of March	28,	2009,	the	carrying	value	of	the	Euro	Debt	was	$406.4	million	and	the	fair	value	was	$320.0	million.	A	25	basis	point	increase	or	decrease	in	the	level	of	interest	rates	would,	respectively, decrease	or	increase	the	fair	value	of	the	Euro	Debt	by	approximately	$3	million.	Such	potential	increases	or	decreases	are	based	on	certain	simplifying	assumptions,	including	no	changes	in	Euro currency	exchange	rates	and	an	immediate	across-the-board	increase	or	decrease	in	the	level	of	interest	rates	with	no	other	subsequent	changes	for	the	remainder	of	the	period.

The	Term	Loan	of	¥20.5	billion	made	to	Polo	JP	Acqui,	B.V.,	a	wholly	owned	subsidiary	of	the	Company,	was	repaid	by	the	Company	by	its	maturity	date	on	May	22,	2008	using	$196.8	million of	Impact	21's	cash	on-hand	acquired	as	part	of	the	Japanese	Business	Acquisitions.

# Investment	Risk	Management

As	of	March	28,	2009,	the	Company	had	cash	and	cash	equivalents	on-hand	of	$481.2	million,	primarily	invested	in	money	market	funds	and	time	deposits	with	maturities	of	less	than	90	days. The	Company's	other	significant	investments	included	$338.7	million	of	short-term	investments,	primarily	in	time	deposits	with	maturities	greater	than	90	days;	$71.7	million	of	restricted	cash	placed	in escrow	with	certain	banks	as	collateral	to	secure	guarantees	in	connection	with	certain	international	tax	matters;	$27.1	million	of	deposits	with	maturities	greater	than	one	year;	and	$2.3	million	of	auction rate	securities	issued	through	a	municipality.

The	Company	evaluates	investments	held	in	unrealized	loss	positions	for	other-than-temporary	impairment	on	a	quarterly	basis.	Such	evaluation	involves	a	variety	of	considerations,	including assessments	of	risks	and	uncertainties	associated	with	general	economic	conditions	and	distinct	conditions	affecting	specific	issuers.	Factors	considered	by	the	Company	include	(i)	the	length	of	time	and the	extent	to	which	the	fair	value	has	been	below	cost,	(ii)	the	financial	condition,	credit	worthiness	and	near-term	prospects	of	the	issuer,	(iii)	the	length	of	time	to	maturity,	(iv)	future	economic conditions	and	market	forecasts	and	(v)	the	Company's	intent	and	ability	to	retain	its	investment	for	a	period	of	time	sufficient	to	allow	for	recovery	of	market	value.	The	Company	limits	its	exposure	by primarily	investing	in	highly	rated	investments	issued	by	municipalities.

# CRITICAL	ACCOUNTING	POLICIES

The	SEC's	Financial	Reporting	Release	No.	60,	"Cautionary	Advice	Regarding	Disclosure	About	Critical	Accounting	Policies"	("FRR	60"),	suggests	companies	provide	additional	disclosure and	commentary	on	those	accounting	policies	considered	most	critical.	FRR	60	considers	an	accounting	policy	to	be	critical	if	it	is	important	to	the	Company's	financial	condition	and	results	of operations	and	requires	significant	judgment	and	estimation	on	the	part	of	management	in	its	application.	The	Company's	estimates	are	often	based	on	complex	judgments,	probabilities	and	assumptions that	we	believe	to	be	reasonable,	but	that	are	inherently	uncertain	and	unpredictable.	It	is	also	possible	that	other	professionals,	applying	reasonable	judgment	to	the	same	facts	and	circumstances,	could develop	and	support	a	range	of	alternative	estimated	amounts.	The	Company	believes	that	the	following	list	represents	its	critical	accounting	policies	as	contemplated	by	FRR	60.	For	a	discussion	of	all of	the	Company's	significant	accounting	policies,	see	Notes	3	and	4	to	the	accompanying	audited	consolidated	financial	statements.

# Sales	Reserves	and	Uncollectible	Accounts

A	significant	area	of	judgment	affecting	reported	revenue	and	net	income	is	estimating	sales	reserves,	which	represent	that	portion	of	gross	revenues	not	expected	to	be	realized.	In	particular, wholesale	revenue	is	reduced	by	estimates	of	returns,	discounts,	end-of-season	markdowns	and	operational	chargebacks.	Retail	revenue,	including	e-commerce	sales,	also	is	reduced	by	estimates	of returns.

In	determining	estimates	of	returns,	discounts,	end-of-season	markdowns	and	operational	chargebacks,	management	analyzes	historical	trends,	seasonal	results,	current	economic	and	market conditions	and	retailer	performance.	The	Company	reviews	and	refines	these	estimates	on	a	quarterly	basis.	The	Company's	historical	estimates	of	these	costs	have	not	differed	materially	from	actual results.

Similarly,	management	evaluates	accounts	receivables	to	determine	if	they	will	ultimately	be	collected.	Significant	judgments	and	estimates	are	involved	in	this	evaluation,	including	an	analysis of	specific	risks	on	a	customer-by-customer	basis	for	larger	accounts	and	customers,	and	a	receivables	aging	analysis	that	determines	the	percentage	of	receivables	that	has	historically	been	uncollected by	aged	category.	Based	on	this	information,	management	provides	a	reserve	for	the	estimated	amounts	believed	to	be	uncollectible.	Although	management	believes	that	it	has	adequately	provided	for those	risks	as	part	of	its	bad	debt	reserve,	a	severe	and	prolonged	adverse	impact	on	its	major	customers'	business	operations	could	have	a	corresponding	material	adverse	effect	on	the	Company's	net sales,	cash	flows	and/or	financial	condition.

See	"Accounts	Receivable"	in	Note	3	to	the	accompanying	audited	consolidated	financial	statements	for	an	analysis	of	the	activity	in	the	Company's	sales	reserves	and	allowance	for	doubtful accounts	for	each	of	the	three	fiscal	years	presented.

# Inventories

The	Company	holds	inventory	that	is	sold	through	wholesale	distribution	channels	to	major	department	stores	and	specialty	retail	stores,	including	its	own	retail	stores.	The	Company	also	holds retail	inventory	that	is	sold	in	its	own	stores	directly	to	consumers.	Wholesale	and	retail	inventories	are	stated	at	the	lower	of	cost	or	estimated	realizable	value.	Cost	for	wholesale	inventories	is determined	using	the	first-in,	first-out	("FIFO")	method	and	cost	for	retail	inventories	is	determined	on	a	moving-average	cost	basis.

The	Company	continually	evaluates	the	composition	of	its	inventories,	assessing	slow-turning	product	and	fashion	product.	Estimated	realizable	value	of	inventory	is	determined	based	on	an analysis	of	historical	sales	trends	of	the	Company's	individual	product	lines,	the	impact	of	market	trends	and	economic	conditions,	and	the	value	of	current	orders	in-house	relating	to	the	future	sales	of inventory.	Estimates	may	differ	from	actual	results	due	to	quantity,	quality	and	mix	of	products	in	inventory,	consumer	and	retailer	preferences	and	market	conditions.	The	Company's	historical	estimates of	these	costs	and	its	provisions	have	not	differed	materially	from	actual	results.

Reserves	for	inventory	shrinkage,	representing	the	risk	over	physical	loss	of	inventory,	are	estimated	based	on	historical	experience	and	are	adjusted	based	upon	physical	inventory	counts.

# Purchase	Accounting

The	Company	accounts	for	its	business	acquisitions	under	the	purchase	method	of	accounting.	As	such,	the	total	cost	of	acquisitions	is	allocated	to	the	underlying	net	assets	based	on	their respective	estimated	fair	values.	The	excess	of	the	purchase	price	over	the	estimated	fair	values	of	the	net	assets	acquired	is	recorded	as	goodwill.	Determining	the	fair	value	of	assets	acquired	and liabilities	assumed	requires	management's	judgment	and	often	involves	the	use	of	significant	estimates	and	assumptions,	including	assumptions	with	respect	to	future	cash	inflows	and	outflows,	discount rates,	asset	lives	and	market	multiples,	among	other	items.

In	addition,	in	connection	with	its	business	acquisitions,	the	Company	evaluates	the	terms	of	any	pre-existing	relationships	to	determine	if	a	settlement	of	the	pre-existing	relationship	exists. These	pre-existing	relationships	primarily	relate	to	licensing	agreements.	In	accordance	with	the	Emerging	Issues	Task	Force	("EITF")	Issue	No.	04-1,	"Accounting	for	Pre-existing	Relationships between	the	Parties	to	a	Business	Combination,"	the	Company	is	required	to	allocate	the	aggregate	consideration	exchanged	in	these	transactions	between	the	value	of	the	business	acquired	and	the	value of	the	settlement	of	any	pre-existing	relationships	in	proportion	to	estimates	of	their	respective	fair	values.	If	the	terms	of	the	pre-existing	relationships	were	determined	to	not	be	reflective	of	market,	a settlement	gain	or	loss	would	be	recognized	in	earnings.	Accordingly,	significant	judgment	is	required	to	determine	the	respective	fair	values	of	the	business	acquired	and	the	value	of	the	settlement	of	the pre-existing	relationship.	The	Company	has	historically	utilized	independent	valuation	firms	to	assist	in	the	determination	of	fair	value.

# Fair	Value	Measurements

In	September	2006,	the	Financial	Accounting	Standards	Board	("FASB")	issued	FAS	No.	157,	"Fair	Value	Measurements"	("FAS	157"	or	the	"Standard").	FAS	157	defines	"fair	value"	as	the price	that	would	be	received	to	sell	an	asset	or	paid	to	transfer	a	liability	in	an	orderly	transaction	between	market	participants	at	the	measurement	date	within	an	identified	principal	or	most	advantageous market,	establishes	a	framework	for	measuring	fair	value	in	accordance	with	US	GAAP	and	expands	disclosures	regarding	fair	value	measurements	through	a	three-level	valuation	hierarchy.	The Company	adopted	the	provisions	of	FAS	157	for	all	of	its	financial	assets	and	liabilities	within	the	Standard's	scope	as	of	the	beginning	of	Fiscal	2009	(March	30,	2008).	The	Company	uses	judgment	in the	determination	of	the	applicable	level	within	the	hierarchy	of	a	particular	asset	or	liability	when	evaluating	the	inputs	used	in	valuation	as	of	the	measurement	date,	notably	the	extent	to	which	the inputs	are	market-based	(observable)	or	internally	derived	(unobservable).	See	Notes	4	and	15	to	the	accompanying	audited	consolidated	financial	statements	for	further	discussion	of	the	effect	of	this accounting	change	on	the	Company's	consolidated	financial	statements.

# Impairment	of	Goodwill	and	Other	Intangible	Assets

Goodwill	and	other	intangible	assets	are	accounted	for	in	accordance	with	the	provisions	of	FAS	No.	142,	"Goodwill	and	Other	Intangible	Assets"	("FAS	142").	Under	FAS	142,	goodwill, including	any	goodwill	included	in	the	carrying	value	of	investments	accounted	for	using	the	equity	method	of	accounting,	and	certain	other	intangible	assets	deemed	to	have	indefinite	useful	lives,	are not	amortized.	Rather,	goodwill	and	such	indefinite-lived	intangible	assets	are	assessed	for	impairment	at	least	annually	based	on	comparisons	of	their	respective	fair	values	to	their	carrying	values. Finite-lived	intangible	assets	are	amortized	over	their	respective	estimated	useful	lives	and,	along	with	other	long-lived	assets,	are	evaluated	for	impairment	periodically	whenever	events	or	changes	in circumstances	indicate	that	their	related	carrying	amounts	may	not	be	recoverable	in	accordance	with	FAS	No.	144,	"Accounting	for	the	Impairment	or	Disposal	of	Long-Lived	Assets"	("FAS	144").

In	accordance	with	FAS	142,	goodwill	impairment	is	determined	using	a	two-step	process.	The	first	step	of	the	goodwill	impairment	test	is	to	identify	potential	impairment	by	comparing	the	fair value	of	a	reporting	unit	with	its	net	book	value	(or	carrying	amount),	including	goodwill.	If	the	fair	value	of	a	reporting	unit	exceeds	its	carrying	amount,	goodwill	of	the	reporting	unit	is	considered	not to	be	impaired	and	performance	of	the	second	step	of	the	impairment	test	is	unnecessary.	If	the	carrying	amount	of	a	reporting	unit	exceeds	its	fair	value,	the	second	step	of	the	goodwill	impairment	test	is performed	to	measure	the	amount	of	impairment	loss,	if	any.	The	second	step	of	the	goodwill	impairment	test	compares	the	implied	fair	value	of	the	reporting	unit's	goodwill	with	the	carrying	amount

of	that	goodwill.	If	the	carrying	amount	of	the	reporting	unit's	goodwill	exceeds	the	implied	fair	value	of	that	goodwill,	an	impairment	loss	is	recognized	in	an	amount	equal	to	that	excess.	The	implied fair	value	of	goodwill	is	determined	in	the	same	manner	as	the	amount	of	goodwill	recognized	in	a	business	combination.	That	is,	the	fair	value	of	the	reporting	unit	is	allocated	to	all	of	the	assets	and liabilities	of	that	unit	(including	any	unrecognized	intangible	assets)	as	if	the	reporting	unit	had	been	acquired	in	a	business	combination	and	the	fair	value	was	the	purchase	price	paid	to	acquire	the reporting	unit.

Determining	the	fair	value	of	a	reporting	unit	under	the	first	step	of	the	goodwill	impairment	test	and	determining	the	fair	value	of	individual	assets	and	liabilities	of	a	reporting	unit	(including unrecognized	intangible	assets)	under	the	second	step	of	the	goodwill	impairment	test	is	judgmental	in	nature	and	often	involves	the	use	of	significant	estimates	and	assumptions.	Similarly,	estimates	and assumptions	are	used	in	determining	the	fair	value	of	other	intangible	assets.	These	estimates	and	assumptions	could	have	a	significant	impact	on	whether	or	not	an	impairment	charge	is	recognized	and the	magnitude	of	any	such	charge.	To	assist	management	in	the	process	of	determining	goodwill	impairment,	the	Company	reviews	and	considers	appraisals	from	independent	valuation	firms.	Estimates of	fair	value	are	primarily	determined	using	discounted	cash	flows,	market	comparisons	and	recent	transactions.	These	approaches	use	significant	estimates	and	assumptions,	including	projected	future cash	flows	(including	timing),	discount	rates	reflecting	the	risks	inherent	in	future	cash	flows,	perpetual	growth	rates	and	determination	of	appropriate	market	comparables.

The	impairment	test	for	other	indefinite-lived	intangible	assets	consists	of	a	comparison	of	the	fair	value	of	the	intangible	asset	with	its	carrying	value.	If	the	carrying	value	of	the	indefinite-lived intangible	asset	exceeds	its	fair	value,	an	impairment	loss	is	recognized	equal	to	the	excess.	In	addition,	in	evaluating	finite-lived	intangible	assets	for	recoverability,	the	Company	uses	its	best	estimate	of future	cash	flows	expected	to	result	from	the	use	of	the	asset	and	eventual	disposition	in	accordance	with	FAS	144.	To	the	extent	that	estimated	future	undiscounted	net	cash	flows	attributable	to	the	asset are	less	than	the	carrying	amount,	an	impairment	loss	is	recognized	equal	to	the	difference	between	the	carrying	value	of	such	asset	and	its	fair	value.

There	have	been	no	impairment	losses	recorded	in	connection	with	the	assessment	of	the	recoverability	of	goodwill	or	other	intangible	assets	during	any	of	the	three	fiscal	years	presented.

# Impairment	of	Other	Long-Lived	Assets

Property	and	equipment,	along	with	other	long-lived	assets,	are	evaluated	for	impairment	periodically	whenever	events	or	changes	in	circumstances	indicate	that	their	related	carrying	amounts may	not	be	recoverable	in	accordance	with	FAS	144.	In	evaluating	long-lived	assets	for	recoverability,	the	Company	uses	its	best	estimate	of	future	cash	flows	expected	to	result	from	the	use	of	the	asset and	its	eventual	disposition.	To	the	extent	that	estimated	future	undiscounted	net	cash	flows	attributable	to	the	asset	are	less	than	the	carrying	amount,	an	impairment	loss	is	recognized	equal	to	the difference	between	the	carrying	value	of	such	asset	and	its	fair	value.	Assets	to	be	disposed	of	and	for	which	there	is	a	committed	plan	of	disposal	are	reported	at	the	lower	of	carrying	value	or	fair	value less	costs	to	sell.

In	determining	future	cash	flows,	the	Company	takes	various	factors	into	account,	including	changes	in	merchandising	strategy,	the	emphasis	on	retail	store	cost	controls,	the	effects	of macroeconomic	trends	such	as	consumer	spending,	and	the	impacts	of	more	experienced	retail	store	managers	and	increased	local	advertising.	Since	the	determination	of	future	cash	flows	is	an	estimate of	future	performance,	there	may	be	future	impairments	in	the	event	that	future	cash	flows	do	not	meet	expectations.

During	Fiscal	2009	and	Fiscal	2008,	the	Company	recorded	non-cash	impairment	charges	of	$55.4	million	and	$5.0	million,	respectively,	to	reduce	the	net	carrying	value	of	certain	long-lived assets	primarily	in	its	Retail	segment	to	their	estimated	fair	value.	No	impairment	charges	were	recorded	in	Fiscal	2007.	See	Note	11	to	the	accompanying	audited	consolidated	financial	statements	for further	discussion.

# Income	Taxes

Income	taxes	are	provided	using	the	asset	and	liability	method	prescribed	by	FAS	No.	109,	"Accounting	for	Income	Taxes"	("FAS	109").	Under	this	method,	income	taxes	(i.e.,	deferred	tax assets	and	liabilities,	current	taxes

payable/refunds	receivable	and	tax	expense)	are	recorded	based	on	amounts	refundable	or	payable	in	the	current	year	and	include	the	results	of	any	difference	between	US	GAAP	and	tax	reporting. Deferred	income	taxes	reflect	the	tax	effect	of	certain	net	operating	loss,	capital	loss	and	general	business	credit	carryforwards	and	the	net	tax	effects	of	temporary	differences	between	the	carrying amount	of	assets	and	liabilities	for	financial	statement	and	income	tax	purposes,	as	determined	under	enacted	tax	laws	and	rates.	The	Company	accounts	for	the	financial	effect	of	changes	in	tax	laws	or rates	in	the	period	of	enactment.

In	addition,	valuation	allowances	are	established	when	management	determines	that	it	is	more-likely-than-not	that	some	portion	or	all	of	a	deferred	tax	asset	will	not	be	realized.	Tax	valuation allowances	are	analyzed	periodically	and	adjusted	as	events	occur,	or	circumstances	change,	that	warrant	adjustments	to	those	balances.

Effective	April	1,	2007,	the	Company	adopted	FIN	48.	Upon	the	adoption	of	the	provisions	of	FIN	48,	the	Company	changed	its	policy	related	to	the	accounting	for	income	tax	uncertainties.	If the	Company	considers	that	a	tax	position	is	"more-likely-than-not"	of	being	sustained	upon	audit,	based	solely	on	the	technical	merits	of	the	position,	it	recognizes	the	tax	benefit.	The	Company measures	the	tax	benefit	by	determining	the	largest	amount	that	is	greater	than	50%	likely	of	being	realized	upon	settlement,	presuming	that	the	tax	position	is	examined	by	the	appropriate	taxing authority	that	has	full	knowledge	of	all	relevant	information.	These	assessments	can	be	complex	and	require	significant	judgment,	and	the	Company	often	obtains	assistance	from	external	advisors.	To the	extent	that	the	Company's	estimates	change	or	the	final	tax	outcome	of	these	matters	is	different	than	the	amounts	recorded,	such	differences	will	impact	the	income	tax	provision	in	the	period	in which	such	determinations	are	made.	If	the	initial	assessment	fails	to	result	in	the	recognition	of	a	tax	benefit,	the	Company	regularly	monitors	its	position	and	subsequently	recognizes	the	tax	benefit	if (i)	there	are	changes	in	tax	law	or	analogous	case	law	that	sufficiently	raise	the	likelihood	of	prevailing	on	the	technical	merits	of	the	position	to	more-likely-than-not,	(ii)	the	statute	of	limitations	expires, or	(iii)	there	is	a	completion	of	an	audit	resulting	in	a	settlement	of	that	tax	year	with	the	appropriate	agency.	Uncertain	tax	positions	are	classified	as	current	only	when	the	Company	expects	to	pay	cash within	the	next	twelve	months.	Interest	and	penalties,	if	any,	are	recorded	within	the	provision	for	income	taxes	in	the	Company's	consolidated	statements	of	operations	and	are	classified	on	the consolidated	balance	sheets	with	the	related	liability	for	unrecognized	tax	benefits.

See	Note	13	to	the	accompanying	audited	consolidated	financial	statements	for	further	discussion	of	the	Company's	income	taxes	and	the	adoption	of	FIN	48.

# Contingencies

The	Company	periodically	is	exposed	to	various	contingencies	in	the	ordinary	course	of	conducting	its	business,	including	certain	litigations,	alleged	information	system	security	breach	matters, contractual	disputes,	employee	relation	matters,	various	tax	audits,	and	trademark	and	intellectual	property	matters	and	disputes.	In	accordance	with	FAS	No.	5,	"Accounting	for	Contingencies" ("FAS	5"),	the	Company	records	a	liability	for	such	contingencies	to	the	extent	that	it	concludes	their	occurrence	is	probable	and	the	related	losses	are	estimable.	In	addition,	if	it	is	reasonably	possible that	an	unfavorable	settlement	of	a	contingency	could	exceed	the	established	liability,	the	Company	discloses	the	estimated	impact	on	its	liquidity,	financial	condition	and	results	of	operations. Management	considers	many	factors	in	making	these	assessments.	As	the	ultimate	resolution	of	contingencies	is	inherently	unpredictable,	these	assessments	can	involve	a	series	of	complex	judgments about	future	events	including,	but	not	limited	to,	court	rulings,	negotiations	between	affected	parties	and	governmental	actions.	As	a	result,	the	accounting	for	loss	contingencies	relies	heavily	on estimates	and	assumptions.

# Stock-Based	Compensation

The	Company	accounts	for	stock-based	compensation	arrangements	in	accordance	with	FAS	No.	123R,	"Share-Based	Payment"	("FAS	123R"),	which	requires	all	share-based	payments	to employees	and	non-employee	directors	to	be	expensed	based	on	the	grant	date	fair	value	of	the	awards	over	the	requisite	service	period,	adjusted	for	estimated	forfeitures.

# Stock	Options

Stock	options	are	granted	to	employees	and	non-employee	directors	with	exercise	prices	equal	to	fair	market	value	at	the	date	of	grant.	The	Company	uses	the	Black-Scholes	option-pricing	model to	estimate	the	fair	value	of	stock	options	granted,	which	requires	the	input	of	subjective	assumptions.	Certain	key	assumptions	involve	estimating	future	uncertain	events.	The	key	factors	influencing	the estimation	process	include	the	expected	term	of	the	option,	the	expected	stock	price	volatility	factor,	the	expected	dividend	yield	and	risk-free	interest	rate,	among	others.	Generally,	once	stock	option values	are	determined,	current	accounting	practices	do	not	permit	them	to	be	changed,	even	if	the	estimates	used	are	different	from	the	actuals.

Determining	the	fair	value	of	stock-based	compensation	at	the	date	of	grant	requires	significant	judgment	by	management,	including	estimates	of	the	above	Black-Scholes	assumptions.	In addition,	judgment	is	required	in	estimating	the	number	of	stock-based	awards	that	are	expected	to	be	forfeited.	If	actual	results	differ	significantly	from	these	estimates,	if	management	changes	its assumptions	for	future	stock-based	award	grants,	or	if	there	are	changes	in	market	conditions,	stock-based	compensation	expense	and	the	Company's	results	of	operations	could	be	materially	impacted.

# Restricted	Stock	and	Restricted	Stock	Units	("RSUs")

The	Company	grants	restricted	shares	of	Class	A	common	stock	and	service-based	RSUs	to	certain	of	its	senior	executives	and	non-employee	directors.	In	addition,	the	Company	grants performance-based	RSUs	to	such	senior	executives	and	other	key	executives,	and	certain	other	employees	of	the	Company.	The	fair	values	of	restricted	stock	shares	and	RSUs	are	based	on	the	fair	value of	unrestricted	Class	A	common	stock,	as	adjusted	to	reflect	the	absence	of	dividends	for	those	restricted	securities	that	are	not	entitled	to	dividend	equivalents.	Compensation	expense	for	performance- based	RSUs	is	recognized	over	the	related	service	period	when	attainment	of	the	performance	goals	is	deemed	probable,	which	involves	judgment	on	the	part	of	management.

# RECENTLY	ISSUED	ACCOUNTING	STANDARDS

Refer	to	Note	4	to	the	accompanying	audited	consolidated	financial	statements	for	a	discussion	of	certain	accounting	standards	the	Company	is	not	yet	required	to	adopt	which	may	impact	its results	of	operations	and/or	financial	condition	in	future	reporting	periods.

# Item	7A. Quantitative	and	Qualitative	Disclosures	about	Market	Risk

For	a	discussion	of	the	Company's	exposure	to	market	risk,	see	"Market	Risk	Management"	in	Item	7	included	elsewhere	in	this	Annual	Report	on	Form	10-K.

# Item	8. Financial	Statements	and	Supplementary	Data

See	the	"Index	to	Consolidated	Financial	Statements"	appearing	at	the	end	of	this	Annual	Report	on	Form	10-K.

# Item	9. Changes	in	and	Disagreements	with	Accountants	on	Accounting	and	Financial	Disclosure

# Item	9A. Controls	and	Procedures

# (a)	Evaluation	of	Disclosure	Controls	and	Procedures

Disclosure	controls	and	procedures	are	the	controls	and	other	procedures	of	an	issuer	that	are	designed	to	provide	reasonable	assurance	that	information	required	to	be	disclosed	by	the	issuer	in the	reports	that	it	files	or	submits	under	the	Securities	Exchange	Act	of	1934	is	recorded,	processed,	summarized	and	reported	within	the	time	period	specified	in	the	Securities	and	Exchange Commission's	rules	and	forms.	Disclosure	controls	and	procedures	include,	without	limitation,	controls	and	procedures	designed	to	ensure	that	material	information	required	to	be	disclosed	by	an	issuer in	the	reports	that	it	files	or	submits	under	the	Securities	Exchange	Act	of	1934

is	accumulated	and	communicated	to	the	issuer's	management,	including	its	principal	executive	and	principal	financial	officers,	or	persons	performing	similar	functions,	as	appropriate	to	allow	timely decisions	regarding	required	disclosure.

We	have	evaluated,	under	the	supervision	and	with	the	participation	of	our	management,	including	our	Chief	Executive	Officer	and	Chief	Financial	Officer,	the	effectiveness	of	our	disclosure controls	and	procedures,	as	defined	in	Rules	13a-15(e)	and	15d-15(e)	of	the	Securities	Exchange	Act	of	1934,	as	of	the	end	of	the	fiscal	year	covered	by	this	annual	report.	Based	on	that	evaluation,	our Chief	Executive	Officer	and	Chief	Financial	Officer	have	concluded	that	the	Company's	disclosure	controls	and	procedures	were	effective	at	the	reasonable	assurance	level,	as	of	the	fiscal	year	end covered	by	this	Annual	Report	on	Form	10-K.

# (b)	Management's	Report	of	Internal	Control	Over	Financial	Reporting

Management	is	responsible	for	establishing	and	maintaining	adequate	internal	control	over	financial	reporting,	as	defined	in	Securities	Exchange	Act	Rule	13a-15(f).	Internal	control	over	financial reporting	is	designed	to	provide	reasonable	assurance	regarding	the	reliability	of	financial	reporting	and	preparation	of	financial	statements	for	external	purposes	in	accordance	with	U.S.	Generally Accepted	Accounting	Principles.	Internal	control	over	financial	reporting	includes	maintaining	records	that	in	reasonable	detail	accurately	and	fairly	reflect	our	transactions;	providing	reasonable assurance	that	transactions	are	recorded	as	necessary	for	preparation	of	our	financial	statements;	providing	reasonable	assurance	that	receipts	and	expenditures	of	the	Company's	assets	are	made	in accordance	with	management	authorization;	and	providing	reasonable	assurance	that	unauthorized	acquisition,	use	or	disposition	of	the	Company's	assets	that	could	have	a	material	effect	on	our financial	statements	would	be	prevented	or	detected	on	a	timely	basis.	Because	of	its	inherent	limitations,	internal	control	over	financial	reporting	is	not	intended	to	provide	absolute	assurance	that	a misstatement	of	our	financial	statements	would	be	prevented	or	detected.	Further,	the	evaluation	of	the	effectiveness	of	internal	control	over	financial	reporting	was	made	as	of	a	specific	date,	and continued	effectiveness	in	future	periods	is	subject	to	the	risks	that	controls	may	become	inadequate	because	of	changes	in	conditions	or	that	the	degree	of	compliance	with	the	policies	and	procedures may	decline.

Under	the	supervision	and	with	the	participation	of	our	management,	including	our	Chief	Executive	Officer	and	Chief	Financial	Officer,	we	conducted	an	evaluation	of	the	effectiveness	of	our internal	control	over	financial	reporting	as	of	the	end	of	the	fiscal	year	covered	by	this	report	based	on	the	framework	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission ("COSO")	in	Internal	Control-Integrated	Framework.	Based	on	this	evaluation,	management	concluded	that	the	Company's	internal	controls	over	financial	reporting	were	effective	at	the	reasonable assurance	level	as	of	the	fiscal	year	end	covered	by	this	Annual	Report	on	Form	10-K.

Ernst	&	Young	LLP,	the	Company's	independent	registered	public	accounting	firm,	has	issued	an	attestation	report	on	the	Company's	internal	control	over	financial	reporting	as	included elsewhere	herein.

# (c)	Changes	in	Internal	Controls	Over	Financial	Reporting

There	has	been	no	change	in	the	Company's	internal	control	over	financial	reporting	during	the	fourth	quarter	of	Fiscal	2009	that	has	materially	affected,	or	is	reasonably	likely	to	materially affect,	the	Company's	internal	control	over	financial	reporting.

# Item	9B. Other	Information

On	May	21,	2009,	the	Company's	board	of	directors	adopted	an	amendment	to	the	1997	Long-Term	Stock	Incentive	Plan	that	allows	the	Company	to	seek	repayment	in	certain	circumstances	of stock-based	and	other	compensation	awards	that	are	granted	under	the	plan	on	or	after	May	21,	2009	to	the	Company's	named	executive	officers.	The	complete	text	of	the	amendment	is	included	as Exhibit	10.26	to	this	Annual	Report	on	Form	10-K.

# PART	III

# Item	10. Directors,	Executive	Officers	and	Corporate	Governance

Information	relating	to	our	directors	and	corporate	governance	will	be	set	forth	in	the	Company's	proxy	statement	for	its	2009	annual	meeting	of	stockholders	to	be	filed	within	120	days	after March	28,	2009	(the	"Proxy	Statement")	and	is	incorporated	by	reference	herein.	Information	relating	to	our	executive	officers	is	set	forth	in	Item	I	of	this	Annual	Report	on	Form	10-K	under	the	caption "Executive	Officers."

The	Company	has	a	Code	of	Ethics	for	Principal	Executive	Officers	and	Senior	Financial	Officers	that	applies	to	our	principal	executive	officer,	our	principal	operating	officer,	our	principal financial	officer,	our	principal	accounting	officer	and	our	controller.	You	can	find	our	Code	of	Ethics	for	Principal	Executive	Officers	and	Senior	Financial	Officers	on	our	internet	site,

http://investor.ralphlauren.com.	We	will	post	any	amendments	to	the	Code	of	Ethics	for	Principal	Executive	Officers	and	Senior	Financial	Officers	and	any	waivers	that	are	required	to	be	disclosed	by	the rules	of	either	the	SEC	or	the	NYSE	on	our	internet	site.

# Item	11. Executive	Compensation

Information	relating	to	executive	and	director	compensation	will	be	set	forth	in	the	Proxy	Statement	and	such	information	is	incorporated	by	reference	herein.

# Item	12. Security	Ownership	of	Certain	Beneficial	Owners	and	Management	and	Related	Stockholder	Matters

# Equity	Compensation	Plan	Information	as	of	March	28,	2009

The	following	table	sets	forth	information	as	of	March	28,	2009	regarding	compensation	plans	under	which	the	Company's	equity	securities	are	authorized	for	issuance:

| Plan	Category | (a)<br>Numbers	of<br>Securities<br>to	be	Issued	upon<br>Exercise	of<br>Outstanding<br>Options,	Warrants<br>and	Rights | (b)<br>Weighted-Average<br>Exercise	Price	of<br>Outstanding	Options	($) | (c)<br>Number	of	Securities<br>Remaining	Available	for<br>Future	Issuance	Under<br>Equity	Compensation<br>Plans	(Excluding<br>Securities	Reflected	in<br>Column	(a)) |
| :--- | :--- | :--- | :--- |
| Equity\tcompensation\tplans\tapproved\tby\tsecurity\tholders | 7,524,817(1) | $44.22(2) | 3,975,179(3) |
| Equity\tcompensation\tplans\tnot\tapproved\tby\tsecurity\tholders | — | — | — |
| Total | 7,524,817 | $44.22 | 3,975,179 |

(1) Consists	of	5,698,269	options	to	purchase	shares	of	our	Class	A	common	stock	and	1,826,548	restricted	stock	units	that	are	payable	solely	in	shares	of	Class	A	common	stock.	Does	not	include 23,424	outstanding	restricted	shares	that	are	subject	to	forfeiture.

(2) Represents	the	weighted	average	exercise	price	of	the	outstanding	stock	options.	No	exercise	price	is	payable	with	respect	to	the	outstanding	restricted	stock	units.

(3) All	of	the	securities	remaining	available	for	future	issuance	set	forth	in	column	(c)	may	be	in	the	form	of	options,	stock	appreciation	rights,	restricted	stock,	restricted	stock	units,	performance awards	or	other	stock-based	awards	under	the	Company's	Amended	and	Restated	1997	Long-Term	Stock	Incentive	Plan.	An	additional	23,424	outstanding	shares	of	restricted	stock	granted	under the	Company's	Amended	and	Restated	1997	Long-Term	Stock	Incentive	Plan	that	remain	subject	to	forfeiture	are	not	reflected	in	column	(c).

Other	information	relating	to	security	ownership	of	certain	beneficial	owners	and	management	will	be	set	forth	in	the	Proxy	Statement	and	such	information	is	incorporated	by	reference	herein.

# Item	13. Certain	Relationships	and	Related	Transactions,	and	Director	Independence

The	information	required	to	be	included	by	Item	13	of	Form	10-K	will	be	included	in	the	Proxy	Statement	and	such	information	is	incorporated	by	reference	herein.

# Item	14. Principal	Accounting	Fees	and	Services

# PART	IV

# Item	15. Exhibits	and	Financial	Statement	Schedules

(a)	1., 2.	Financial	Statements	and	Schedules.	See	index	on	Page	F-1.

3.	Exhibits

# Exhibit

3.1 Amended	and	Restated	Certificate	of	Incorporation	of	the	Company	(filed	as	Exhibit	3.1	to	the	Company's	Registration	Statement	on	Form	S-1	(File	No.	333-24733)	(the	"S-1"))*

3.2 Second	Amended	and	Restated	By-laws	of	the	Company	(filed	as	Exhibit	10.2	to	the	Form	10-Q	for	the	quarterly	period	ended	September	29,	2007)*

	 10.1 Registration	Rights	Agreement	dated	as	of	June	9,	1997	by	and	among	Ralph	Lauren,	GS	Capital	Partners,	L.P.,	GS	Capital	Partner	PRL	Holding	I,	L.P.,	GS	Capital	Partners	PRL Holding	II,	L.P.,	Stone	Street	Fund	1994,	L.P.,	Stone	Street	1994	Subsidiary	Corp.,	Bridge	Street	Fund	1994,	L.P.,	and	Polo	Ralph	Lauren	Corporation	(filed	as	Exhibit	10.3	to	the S-1)*

	 10.2 U.S.A.	Design	and	Consulting	Agreement,	dated	January	1,	1985,	between	Ralph	Lauren,	individually	and	d/b/a	Ralph	Lauren	Design	Studio,	and	Cosmair,	Inc.,	and	letter Agreement	related	thereto	dated	January	1,	1985**	(filed	as	Exhibit	10.4	to	the	S-1)*

	 10.3 Restated	U.S.A.	License	Agreement,	dated	January	1,	1985,	between	Ricky	Lauren	and	Mark	N.	Kaplan,	as	Licensor,	and	Cosmair,	Inc.,	as	Licensee,	and	letter	Agreement	related thereto	dated	January	1,	1985**	(filed	as	Exhibit	10.5	to	the	S-1)*

	 10.4 Foreign	Design	and	Consulting	Agreement,	dated	January	1,	1985,	between	Ralph	Lauren,	individually	and	d/b/a	Ralph	Lauren	Design	Studio,	as	Licensor,	and	L'Oreal	S.A.,	as Licensee,	and	letter	Agreements	related	thereto	dated	January	1,	1985,	September	16,	1994	and	October	25,	1994**	(filed	as	Exhibit	10.6	to	the	S-1)*

	 10.5 Restated	Foreign	License	Agreement,	dated	January	1,	1985,	between	The	Polo/Lauren	Company,	as	Licensor,	and	L'Oreal	S.A.,	as	Licensee,	Letter	Agreement	related	thereto	dated January	1,	1985,	and	Supplementary	Agreement	thereto,	dated	October	1,	1991**	(filed	as	Exhibit	10.7	to	the	S-1)* 	 10.6 Amendment,	dated	November	27,	1992,	to	Foreign	Design	and	Consulting	Agreement	and	Restated	Foreign	License	Agreement**	(filed	as	Exhibit	10.8	to	the	S-1)* 	 10.7 Agency	Agreement	dated	October	5,	2006,	between	Polo	Ralph	Lauren	Corporation	and	Deutsche	Bank	AG,	London	Branch	and	Deutsche	Bank	Luxemburg	S.A.,	as	fiscal	and principal	paying	agent	(filed	as	Exhibit	10.2	to	the	Form	10-Q	for	the	quarterly	period	ended	December	30,	2006)*

	 10.8 Form	of	Indemnification	Agreement	between	Polo	Ralph	Lauren	Corporation	and	its	Directors	and	Executive	Officers	(filed	as	Exhibit	10.26	to	the	S-1)*

	 10.9 Amended	and	Restated	Employment	Agreement,	effective	as	of	July	23,	2002,	between	Polo	Ralph	Lauren	Corporation	and	Roger	N.	Farah	(filed	as	Exhibit	10.1	to	the	Form	10-Q for	the	quarterly	period	ended	June	29,	2002)*†

	 10.10 Amended	and	Restated	Employment	Agreement,	dated	as	of	June	17,	2003,	between	Polo	Ralph	Lauren	Corporation	and	Ralph	Lauren	(filed	as	Exhibit	10.1	to	the	Form	10-Q	for	the quarterly	period	ended	June	28,	2003)*†

	 10.11 Non-Qualified	Stock	Option	Agreement,	dated	as	of	June	8,	2004,	between	Polo	Ralph	Lauren	Corporation	and	Ralph	Lauren	(filed	as	Exhibit	10.14	to	the	Company's	Annual	Report on	Form	10-K	for	the	fiscal	year	ended	April	2,	2005	(the	"Fiscal	2006	10-K"))*†

Number Description 	 10.12 Restricted	Stock	Unit	Award	Agreement,	dated	as	of	June	8,	2004,	between	Polo	Ralph	Lauren	Corporation	and	Ralph	Lauren	(filed	as	Exhibit	10.15	to	the	Fiscal	2006	10-K)*† 	 10.13 Polo	Ralph	Lauren	Corporation	Executive	Officer	Annual	Incentive	Plan,	as	amended	as	of	August	9,	2007	(filed	as	Exhibit	10.1	to	the	Form	10-Q	for	the	quarterly	period	ended December	29,	2007)*†

	 10.14 Amendment	No.	1,	dated	July	1,	2004,	to	the	Amended	and	Restated	Employment	Agreement	between	Polo	Ralph	Lauren	Corporation	and	Roger	N.	Farah	(filed	as	Exhibit	10.1	to the	Form	10-Q	for	the	quarterly	period	ended	October	2,	2004)*†

	 10.15 Amendment	No.	2,	dated	September	5,	2007,	to	the	Amended	and	Restated	Employment	Agreement	between	Polo	Ralph	Lauren	Corporation	and	Roger	N.	Farah	(filed	as Exhibit	10.1	to	the	Form	10-Q	for	the	quarterly	period	ended	September	29,	2007)*†

	 10.16 Amendment	No.	3,	dated	as	of	December	23,	2008,	to	the	Amended	and	Restated	Employment	Agreement	between	Polo	Ralph	Lauren	Corporation	and	Roger	N.	Farah	(filed	as Exhibit	10.1	to	the	Form	10-Q	for	the	quarterly	period	ended	December	27,	2008)*†

	 10.17 Restricted	Stock	Unit	Award	Agreement,	dated	as	of	July	1,	2004,	between	Polo	Ralph	Lauren	Corporation	and	Roger	N.	Farah	(filed	as	Exhibit	10.18	to	the	Fiscal	2006	10-K)*† 	 10.18 Amendment	No.	1,	dated	as	of	December	23,	2008,	to	the	Restricted	Stock	Unit	Award	Agreement	between	Polo	Ralph	Lauren	Corporation	and	Roger	N.	Farah	(filed	as	Exhibit	10.2 to	the	Form	10-Q	for	the	quarterly	period	ended	December	27,	2008)*†

	 10.19 Restricted	Stock	Award	Agreement,	dated	as	of	July	23,	2002,	between	Polo	Ralph	Lauren	Corporation	and	Roger	N.	Farah	(filed	as	Exhibit	10.19	to	the	Fiscal	2006	10-K)*† 	 10.20 Non-Qualified	Stock	Option	Agreement,	dated	as	of	July	23,	2002,	between	Polo	Ralph	Lauren	Corporation	and	Roger	N.	Farah	(filed	as	Exhibit	10.20	to	the	Fiscal	2006	10-K)*† 	 10.21 Deferred	Compensation	Agreement,	dated	as	of	September	19,	2002,	between	Polo	Ralph	Lauren	Corporation	and	Roger	N.	Farah	(filed	as	Exhibit	10.21	to	the	Fiscal	2006	10-K)*† 	 10.22 Asset	Purchase	Agreement	by	and	among	Polo	Ralph	Lauren	Corporation,	RL	Childrenswear	Company,	LLC	and	The	Seller	Affiliate	Group	(as	defined	therein)	dated	March	25, 2004	(filed	as	Exhibit	10.1	to	the	Form	10-Q	for	the	quarterly	period	ended	July	3,	2004)*

	 10.23 Amendment	No.	1,	dated	as	of	July	2,	2004,	to	Asset	Purchase	Agreement	by	and	among	Polo	Ralph	Lauren	Corporation,	RL	Childrenswear	Company,	LLC	and	The	Seller	Affiliate Group	(as	defined	therein)	(filed	as	Exhibit	10.2	to	the	Form	10-Q	for	the	quarterly	period	ended	July	3,	2004)*

	 10.26 Amendment	No.	2,	dated	as	of	May	21,	2009,	to	the	Polo	Ralph	Lauren	Corporation	1997	Long-Term	Stock	Incentive	Plan,	as	Amended	and	Restated	as	of	August	12,	2004. 	 10.27 Cliff	Restricted	Performance	Share	Unit	Award	Overview	containing	the	standard	terms	of	restricted	performance	share	awards	under	the	Stock	Incentive	Plan	(filed	as	Exhibit	10.1 to	the	Form	10-Q	for	the	quarterly	period	ended	July	1,	2006)*†

	 10.28 Pro-Rata	Restricted	Performance	Share	Unit	Award	Overview	containing	the	standard	terms	of	restriction	performance	share	awards	under	the	Stock	Incentive	Plan	(filed	as Exhibit	10.3	to	the	Form	10-Q	for	the	quarterly	period	ended	July	1,	2006)*†

	 10.29 Stock	Option	Award	Overview	—	U.S.	containing	the	standard	terms	of	stock	option	award	under	the	Stock	Incentive	Plan	(filed	as	Exhibit	10.2	to	the	Form	10-Q	for	the	quarterly period	ended	July	1,	2006)*†

	 10.30 Definitive	Agreement,	dated	April	13,	2007,	among	Polo	Ralph	Lauren	Corporation,	PRL	Japan	Kabushiki	Kaisha,	Onward	Kashiyama	Co.,	Ltd	and	Impact	21	Co.,	Ltd.(filed	as Exhibit	10.27	to	the	Fiscal	2008	10-K)*

	 10.31 Amended	and	Restated	Credit	Agreement	as	of	May	22,	2007	to	the	Credit	Agreement,	dated	as	of	November	28,	2006,	among	Polo	Ralph	Lauren	Corporation,	Polo	JP	Acqui	B.V., the	lenders	party	thereto,	and	JPMorgan	Chase	Bank,	N.A.,	as	administrative	agent	(filed	as	Exhibit	10.1	to	the	Company's	Form	10-Q	for	the	quarterly	period	ended	June	30,	2007)*

Number Description 	 10.32 Amendment	and	Restatement	Agreement,	dated	as	of	May	22,	2007,	among	Polo	Ralph	Lauren	Corporation,	Polo	JP	Acqui	B.V.,	the	lenders	party	thereto,	The	Bank	of	New	York, Citibank,	N.A.,	Bank	of	America,	N.A.	and	Wachovia	Bank	National	Association,	as	syndication	agents,	Sumitomo	Mitsui	Banking	Corporation	and	Deutsche	Bank	Securities,	s	co- agents	and	JPMorgan	Chase	Bank,	N.A.,	as	administrative	agent	under	the	Credit	Agreement	dated	as	of	November	28,	2006	among	Polo	Ralph	Lauren	Corporation,	the	lenders from	time	to	time	party	thereto	and	the	agents	party	thereto	(filed	as	Exhibit	10.2	to	the	Company's	Form	10-Q	for	the	quarterly	period	ended	June	30,	2007)*

	 10.33 Employment	Agreement,	dated	as	of	September	4,	2004,	between	Polo	Ralph	Lauren	Corporation	and	Jackwyn	Nemerov	(filed	as	Exhibit	10.3	to	the	Form	10-Q	for	the	quarterly period	ended	October	2,	2004)*†

	 10.34 Amendment	No.	1,	effective	as	of	January	1,	2009,	to	the	Employment	Agreement	between	Polo	Ralph	Lauren	Corporation	and	Jackwyn	Nemerov	(filed	as	Exhibit	10.5	to	the Form	10-Q	for	the	quarterly	period	ended	December	27,	2008)*†

	 10.36 Amendment	No.	1,	effective	as	of	January	1,	2009,	to	the	Employment	Agreement	between	Polo	Ralph	Lauren	Corporation	and	Tracey	Travis	(filed	as	Exhibit	10.3	to	the	Form	10-Q for	the	quarterly	period	ended	December	27,	2008)*†

	 10.37 Employment	Agreement,	dated	as	of	April	30,	2007,	between	Polo	Ralph	Lauren	Corporation	and	Mitchell	A.	Kosh	(filed	as	Exhibit	10.3	to	the	Company's	Form	10-Q	for	the quarterly	period	ended	June	30,	2007)*†

	 10.38 Amendment	No.	1,	effective	as	of	January	1,	2009,	to	the	Employment	Agreement	between	Polo	Ralph	Lauren	Corporation	and	Mitchell	Kosh	(filed	as	Exhibit	10.4	to	the Form	10-Q	for	the	quarterly	period	ended	December	27,	2008)*†

	 10.39 Cross	Default	and	Term	Extension	Agreement,	dated	May	11,	1998,	among	PRL	USA,	Inc.,	The	Polo/Lauren	Company,	L.P.,	Polo	Ralph	Lauren	Corporation,	Jones	Apparel	Group, Inc.	and	Jones	Investment	Co.,	Inc.	(filed	as	Exhibit	10.1	to	the	Form	10-Q	for	the	quarterly	period	ended	December	28,	2002)*

	 10.40 Amended	and	Restated	Polo	Ralph	Lauren	Supplemental	Executive	Retirement	Plan	(filed	as	Exhibit	10.1	to	the	Company's	Form	10-Q	for	the	quarterly	period	ended	December	31, 2005)*†

	 14.1 Code	of	Ethics	for	Principal	Executive	Officers	and	Senior	Financial	Officers	(filed	as	Exhibit	14.1	to	the	Fiscal	2003	Form	10-K)*

	 21.1 List	of	Significant	Subsidiaries	of	the	Company

	 23.2 Consent	of	Deloitte	&	Touche	LLP

	 32.1 Certification	of	Ralph	Lauren	Pursuant	to	18	U.S.C.	Section	1350,	as	adopted	Pursuant	to	Section	906	of	the	Sarbanes-Oxley	Act	of	2002

	 32.2 Certification	of	Tracey	T.	Travis	Pursuant	to	18	U.S.C.	Section	1350,	as	adopted	pursuant	to	Section	906	of	the	Sarbanes-Oxley	Act	of	2002

Exhibits	32.1	and	32.2	shall	not	be	deemed	"filed"	for	purposes	of	Section	18	of	the	Securities	Exchange	Act	of	1934,	or	otherwise	subject	to	the	liability	of	that	Section.	Such	exhibits	shall	not	be deemed	incorporated	by	reference	into	any	filing	under	the	Securities	Act	of	1933	or	Securities	Exchange	Act	of	1934.

* Incorporated	herein	by	reference.

† Management	contract	or	compensatory	plan	or	arrangement.

** Portions	of	Exhibits	10.2-10.6	have	been	omitted	pursuant	to	a	request	for	confidential	treatment	and	have	been	filed	separately	with	the	Securities	and	Exchange	Commission.

# SIGNATURES

Pursuant	to	the	requirements	of	the	Section	13	or	15(d)	Securities	Exchange	Act	of	1934,	the	registrant	has	caused	this	report	to	be	signed	on	its	behalf	by	the	undersigned,	thereunto	duly authorized,	on	May	26,	2009.

By: /s/		TRACEY	T.	TRAVIS Tracey	T.	Travis

Senior	Vice	President	and	Chief	Financial	Officer (Principal	Financial	and	Accounting	Officer)

Pursuant	to	the	requirements	of	the	Securities	Exchange	Act	of	1934,	this	report	has	been	signed	below	by	the	following	persons	in	the	capacities	and	on	the	dates	indicated:

| /s/		RALPH	LAUREN | Chairman	of	the	Board,	Chief | May	26,	2009 |
| :--- | :--- | :--- |
| Ralph\tLauren | Executive\tOfficer\tand\tDirector |  |
|  | (Principal\tExecutive\tOfficer) |  |
| /s/\t\tROGER\tN.\tFARAH | President,\tChief\tOperating\tOfficer | May\t26,\t2009 |
| Roger\tN.\tFarah | and\tDirector |  |
| /s/\t\tJACKWYN\tL.\tNEMEROV\nJackwyn\tL.\tNemerov | Executive\tVice\tPresident\tand\tDirector | May\t26,\t2009 |
| /s/\t\tTRACEY\tT.\tTRAVIS | Senior\tVice\tPresident\tand\tChief | May\t26,\t2009 |
| Tracey\tT.\tTravis | Financial\tOfficer\t(Principal\tFinancial |  |
|  | and\tAccounting\tOfficer) |  |
| /s/\t\tJOHN\tR.\tALCHIN\nJohn\tR.\tAlchin | Director | May\t26,\t2009 |
| /s/\t\tARNOLD\tH.\tARONSON\nArnold\tH.\tAronson | Director | May\t26,\t2009 |
| /s/\t\tFRANK\tA.\tBENNACK,\tJR.\nFrank\tA.\tBennack,\tJr. | Director | May\t26,\t2009 |
| /s/\t\tDR.\tJOYCE\tF.\tBROWN | Director | May\t26,\t2009 |

# INDEX	TO	CONSOLIDATED	FINANCIAL	STATEMENTS	AND	SUPPLEMENTARY	INFORMATION

	EX-10.26:	AMENDMENT	NO.2	TO	1997	LONG-TERM	STOCK	INCENTIVE	PLAN 	EX-21.1:	LIST	OF	SIGNIFICANT	SUBSIDIARIES

	EX-23.2:	CONSENT	OF	DELOITTE	&	TOUCHE	LLP

# 	EX-31.1:	CERTIFICATION

All	schedules	are	omitted	because	they	are	not	applicable	or	the	required	information	is	shown	in	the	consolidated	financial	statements	or	notes	thereto.

# CONSOLIDATED	BALANCE	SHEETS

|  | March	28,<br>2009 | March	29,<br>2008 |
| :--- | :--- | :--- |
|  | (millions) |  |
| ASSETS |  |  |
| Current\tassets: |  |  |
| Cash\tand\tcash\tequivalents | $481.2 | $551.5 |
| Short-term\tinvestments | 338.7 | 74.3 |
|  | 474.9 | 508.4 |
| Inventories | 525.1 | 514.9 |
| Deferred\ttax\tassets | 101.8 | 76.6 |
| Prepaid\texpenses\tand\tother | 135.0 | 167.8 |
| Total\tcurrent\tassets | 2,056.7 | 1,893.5 |
| Property\tand\tequipment,\tnet | 651.6 | 709.9 |
| Deferred\ttax\tassets | 102.8 | 116.9 |
| Goodwill | 966.4 | 975.1 |
| Intangible\tassets,\tnet | 348.9 | 349.3 |
| Other\tassets | 230.1 | 320.8 |
| Total\tassets | $4,356.5 | $4,365.5 |
| LIABILITIES\tAND\tSTOCKHOLDERS'\tEQUITY |  |  |
| Current\tliabilities: |  |  |
| Accounts\tpayable | $165.9 | $205.7 |
| Income\ttax\tpayable | 35.9 | 28.8 |
| Accrued\texpenses\tand\tother | 472.3 | 467.7 |
| Current\tmaturities\tof\tdebt | — | 206.4 |
| Total\tcurrent\tliabilities | 674.1 | 908.6 |
| Long-term\tdebt | 406.4 | 472.8 |
| Non-current\tliability\tfor\tunrecognized\ttax\tbenefits | 154.8 | 155.2 |
| Other\tnon-current\tliabilities | 386.1 | 439.2 |
| Commitments\tand\tcontingencies\t(Note\t16) |  |  |
| Total\tliabilities | 1,621.4 | 1,975.8 |
| Stockholders'\tequity: |  |  |
|  | 0.7 | 0.7 |
|  | 0.4 | 0.4 |
| Additional\tpaid-in-capital | 1,108.4 | 1,017.6 |
| Retained\tearnings | 2,465.5 | 2,079.3 |
|  | (966.7) | (820.9) |
| Accumulated\tother\tcomprehensive\tincome\t(loss) | 126.8 | 112.6 |
| Total\tstockholders'\tequity | 2,735.1 | 2,389.7 |
| Total\tliabilities\tand\tstockholders'\tequity | $4,356.5 | $4,365.5 |

# CONSOLIDATED	STATEMENTS	OF	OPERATIONS

|  | March	28, | March	29, | March	31, |
| :--- | :--- | :--- | :--- |
|  | 2009 | 2008 | 2007 |
|  |  | (millions,\texcept\tper\tshare\tdata) |  |
| Net\tsales | $4,823.7 | $4,670.7 | $4,059.1 |
| Licensing\trevenue | 195.2 | 209.4 | 236.3 |
| Net\trevenues | 5,018.9 | 4,880.1 | 4,295.4 |
| Cost\tof\tgoods\tsold(a) | (2,288.2) | (2,242.0) | (1,959.2) |
| Gross\tprofit | 2,730.7 | 2,638.1 | 2,336.2 |
| Other\tcosts\tand\texpenses: |  |  |  |
| Selling,\tgeneral\tand\tadministrative\texpenses(a) | (2,036.0) | (1,932.5) | (1,663.4) |
| Amortization\tof\tintangible\tassets | (20.2) | (47.2) | (15.6) |
| Impairments\tof\tassets | (55.4) | (5.0) | — |
| Restructuring\tcharges | (23.6) | — | (4.6) |
| Total\tother\tcosts\tand\texpenses | (2,135.2) | (1,984.7) | (1,683.6) |
| Operating\tincome | 595.5 | 653.4 | 652.6 |
| Foreign\tcurrency\tgains\t(losses) | 1.6 | (6.4) | (1.5) |
| Interest\texpense | (26.6) | (25.7) | (21.6) |
| Interest\tand\tother\tincome,\tnet | 22.0 | 24.7 | 26.1 |
| Equity\tin\tincome\t(loss)\tof\tequity-method\tinvestees | (5.0) | (1.8) | 3.0 |
| Minority\tinterest\texpense | — | (2.1) | (15.3) |
| Income\tbefore\tprovision\tfor\tincome\ttaxes | 587.5 | 642.1 | 643.3 |
| Provision\tfor\tincome\ttaxes | (181.5) | (222.3) | (242.4) |
| Net\tincome | $406.0 | $419.8 | $400.9 |
| Net\tincome\tper\tcommon\tshare: |  |  |  |
| Basic | $4.09 | $4.10 | $3.84 |
| Diluted | $4.01 | $3.99 | $3.73 |
| Weighted\taverage\tcommon\tshares\toutstanding: |  |  |  |
| Basic | 99.2 | 102.3 | 104.4 |
| Diluted | 101.3 | 105.2 | 107.6 |
| Dividends\tdeclared\tper\tshare | $0.20 | $0.20 | $0.20 |
| (a)\tIncludes\ttotal\tdepreciation\texpense\tof: | $(164.2) | $(154.1) | $(129.1) |

See	accompanying	notes.

# CONSOLIDATED	STATEMENTS	OF	CASH	FLOWS

|  | March	28, | March	29, | March	31, |
| :--- | :--- | :--- | :--- |
|  | 2009 | 2008 | 2007 |
|  |  | (millions) |  |
| Cash\tflows\tfrom\toperating\tactivities: |  |  |  |
| Net\tincome | $406.0 | $419.8 | $400.9 |
| Adjustments\tto\treconcile\tnet\tincome\tto\tnet\tcash\tprovided\tby\toperating\tactivities: |  |  |  |
| Depreciation\tand\tamortization\texpense | 184.4 | 201.3 | 144.7 |
| Deferred\tincome\ttax\texpense\t(benefit) | (35.1) | (7.7) | (112.4) |
| Minority\tinterest\texpense | — | 2.1 | 15.3 |
| Equity\tin\tloss\t(income)\tof\tequity-method\tinvestees,\tnet\tof\tdividends\treceived | 5.0 | 1.8 | (1.0) |
| Non-cash\tstock-based\tcompensation\texpense | 49.7 | 70.7 | 43.6 |
| Non-cash\timpairments\tof\tassets | 55.4 | 5.0 | — |
| Non-cash\tprovision\tfor\tbad\tdebt\texpense | 13.9 | 2.6 | 1.9 |
| Loss\ton\tdisposal\tof\tproperty\tand\tequipment | — | — | 3.3 |
| Non-cash\tforeign\tcurrency\t(gains)\tlosses | 2.3 | (1.3) | 6.2 |
| Non-cash\trestructuring\tcharges | 1.6 | — | 1.1 |
| Non-cash\tlitigation-related\tcharges\t(reversals\tof\texcess\treserves) | 5.6 | (4.1) | 3.0 |
| Changes\tin\toperating\tassets\tand\tliabilities: |  |  |  |
| Accounts\treceivable | 1.1 | 10.0 | 26.4 |
| Inventories | (10.5) | 81.8 | (32.2) |
| Accounts\tpayable\tand\taccrued\tliabilities | 55.2 | (10.8) | 38.7 |
| Deferred\tincome\tliabilities | (25.7) | (2.7) | 202.6 |
| Other\tbalance\tsheet\tchanges | 65.3 | (73.1) | 54.0 |
| Net\tcash\tprovided\tby\toperating\tactivities | 774.2 | 695.4 | 796.1 |
| Cash\tflows\tfrom\tinvesting\tactivities: |  |  |  |
| Acquisitions\tand\tventures,\tnet\tof\tcash\tacquired\tand\tpurchase\tprice\tsettlements | (46.3) | (188.7) | (176.1) |
| Purchases\tof\tinvestments | (623.1) | (96.8) | — |
| Proceeds\tfrom\tsales\tand\tmaturities\tof\tinvestments | 369.5 | 12.7 | — |
| Capital\texpenditures | (185.0) | (217.1) | (184.0) |
| Change\tin\trestricted\tcash\tdeposits | 26.9 | (15.1) | (74.5) |
| Net\tcash\tused\tin\tinvesting\tactivities | (458.0) | (505.0) | (434.6) |
| Cash\tflows\tfrom\tfinancing\tactivities: |  |  |  |
| Proceeds\tfrom\tissuance\tof\tdebt | — | 168.9 | 380.0 |
| Repayment\tof\tdebt | (196.8) | — | (291.6) |
| Debt\tissuance\tcosts | — | (0.3) | (2.6) |
| Payments\tof\tcapital\tlease\tobligations | (6.7) | (7.7) | (5.0) |
| Payments\tof\tdividends | (19.9) | (20.5) | (20.9) |
| Distributions\tto\tminority\tinterest\tholders | — | — | (4.5) |
| Repurchases\tof\tcommon\tstock,\tincluding\tshares\tsurrendered\tfor\ttax\twithholdings | (169.8) | (475.4) | (231.3) |
| Proceeds\tfrom\texercise\tof\tstock\toptions | 29.0 | 40.1 | 51.4 |
| Termination\tof\tinterest\trate\tswap\tagreements | — | — | (4.4) |
| Excess\ttax\tbenefits\tfrom\tstock-based\tcompensation\tarrangements | 12.1 | 34.4 | 33.7 |
| Net\tcash\tused\tin\tfinancing\tactivities | (352.1) | (260.5) | (95.2) |
| Effect\tof\texchange\trate\tchanges\ton\tcash\tand\tcash\tequivalents | (34.4) | 57.7 | 11.9 |
| Net\tincrease\t(decrease)\tin\tcash\tand\tcash\tequivalents | (70.3) | (12.4) | 278.2 |
| Cash\tand\tcash\tequivalents\tat\tbeginning\tof\tperiod | 551.5 | 563.9 | 285.7 |
| Cash\tand\tcash\tequivalents\tat\tend\tof\tperiod | $481.2 | $551.5 | $563.9 |

# CONSOLIDATED	STATEMENTS	OF	STOCKHOLDERS'	EQUITY

|  |  |  | Additional |  | Treasury	Stock | Treasury	Stock | Other |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Common\tStock | Common\tStock | Paid-In | Retained | at\tCost | at\tCost | Comprehensive | Unearned |  |
|  | Shares | Amount | Capital | Earnings | Shares | Amount | Income\t(Loss) | Compensation | Total |
|  |  |  |  |  | (millions) | (millions) |  |  |  |
| Balance\tat\tApril\t1,\t2006 | 109.7 | $1.1 | $783.6 | $1,379.2 | 4.3 | $(87.1) | $15.5 | $(42.7) | $2,049.6 |
| Cumulative\teffect\tof\tadopting\tSAB\t108(a)\t(Note\t4) |  |  |  | (16.9) |  |  |  |  | (16.9) |
| Cumulative\teffect\tof\tadopting\tFAS\t123R\t(Note\t4) |  |  | (42.7) |  |  |  |  | 42.7 | — |
| Comprehensive\tincome: |  |  |  |  |  |  |  |  |  |
| Net\tincome |  |  |  | 400.9 |  |  |  |  |  |
| Foreign\tcurrency\ttranslation\tadjustments |  |  |  |  |  |  | 54.3 |  |  |
| Net\trealized\tand\tunrealized\tlosses\ton\tderivative\tfinancial\tinstruments |  |  |  |  |  |  | (29.3) |  |  |
| Total\tcomprehensive\tincome |  |  |  |  |  |  |  |  | 425.9 |
| Cash\tdividends\tdeclared |  |  |  | (20.9) |  |  |  |  | (20.9) |
| Repurchases\tof\tcommon\tstock |  |  |  |  | 3.5 | (231.3) |  |  | (231.3) |
| Shares\tissued\tand\tequity\tgrants\tmade\tpursuant\tto\tstock\tcompensation\tplans(b) | 2.2 |  | 131.6 |  | 0.1 | (3.1) |  |  | 128.5 |
| Balance\tat\tMarch\t31,\t2007 | 111.9 | $1.1 | $872.5 | $1,742.3 | 7.9 | $(321.5) | $40.5 | $— | $2,334.9 |
| Cumulative\teffect\tof\tadopting\tFIN\t48\t(Note\t13) |  |  |  | (62.5) |  |  |  |  | (62.5) |
| Comprehensive\tincome: |  |  |  |  |  |  |  |  |  |
| Net\tincome |  |  |  | 419.8 |  |  |  |  |  |
| Foreign\tcurrency\ttranslation\tadjustments |  |  |  |  |  |  | 135.8 |  |  |
| Net\trealized\tand\tunrealized\tlosses\ton\tderivative\tfinancial\tinstruments |  |  |  |  |  |  | (63.3) |  |  |
| Net\tunrealized\tlosses\ton\tavailable-for-sale\tinvestments |  |  |  |  |  |  | (0.2) |  |  |
| Net\tunrealized\tlosses\ton\tdefined\tbenefit\tplans |  |  |  |  |  |  | (0.2) |  |  |
| Total\tcomprehensive\tincome |  |  |  |  |  |  |  |  | 491.9 |
| Cash\tdividends\tdeclared |  |  |  | (20.3) |  |  |  |  | (20.3) |
| Repurchases\tof\tcommon\tstock |  |  |  |  | 6.4 | (499.4) |  |  | (499.4) |
| Shares\tissued\tand\tequity\tgrants\tmade\tpursuant\tto\tstock\tcompensation\tplans(b) | 1.9 |  | 145.1 |  |  |  |  |  | 145.1 |
| Balance\tat\tMarch\t29,\t2008 | 113.8 | $1.1 | $1,017.6 | $2,079.3 | 14.3 | $(820.9) | $112.6 | $— | $2,389.7 |
| Comprehensive\tincome: |  |  |  |  |  |  |  |  |  |
| Net\tincome |  |  |  | 406.0 |  |  |  |  |  |
| Foreign\tcurrency\ttranslation\tadjustments |  |  |  |  |  |  | (69.7) |  |  |
| Net\trealized\tand\tunrealized\tgains\ton\tderivative\tfinancial\tinstruments |  |  |  |  |  |  | 84.1 |  |  |
| Net\tunrealized\tgains\ton\tavailable-for-sale\tinvestments |  |  |  |  |  |  | 0.3 |  |  |
| Net\tunrealized\tlosses\ton\tdefined\tbenefit\tplans |  |  |  |  |  |  | (0.5) |  |  |
| Total\tcomprehensive\tincome |  |  |  |  |  |  |  |  | 420.2 |
| Cash\tdividends\tdeclared |  |  |  | (19.8) |  |  |  |  | (19.8) |
| Repurchases\tof\tcommon\tstock |  |  |  |  | 2.1 | (145.8) |  |  | (145.8) |
| Shares\tissued\tand\tequity\tgrants\tmade\tpursuant\tto\tstock\tcompensation\tplans(b) | 1.8 |  | 90.8 |  |  |  |  |  | 90.8 |
| Balance\tat\tMarch\t28,\t2009 | 115.6 | $1.1 | $1,108.4 | $2,465.5 | 16.4 | $(966.7) | $126.8 | $— | $2,735.1 |

(b) Includes	income	tax	benefits	relating	to	the	exercise	of	employee	stock	options	of	approximately	$12	million	in	Fiscal	2009,	$34	million	in	Fiscal	2008	and	$33	million	in	Fiscal	2007.

# NOTES	TO	CONSOLIDATED	FINANCIAL	STATEMENTS

# 1. Description	of	Business

Polo	Ralph	Lauren	Corporation	("PRLC")	is	a	global	leader	in	the	design,	marketing	and	distribution	of	premium	lifestyle	products,	including	men's,	women's	and	children's	apparel,	accessories, fragrances	and	home	furnishings.	PRLC's	long-standing	reputation	and	distinctive	image	have	been	consistently	developed	across	an	expanding	number	of	products,	brands	and	international	markets. PRLC's	brand	names	include	Polo	by	Ralph	Lauren,	Ralph	Lauren	Purple	Label,	Ralph	Lauren	Collection,	Black	Label,	Blue	Label,	Lauren	by	Ralph	Lauren,	RRL,	RLX,	Rugby,	Ralph	Lauren Childrenswear,	American	Living,	Chaps	and	Club	Monaco,	among	others.	PRLC	and	its	subsidiaries	are	collectively	referred	to	herein	as	the	"Company,"	"we,"	"us,"	"our"	and	"ourselves,"	unless	the context	indicates	otherwise.

The	Company	classifies	its	businesses	into	three	segments:	Wholesale,	Retail	and	Licensing.	The	Company's	wholesale	sales	are	made	principally	to	major	department	and	specialty	stores	located throughout	the	U.S.,	Europe	and	Asia.	The	Company	also	sells	directly	to	consumers	through	full-price	and	factory	retail	stores	located	throughout	the	U.S.,	Canada,	Europe,	South	America	and	Asia, and	through	its	retail	internet	sites	located	at	www.RalphLauren.com	and	www.Rugby.com.	In	addition,	the	Company	often	licenses	the	right	to	unrelated	third	parties	to	use	its	various	trademarks	in connection	with	the	manufacture	and	sale	of	designated	products,	such	as	apparel,	eyewear	and	fragrances,	in	specified	geographical	areas	for	specified	periods.

# 2. Basis	of	Presentation

# Basis	of	Consolidation

The	consolidated	financial	statements	present	the	financial	position,	results	of	operations	and	cash	flows	of	the	Company	and	all	entities	in	which	the	Company	has	a	controlling	voting	interest. The	consolidated	financial	statements	also	include	the	accounts	of	any	variable	interest	entities	in	which	the	Company	is	considered	to	be	the	primary	beneficiary	and	such	entities	are	required	to	be consolidated	in	accordance	with	accounting	principles	generally	accepted	in	the	U.S.	("US	GAAP").

Prior	to	the	Company's	acquisition	of	the	minority	ownership	interest	in	Polo	Ralph	Lauren	Japan	Corporation	("PRL	Japan")	in	May	2007,	the	Company	consolidated	PRL	Japan,	formerly	a 50%-owned	venture	with	Onward	Kashiyama	Co.	Ltd	and	its	affiliates	("Onward	Kashiyama")	and	The	Seibu	Department	Stores,	Ltd	("Seibu"),	pursuant	to	the	provisions	of	Financial	Accounting Standards	Board	("FASB")	Interpretation	("FIN")	No.	46R,	"Consolidation	of	Variable	Interest	Entities"	("FIN	46R").	PRL	Japan	holds	the	master	license	to	conduct	the	Company's	business	in	Japan. Additionally,	prior	to	the	acquisition	of	the	minority	ownership	interests	in	Ralph	Lauren	Media,	LLC	("RL	Media")	in	March	2007,	the	Company	consolidated	RL	Media,	formerly	a	50%-owned venture	with	NBC-Lauren	Media	Holdings,	Inc.,	a	subsidiary	wholly	owned	by	the	National	Broadcasting	Company,	Inc.	("NBC")	and	Value	Vision	Media,	Inc.	("Value	Vision"),	pursuant	to	FIN	46R. RL	Media	conducts	the	Company's	e-commerce	initiatives	through	RalphLauren.com	and	Rugby.com.	See	Note	5	for	further	discussion	of	the	acquisitions	referred	to	above,	including	their	respective bases	of	consolidation	in	the	fiscal	years	presented.

All	significant	intercompany	balances	and	transactions	have	been	eliminated	in	consolidation.

# Fiscal	Year

The	financial	position	and	operating	results	of	the	Company's	consolidated	PRL	Japan	and	Impact	21	Co.,	Ltd.	("Impact	21")	entities	located	in	Japan	are	reported	on	a	one-month	lag. Accordingly,	the	Company's	operating

# NOTES	TO	CONSOLIDATED	FINANCIAL	STATEMENTS	—	(Continued)

results	for	Fiscal	2009	and	Fiscal	2008	include	the	operating	results	of	PRL	Japan	and	Impact	21	for	the	twelve-month	periods	ended	February	28,	2009	and	February	29,	2008,	respectively,	and	the Company's	operating	results	for	Fiscal	2007	include	the	operating	results	of	PRL	Japan	for	the	twelve-month	period	ended	February	28,	2007.	The	net	effect	of	this	reporting	lag	is	not	material	to	the consolidated	financial	statements.

# Use	of	Estimates

The	preparation	of	financial	statements	in	conformity	with	US	GAAP	requires	management	to	make	estimates	and	assumptions	that	affect	the	amounts	reported	in	the	financial	statements	and footnotes	thereto.	Actual	results	could	differ	materially	from	those	estimates.

Significant	estimates	inherent	in	the	preparation	of	the	consolidated	financial	statements	include	reserves	for	customer	returns,	discounts,	end-of-season	markdowns	and	operational	chargebacks; the	realizability	of	inventory;	reserves	for	litigation	and	other	contingencies;	useful	lives	and	impairments	of	long-lived	tangible	and	intangible	assets;	accounting	for	income	taxes	and	related	uncertain tax	positions;	the	valuation	of	stock-based	compensation	and	related	expected	forfeiture	rates;	reserves	for	restructuring;	and	accounting	for	business	combinations.

# Reclassifications

Certain	reclassifications	have	been	made	to	the	prior	years'	financial	information	in	order	to	conform	to	the	current	year's	presentation.

# 3. Summary	of	Significant	Accounting	Policies

# Revenue	Recognition

Revenue	is	recognized	across	all	segments	of	the	business	when	there	is	persuasive	evidence	of	an	arrangement,	delivery	has	occurred,	price	has	been	fixed	or	is	determinable,	and	collectibility	is reasonably	assured.

Revenue	within	the	Company's	Wholesale	segment	is	recognized	at	the	time	title	passes	and	risk	of	loss	is	transferred	to	customers.	Wholesale	revenue	is	recorded	net	of	estimates	of	returns, discounts,	end-of-season	markdowns,	operational	chargebacks	and	certain	cooperative	advertising	allowances.	Returns	and	allowances	require	pre-approval	from	management	and	discounts	are	based	on trade	terms.	Estimates	for	end-of-season	markdown	reserves	are	based	on	historical	trends,	seasonal	results,	an	evaluation	of	current	economic	and	market	conditions	and	retailer	performance.	Estimates for	operational	chargebacks	are	based	on	actual	notifications	of	order	fulfillment	discrepancies	and	historical	trends.	The	Company	reviews	and	refines	these	estimates	on	a	quarterly	basis.	The Company's	historical	estimates	of	these	costs	have	not	differed	materially	from	actual	results.

Retail	store	revenue	is	recognized	net	of	estimated	returns	at	the	time	of	sale	to	consumers.	E-commerce	revenue	from	sales	of	products	ordered	through	the	Company's	retail	internet	sites	at RalphLauren.com	and	Rugby.com	is	recognized	upon	delivery	and	receipt	of	the	shipment	by	its	customers.	Such	revenue	also	is	reduced	by	an	estimate	of	returns.

Gift	cards	issued	by	the	Company	are	recorded	as	a	liability	until	they	are	redeemed,	at	which	point	revenue	is	recognized.	The	Company	recognizes	income	for	unredeemed	gift	cards	when	the likelihood	of	a	gift	card	being	redeemed	by	a	customer	is	remote	and	the	Company	determines	that	it	does	not	have	a	legal	obligation	to	remit	the	value	of	the	unredeemed	gift	card	to	the	relevant jurisdiction	as	unclaimed	or	abandoned	property.

Revenue	from	licensing	arrangements	is	recognized	when	earned	in	accordance	with	the	terms	of	the	underlying	agreements,	generally	based	upon	the	higher	of	(a)	contractually	guaranteed minimum	royalty	levels	or	(b)	actual	sales	and	royalty	data,	or	estimates	thereof,	received	from	the	Company's	licensees.

The	Company	accounts	for	sales	and	other	related	taxes	on	a	net	basis,	excluding	such	taxes	from	revenue.

# Cost	of	Goods	Sold	and	Selling	Expenses

Cost	of	goods	sold	includes	the	expenses	incurred	to	acquire	and	produce	inventory	for	sale,	including	product	costs,	freight-in	and	import	costs,	as	well	as	changes	in	reserves	for	shrinkage	and inventory	realizability.	Gains	and	losses	associated	with	foreign	currency	exchange	contracts	related	to	the	hedging	of	inventory	purchases	also	are	recognized	within	cost	of	goods	sold	when	the inventory	being	hedged	is	sold.	The	costs	of	selling	merchandise,	including	those	associated	with	preparing	the	merchandise	for	sale,	such	as	picking,	packing,	warehousing	and	order	charges,	are included	in	selling,	general	and	administrative	("SG&A")	expenses.

# Shipping	and	Handling	Costs

The	costs	associated	with	shipping	goods	to	customers	are	reflected	as	a	component	of	SG&A	expenses	in	the	consolidated	statements	of	operations.	Shipping	and	handling	costs	incurred approximated	$95	million	in	Fiscal	2009,	$108	million	in	Fiscal	2008	and	$92	million	in	Fiscal	2007.	Shipping	and	handling	charges	billed	to	customers	are	included	in	revenue.

# Advertising	Costs

In	accordance	with	American	Institute	of	Certified	Public	Accountants	("AICPA")	Statement	of	Position	("SOP")	No.	93-7,	"Reporting	on	Advertising	Costs,"	advertising	costs,	including	the costs	to	produce	advertising,	are	expensed	when	the	advertisement	is	first	exhibited.	In	accordance	with	Emerging	Issues	Task	Force	("EITF")	Issue	No.	01-09,	"Accounting	for	Consideration	Given	by	a Vendor	to	a	Customer	or	a	Reseller	of	the	Vendor's	Products,"	costs	of	out-of-store	advertising	paid	to	wholesale	customers	under	cooperative	advertising	programs	are	expensed	as	an	advertising	cost	if both	the	identified	advertising	benefit	is	sufficiently	separable	from	the	purchase	of	the	Company's	products	by	customers	and	the	fair	value	of	such	benefit	is	measurable.	Otherwise,	such	costs	are reflected	as	a	reduction	of	revenue.	Costs	of	in-store	advertising	paid	to	wholesale	customers	under	cooperative	advertising	programs	are	not	included	in	advertising	costs,	but	are	reflected	as	a	reduction of	revenues	since	the	benefits	are	not	sufficiently	separable	from	the	purchases	of	the	Company's	products	by	customers.

Advertising	expense	amounted	to	approximately	$171	million	for	Fiscal	2009,	$188	million	for	Fiscal	2008	and	$181	million	for	Fiscal	2007.	Deferred	advertising	costs,	which	principally	relate to	advertisements	that	have	not	yet	been	exhibited	or	services	that	have	not	yet	been	received,	were	approximately	$6	million	and	$8	million	at	the	end	of	Fiscal	2009	and	Fiscal	2008,	respectively.

# Foreign	Currency	Translation	and	Transactions

The	financial	position	and	operating	results	of	foreign	operations	are	primarily	consolidated	using	the	local	currency	as	the	functional	currency.	Local	currency	assets	and	liabilities	are	translated at	the	rates	of	exchange	on	the	balance	sheet	date,	and	local	currency	revenue	and	expenses	are	translated	at	average	rates	of	exchange	during	the	period.	Resulting	translation	gains	or	losses	are	included in	the	consolidated	statements	of	stockholders'	equity	as	a	component	of	accumulated	other	comprehensive	income	(loss).	Gains	and	losses	on	translation	of	intercompany	loans	with	foreign	subsidiaries of	a	long-term	investment	nature	also	are	included	within	this	component	of	stockholders'	equity.

The	Company	also	recognizes	gains	and	losses	on	transactions	that	are	denominated	in	a	currency	other	than	the	respective	entity's	functional	currency.	Foreign	currency	transaction	gains	and losses	also	include	amounts	realized	on	the	settlement	of	intercompany	loans	with	foreign	subsidiaries	that	are	either	of	a	short-term	investment	nature	or	were	previously	of	a	long-term	investment nature	and	deferred	as	a	component	of	stockholders'	equity.	Foreign	currency	transaction	gains	and	losses	are	recognized	in	earnings	and	separately	disclosed	in	the	consolidated	statements	of	operations.

# Comprehensive	Income	(Loss)

Comprehensive	income	(loss),	which	is	reported	in	the	consolidated	statements	of	stockholders'	equity,	consists	of	net	income	(loss)	and	other	gains	and	losses	affecting	equity	that,	under	US GAAP,	are	excluded	from	net	income	(loss).	The	components	of	other	comprehensive	income	(loss)	for	the	Company	primarily	consist	of	foreign	currency	translation	gains	and	losses;	unrealized	gains and	losses	on	available-for-sale	investments;	unrealized	gains	and	losses	related	to	the	accounting	for	defined	benefit	plans;	and	deferred	gains	and	losses	on	hedging	instruments,	such	as	forward	foreign currency	exchange	contracts	designated	as	cash	flow	hedges	and	changes	in	the	fair	value	of	the	Company's	Euro-denominated	debt	designated	as	a	hedge	of	changes	in	the	fair	value	of	the	Company's net	investment	in	certain	of	its	European	subsidiaries.

# Net	Income	Per	Common	Share

Net	income	per	common	share	is	determined	in	accordance	with	Statement	of	Financial	Accounting	Standards	("FAS")	No.	128,	"Earnings	per	Share"	("FAS	128").	Under	the	provisions	of FAS	128,	basic	net	income	per	common	share	is	computed	by	dividing	the	net	income	applicable	to	common	shares	after	preferred	dividend	requirements,	if	any,	by	the	weighted-average	number	of common	shares	outstanding	during	the	period.	Weighted-average	common	shares	include	shares	of	the	Company's	Class	A	and	Class	B	common	stock.	Diluted	net	income	per	common	share	adjusts basic	net	income	per	common	share	for	the	effects	of	outstanding	stock	options,	restricted	stock,	restricted	stock	units	and	any	other	potentially	dilutive	financial	instruments,	only	in	the	periods	in	which such	effect	is	dilutive	under	the	treasury	stock	method.

The	weighted-average	number	of	common	shares	outstanding	used	to	calculate	basic	net	income	per	common	share	is	reconciled	to	those	shares	used	in	calculating	diluted	net	income	per common	share	as	follows:

|  | March	28, | March	29, | March	31, |
| :--- | :--- | :--- | :--- |
|  | 2009 | 2008 | 2007 |
|  |  | (millions) |  |
| Basic | 99.2 | 102.3 | 104.4 |
| Dilutive\teffect\tof\tstock\toptions,\trestricted\tstock\tand\trestricted\tstock\tunits | 2.1 | 2.9 | 3.2 |
| Diluted\tshares | 101.3 | 105.2 | 107.6 |

Options	to	purchase	shares	of	common	stock	at	an	exercise	price	greater	than	the	average	market	price	of	the	common	stock	during	the	reporting	period	are	anti-dilutive	and	therefore	not included	in	the	computation	of	diluted	net	income	per	common	share.	In	addition,	the	Company	has	outstanding	restricted	stock	units	that	are	issuable	only	upon	the	achievement	of	certain	service	and/or performance	goals.	Such	performance-based	restricted	stock	units	are	included	in	the	computation	of	diluted	shares	only	to	the	extent	the	underlying	performance	conditions	(a)	are	satisfied	prior	to	the end	of	the	reporting	period	or	(b)	would	be	satisfied	if	the	end	of	the	reporting	period	were	the	end	of	the	related	contingency	period	and	the	result	would	be	dilutive	under	the	treasury	stock	method.	As of	the	end	of	Fiscal	2009,	Fiscal	2008	and	Fiscal	2007,	there	was	an	aggregate	of	approximately	3.5	million,	1.5	million	and	1.0	million,	respectively,	of	additional	shares	issuable	upon	the	exercise	of anti-dilutive	options	and/or	the	contingent	vesting	of	performance-based	restricted	stock	units	that	were	excluded	from	the	diluted	share	calculations.

The	Company	accounts	for	stock-based	compensation	arrangements	in	accordance	with	FAS	No.	123R,	"Share-Based	Payment"	("FAS	123R"),	which	requires	all	share-based	payments	to employees	and	non-employee	directors	to	be	expensed	based	on	the	grant	date	fair	value	of	the	awards	over	the	requisite	service	period,	adjusted

for	estimated	forfeitures.	The	Company	uses	the	Black-Scholes	valuation	method	to	determine	the	grant	date	fair	value	of	its	stock	option	awards.

See	Note	19	for	further	discussion	of	the	Company's	stock-based	compensation.

# Cash	and	Cash	Equivalents

Cash	and	cash	equivalents	include	all	highly	liquid	investments	with	original	maturities	of	three	months	or	less,	including	investments	in	debt	securities.	Investments	in	debt	securities	are diversified	among	high-credit	quality	securities	in	accordance	with	the	Company's	risk-management	policies,	and	primarily	include	commercial	paper	and	money	market	funds.

# Restricted	Cash

From	time	to	time,	the	Company	is	required	to	place	cash	in	escrow	with	various	banks	as	collateral,	primarily	to	secure	guarantees	of	corresponding	amounts	made	by	the	banks	to	international tax	authorities	on	behalf	of	the	Company,	such	as	to	secure	refunds	of	value-added	tax	payments	in	certain	international	tax	jurisdictions	or	in	the	case	of	certain	international	tax	audits.	As	of	March	28, 2009	and	March	29,	2008,	the	Company	had	approximately	$72	million	and	$110	million	of	cash	held	in	escrow,	respectively.	Such	cash	has	been	classified	as	restricted	cash	and	reported	as	a component	of	other	non-current	assets	in	the	Company's	consolidated	balance	sheets.

# Short-term	Investments

Short-term	investments	consist	of	investments	which	the	Company	expects	to	convert	into	cash	within	one	year,	including	time	deposits	which	have	a	maturity	greater	than	three	months.	Short- term	investments	are	reported	at	cost,	which	approximates	market	value.	Cash	inflows	and	outflows	related	to	the	sale	and	purchase	of	short-term	investments	are	classified	as	investing	activities	within the	Company's	consolidated	statements	of	cash	flows.

# Accounts	Receivable

In	the	normal	course	of	business,	the	Company	extends	credit	to	customers	that	satisfy	defined	credit	criteria.	Accounts	receivable,	net,	as	shown	in	the	Company's	consolidated	balance	sheets,	is net	of	certain	reserves	and	allowances.	These	reserves	and	allowances	consist	of	(a)	reserves	for	returns,	discounts,	end-of-season	markdowns	and	operational	chargebacks	and	(b)	allowances	for	doubtful accounts.	These	reserves	and	allowances	are	discussed	in	further	detail	below.

A	reserve	for	sales	returns	is	determined	based	on	an	evaluation	of	current	market	conditions	and	historical	returns	experience.	Charges	to	increase	the	reserve	are	treated	as	reductions	of	revenue.

A	reserve	for	trade	discounts	is	determined	based	on	open	invoices	where	trade	discounts	have	been	extended	to	customers,	and	charges	to	increase	the	reserve	are	treated	as	reductions	of revenue.

Estimated	end-of-season	markdown	charges	are	included	as	reductions	of	revenue.	The	related	markdown	provisions	are	based	on	retail	sales	performance,	seasonal	negotiations	with	customers, historical	deduction	trends	and	an	evaluation	of	current	market	conditions.

A	reserve	for	operational	chargebacks	represents	various	deductions	by	customers	relating	to	individual	shipments.	Charges	to	increase	this	reserve,	net	of	expected	recoveries,	are	included	as reductions	of	revenue.	The	reserve	is	based	on	actual	notifications	of	order	fulfillment	discrepancies	and	past	experience.

A	rollforward	of	the	activity	in	the	Company's	reserves	for	returns,	discounts,	end-of-season	markdowns	and	operational	chargebacks	is	presented	below:

|  | March	28, | March	29, | March	31, |
| :--- | :--- | :--- | :--- |
|  | 2009 | 2008 | 2007 |
|  |  | (millions) |  |
| Beginning\treserve\tbalance | $161.1 | $129.4 | $107.5 |
| Amount\tcharged\tagainst\trevenue\tto\tincrease\treserve | 480.2 | 496.7 | 388.4 |
| Amount\tcredited\tagainst\tcustomer\taccounts\tto\tdecrease\treserve | (461.0) | (473.4) | (369.2) |
| Foreign\tcurrency\ttranslation | (9.9) | 8.4 | 2.7 |
| Ending\treserve\tbalance | $170.4 | $161.1 | $129.4 |

An	allowance	for	doubtful	accounts	is	determined	through	analysis	of	periodic	aging	of	accounts	receivable,	assessments	of	collectibility	based	on	an	evaluation	of	historic	and	anticipated	trends, the	financial	condition	of	the	Company's	customers,	and	an	evaluation	of	the	impact	of	economic	conditions.	A	rollforward	of	the	activity	in	the	Company's	allowance	for	doubtful	accounts	is	presented below:

| below: |  |  |  |
| :--- | :--- | :--- | :--- |
|  | March\t28,\n2009 | Fiscal\tYears\tEnded\nMarch\t29,\n2008\n(millions) | March\t31,\n2007 |
| Beginning\treserve\tbalance | $10.9 | $8.7 | $7.5 |
| Amount\tcharged\tto\texpense\tto\tincrease\treserve | 13.9 | 2.6 | 1.9 |
| Amount\twritten\toff\tagainst\tcustomer\taccounts\tto\tdecrease\treserve | (3.0) | (1.6) | (1.2) |
| Foreign\tcurrency\ttranslation | (1.3) | 1.2 | 0.5 |
| Ending\treserve\tbalance | $20.5 | $10.9 | $8.7 |

# Concentration	of	Credit	Risk

The	Company	sells	its	wholesale	merchandise	primarily	to	major	department	and	specialty	stores	across	the	U.S.,	Europe	and	Asia	and	extends	credit	based	on	an	evaluation	of	each	customer's financial	condition,	usually	without	requiring	collateral.	In	its	wholesale	business,	concentration	of	credit	risk	is	relatively	limited	due	to	the	large	number	of	customers	and	their	dispersion	across	many geographic	areas.	However,	the	Company	has	seven	key	department-store	customers	that	generate	significant	sales	volume.	For	Fiscal	2009,	these	customers	in	the	aggregate	contributed	approximately 50%	of	all	wholesale	revenues.	Further,	as	of	March	28,	2009,	the	Company's	seven	key	department-store	customers	represented	approximately	40%	of	gross	accounts	receivable.

The	Company	continually	evaluates	the	composition	of	its	inventories,	assessing	slow-turning	product	and	all	fashion	product.	Estimated	realizable	value	of	inventory	is	determined	based	on	an analysis	of	historical	sales	trends	of	the	Company's	individual	product	lines,	the	impact	of	market	trends	and	economic	conditions,	and	the	value	of	current	orders	in-house	relating	to	future	sales	of inventory.	Estimates	may	differ	from	actual	results	due	to	quantity,

quality	and	mix	of	products	in	inventory,	consumer	and	retailer	preferences	and	market	conditions.	The	Company's	historical	estimates	of	these	costs	and	its	provisions	have	not	differed	materially	from actual	results.

# Investments

Investments	in	companies	in	which	the	Company	has	significant	influence,	but	less	than	a	controlling	voting	interest,	are	accounted	for	using	the	equity	method.	This	is	generally	presumed	to exist	when	the	Company	owns	between	20%	and	50%	of	the	investee.	However,	as	a	matter	of	policy,	if	the	Company	had	a	greater	than	50%	ownership	interest	in	an	investee	and	the	minority shareholders	held	certain	rights	that	allowed	them	to	participate	in	the	day-to-day	operations	of	the	business,	the	Company	would	also	generally	use	the	equity	method	of	accounting.

Under	the	equity	method,	only	the	Company's	investment	in	and	amounts	due	to	and	from	the	equity	investee	are	included	in	the	consolidated	balance	sheets;	only	the	Company's	share	of	the investee's	earnings	(losses)	is	included	in	the	consolidated	operating	results;	and	only	the	dividends,	cash	distributions,	loans	or	other	cash	received	from	the	investee	and	additional	cash	investments, loan	repayments	or	other	cash	paid	to	the	investee	are	included	in	the	consolidated	cash	flows.

Investments	in	companies	in	which	the	Company	does	not	have	a	controlling	interest,	or	is	unable	to	exert	significant	influence,	are	accounted	for	as	available-for-sale	investments	and,	if	the investments	are	publicly	traded	and	there	are	no	resale	restrictions	greater	than	one	year,	recorded	at	fair	value.	If	resale	restrictions	greater	than	one	year	exist,	or	if	the	investment	is	not	publicly	traded, the	investment	is	accounted	for	at	cost.

The	Company	evaluates	investments	held	in	unrealized	loss	positions	for	other-than-temporary	impairment	on	a	quarterly	basis.	Such	evaluation	involves	a	variety	of	considerations,	including assessments	of	risks	and	uncertainties	associated	with	general	economic	conditions	and	distinct	conditions	affecting	specific	issuers.	Factors	considered	by	the	Company	include	(i)	the	length	of	time	and the	extent	to	which	the	fair	value	has	been	below	cost,	(ii)	the	financial	condition,	credit	worthiness	and	near-term	prospects	of	the	issuer,	(iii)	the	length	of	time	to	maturity,	(iv)	future	economic conditions	and	market	forecasts	and	(v)	the	Company's	intent	and	ability	to	retain	its	investment	for	a	period	of	time	sufficient	to	allow	for	recovery	of	market	value.	The	Company	has	not	recognized	any significant	other-than-temporary	impairment	charges	in	any	of	the	fiscal	years	presented.

# Equity-method	Investments

The	Company's	investments	include	a	joint	venture	named	the	Ralph	Lauren	Watch	and	Jewelry	Company,	S.A.R.L.	(the	"RL	Watch	Company"),	formed	with	Financiere	Richemont	SA ("Richemont"),	the	Swiss	Luxury	Goods	Group,	in	March	2007.	The	joint	venture	is	a	Swiss	corporation,	whose	purpose	is	to	design,	develop,	manufacture,	sell	and	distribute	luxury	watches	and	fine jewelry	through	Ralph	Lauren	boutiques,	as	well	as	through	fine	independent	jewelry	and	luxury	watch	retailers	throughout	the	world.	The	Company	accounts	for	its	50%	interest	in	the	RL	Watch Company	under	the	equity	method	of	accounting,	and	such	investment	is	classified	in	other	non-current	assets	in	the	consolidated	balance	sheets.	Royalty	payments	due	to	the	Company	under	the	related license	agreement	for	use	of	certain	of	the	Company's	trademarks	will	be	reflected	as	licensing	revenue	within	the	consolidated	statement	of	operations.	The	RL	Watch	Company	commenced	operations during	the	first	quarter	of	Fiscal	2008	and	products	were	introduced	in	January	2009.

# Available-for-sale	Investments

Investments	also	consisted	of	auction	rate	securities	at	a	fair	value	of	$2.3	million	as	of	March	28,	2009	and	$14.5	million	as	of	March	29,	2008.	Auction	rate	securities	have	characteristics similar	to	short-term	investments	because,	at	pre-determined	short-term	intervals,	there	is	a	new	auction	process	at	which	the	interest	rates	for	these	securities	are	reset	to	current	interest	rates.	At	the	end of	such	periods,	the	Company	chooses	to	either	roll	over	its

holdings	or	seeks	to	redeem	the	investments	for	cash.	Notwithstanding	these	short-term	characteristics,	the	Company	has	classified	these	securities	as	non-current	within	other	assets	in	its	consolidated balance	sheet	as	current	market	conditions	call	into	question	its	ability	to	redeem	these	investments	for	cash	within	the	next	twelve	months.	Auction	rate	securities	are	categorized	as	available-for-sale investments	and	are	stated	at	fair	value.	Unrealized	gains	or	losses	are	classified	as	a	component	of	accumulated	other	comprehensive	income	(loss)	in	the	Company's	consolidated	balance	sheets,	and related	realized	gains	or	losses	are	classified	as	a	component	of	interest	and	other	income,	net,	in	the	Company's	consolidated	statements	of	operations.	Cash	inflows	and	outflows	related	to	the	sale	and purchase	of	investments	are	classified	as	investing	activities	in	the	Company's	consolidated	statements	of	cash	flows.

# Property	and	Equipment,	Net

Property	and	equipment,	net,	is	stated	at	cost	less	accumulated	depreciation.	Depreciation	is	calculated	using	the	straight-line	method	based	upon	the	estimated	useful	lives	of	depreciable	assets, which	range	from	three	to	seven	years	for	furniture,	fixtures,	computer	software	and	computer	equipment;	from	three	to	ten	years	for	machinery	and	equipment;	and	from	ten	to	forty	years	for	buildings and	improvements.	Leasehold	improvements	are	depreciated	over	the	shorter	of	the	estimated	useful	lives	of	the	respective	assets	or	the	life	of	the	lease.

Property	and	equipment,	along	with	other	long-lived	assets,	are	evaluated	for	impairment	periodically	whenever	events	or	changes	in	circumstances	indicate	that	their	related	carrying	amounts may	not	be	recoverable	in	accordance	with	FAS	No.	144,	"Accounting	for	the	Impairment	or	Disposal	of	Long-Lived	Assets"	("FAS	144").	In	evaluating	long-lived	assets	for	recoverability,	including finite-lived	intangibles	as	described	below,	the	Company	uses	its	best	estimate	of	future	cash	flows	expected	to	result	from	the	use	of	the	asset	and	its	eventual	disposition.	To	the	extent	that	estimated future	undiscounted	net	cash	flows	attributable	to	the	asset	are	less	than	the	carrying	amount,	an	impairment	loss	is	recognized	equal	to	the	difference	between	the	carrying	value	of	such	asset	and	its	fair value.	Assets	to	be	disposed	of	and	for	which	there	is	a	committed	plan	of	disposal	are	reported	at	the	lower	of	carrying	value	or	fair	value	less	costs	to	sell.

# Goodwill	and	Other	Intangible	Assets

Goodwill	and	other	intangible	assets	are	accounted	for	in	accordance	with	the	provisions	of	FAS	No.	142,	"Goodwill	and	Other	Intangible	Assets"	("FAS	142").	At	acquisition,	the	Company estimates	and	records	the	fair	value	of	purchased	intangible	assets,	which	primarily	consist	of	license	agreements,	customer	relationships,	non-compete	agreements	and	order	backlog.	The	fair	value	of these	intangible	assets	is	estimated	based	on	management's	assessment,	considering	independent	third	party	appraisals,	when	necessary.	The	excess	of	the	purchase	consideration	over	the	fair	value	of	net assets	acquired	is	recorded	as	goodwill.	Under	FAS	142,	goodwill,	including	any	goodwill	included	in	the	carrying	value	of	investments	accounted	for	using	the	equity	method	of	accounting,	and	certain other	intangible	assets	deemed	to	have	indefinite	useful	lives	are	not	amortized.	Rather,	goodwill	and	such	indefinite-lived	intangible	assets	are	assessed	for	impairment	at	least	annually	based	on comparisons	of	their	respective	fair	values	to	their	carrying	values.	Finite-lived	intangible	assets	are	amortized	over	their	respective	estimated	useful	lives	and,	along	with	other	long-lived	assets	as	noted above,	are	evaluated	for	impairment	periodically	whenever	events	or	changes	in	circumstances	indicate	that	their	related	carrying	amounts	may	not	be	recoverable	in	accordance	with	FAS	144.	See discussion	of	the	Company's	accounting	policy	for	long-lived	asset	impairment	as	described	earlier	under	the	caption	"Property	and	Equipment,	Net."

# Officers'	Life	Insurance	Policies

The	Company	maintains	several	whole-life	and	certain	split-dollar	life	insurance	policies	for	select	senior	executives.	Whole-life	policies	are	recorded	at	their	cash-surrender	value,	and	split- dollar	policies	are	recorded	at	the	lesser	of	their	cash-surrender	value	or	aggregate	premiums	paid-to-date	in	the	consolidated	balance	sheets.	As	of	the	end	of	Fiscal	2009	and	Fiscal	2008,	amounts	of approximately	$33	million	and	$48	million,	respectively,

relating	to	officers'	life	insurance	policies	held	by	the	Company	were	classified	within	other	non-current	assets	in	the	consolidated	balance	sheets.

In	May	2009,	the	Company	liquidated	all	of	its	whole-life	insurance	policies	held	at	cash-surrender	value.	As	of	the	end	of	Fiscal	2009,	the	related	asset	balance	of	approximately	$16	million	was classified	within	short-term	investments	in	the	consolidated	balance	sheet.

Income	taxes	are	provided	using	the	asset	and	liability	method	prescribed	by	FAS	No.	109,	"Accounting	for	Income	Taxes"	("FAS	109").	Under	this	method,	income	taxes	(i.e.,	deferred	tax assets	and	liabilities,	current	taxes	payable/refunds	receivable	and	tax	expense)	are	recorded	based	on	amounts	refundable	or	payable	in	the	current	year	and	include	the	results	of	any	difference	between US	GAAP	and	tax	reporting.	Deferred	income	taxes	reflect	the	tax	effect	of	certain	net	operating	loss,	capital	loss	and	general	business	credit	carryforwards	and	the	net	tax	effects	of	temporary differences	between	the	carrying	amount	of	assets	and	liabilities	for	financial	statement	and	income	tax	purposes,	as	determined	under	enacted	tax	laws	and	rates.	The	Company	accounts	for	the	financial effect	of	changes	in	tax	laws	or	rates	in	the	period	of	enactment.

Effective	April	1,	2007,	the	Company	adopted	FIN	No.	48,	"Accounting	for	Uncertainty	in	Income	Taxes	—	An	Interpretation	of	FAS	No.	109"	("FIN	48").	Upon	the	adoption	of	the	provisions of	FIN	48,	the	Company	changed	its	policy	related	to	the	accounting	for	income	tax	uncertainties.	If	the	Company	considers	that	a	tax	position	is	"more-likely-than-not"	of	being	sustained	upon	audit, based	solely	on	the	technical	merits	of	the	position,	it	recognizes	the	tax	benefit.	The	Company	measures	the	tax	benefit	by	determining	the	largest	amount	that	is	greater	than	50%	likely	of	being	realized upon	settlement,	presuming	that	the	tax	position	is	examined	by	the	appropriate	taxing	authority	that	has	full	knowledge	of	all	relevant	information.	These	assessments	can	be	complex	and	the	Company often	obtains	assistance	from	external	advisors.	To	the	extent	that	the	Company's	estimates	change	or	the	final	tax	outcome	of	these	matters	is	different	than	the	amounts	recorded,	such	differences	will impact	the	income	tax	provision	in	the	period	in	which	such	determinations	are	made.	If	the	initial	assessment	fails	to	result	in	the	recognition	of	a	tax	benefit,	the	Company	regularly	monitors	its	position and	subsequently	recognizes	the	tax	benefit	if	(i)	there	are	changes	in	tax	law	or	analogous	case	law	that	sufficiently	raise	the	likelihood	of	prevailing	on	the	technical	merits	of	the	position	to	"more- likely-than-not",	(ii)	the	statute	of	limitations	expires,	or	(iii)	there	is	a	completion	of	an	audit	resulting	in	a	settlement	of	that	tax	year	with	the	appropriate	agency.	Uncertain	tax	positions	are	classified	as current	only	when	the	Company	expects	to	pay	cash	within	the	next	twelve	months.	Interest	and	penalties,	if	any,	are	recorded	within	the	provision	for	income	taxes	in	the	Company's	consolidated statements	of	operations	and	are	classified	on	the	consolidated	balance	sheets	with	the	related	liability	for	unrecognized	tax	benefits.

See	Note	13	for	further	discussion	of	the	Company's	income	taxes	and	the	adoption	of	FIN	48.

# Leases

The	Company	leases	certain	facilities	and	equipment,	including	its	retail	stores.	Such	leasing	arrangements	are	accounted	for	under	the	provisions	of	FAS	No.	13,	"Accounting	for	Leases,"	and other	related	authoritative	accounting	literature	(collectively,	"FAS	13").	Certain	of	the	Company's	leases	contain	renewal	options,	rent	escalation	clauses	and/or	landlord	incentives.	Rent	expense	for noncancelable	operating	leases	with	scheduled	rent	increases	and/or	landlord	incentives	is	recognized	on	a	straight-line	basis	over	the	lease	term,	beginning	with	the	effective	lease	commencement	date. The	excess	of	straight-line	rent	expense	over	scheduled	payment	amounts	and	landlord	incentives	is	recorded	as	a	deferred	rent	liability.	As	of	the	end	of	Fiscal	2009	and	Fiscal	2008,	deferred	rent

obligations	of	approximately	$125	million	and	$112	million,	respectively,	were	classified	within	other	non-current	liabilities	in	the	Company's	consolidated	balance	sheets.

For	leases	in	which	the	Company	is	involved	with	the	construction	of	the	building	(generally	on	land	owned	by	the	landlord),	the	Company	accounts	for	the	lease	during	the	construction	period under	the	provisions	of	EITF	No.	97-10,	"The	Effect	of	Lessee	Involvement	in	Asset	Construction"	("EITF	97-10").	If	the	Company	concludes	that	it	has	substantively	all	of	the	risks	of	ownership	during construction	of	a	leased	property	and	therefore	is	deemed	the	owner	of	the	project	for	accounting	purposes,	it	records	an	asset	and	related	financing	obligation	for	the	amount	of	total	project	costs	related to	construction-in-progress	and	the	pre-existing	building.	Once	construction	is	complete,	the	Company	considers	the	requirements	under	FAS	No.	98,	"Accounting	for	Leases:	Sale-Leaseback Transactions	Involving	Real	Estate,	Sales-Type	Leases	of	Real	Estate,	Definition	of	Lease	Term,	and	Initial	Direct	Costs	of	Direct	Financing	Leases,"	for	sale-leaseback	treatment.	If	the	arrangement does	not	qualify	for	sale-leaseback	treatment,	the	Company	continues	to	amortize	the	financing	obligation	and	depreciate	the	building	over	the	lease	term.

# Derivatives	and	Financial	Instruments

The	Company	accounts	for	derivative	instruments	in	accordance	with	FAS	No.	133,	"Accounting	for	Derivative	Instruments	and	Hedging	Activities,"	and	subsequent	amendments	(collectively, "FAS	133").	FAS	133	requires	that	all	derivative	instruments	be	recognized	on	the	balance	sheet	at	fair	value.	In	addition,	FAS	133	provides	that,	for	derivative	instruments	that	qualify	for	hedge accounting,	the	effective	portion	of	changes	in	the	fair	value	are	either	(a)	offset	against	the	changes	in	fair	value	of	the	hedged	assets,	liabilities,	or	firm	commitments	through	earnings	or	(b)	recognized in	stockholders'	equity	until	the	hedged	item	is	recognized	in	earnings,	depending	on	whether	the	derivative	is	being	used	to	hedge	changes	in	fair	value	or	cash	flows,	respectively.

Each	derivative	instrument	entered	into	by	the	Company	which	qualifies	for	hedge	accounting	is	considered	highly	effective	at	reducing	the	risk	associated	with	the	exposure	being	hedged.	For each	derivative	designated	as	a	hedge,	the	Company	formally	documents	the	risk	management	objective	and	strategy,	including	the	identification	of	the	hedging	instrument,	the	hedged	item	and	the	risk exposure,	as	well	as	how	effectiveness	is	to	be	assessed	prospectively	and	retrospectively.	To	assess	effectiveness,	the	Company	uses	non-statistical	methods,	including	the	dollar-offset	method,	which compare	the	change	in	the	fair	value	of	the	derivative	to	the	change	in	the	fair	value	or	cash	flows	of	the	hedged	item.	The	extent	to	which	a	hedging	instrument	has	been	and	is	expected	to	continue	to	be effective	at	achieving	offsetting	changes	in	fair	value	or	cash	flows	is	assessed	and	documented	by	the	Company	at	least	on	a	quarterly	basis.	Any	ineffectiveness	in	hedging	relationships	is	recognized immediately	in	earnings.	If	it	is	determined	that	a	derivative	has	not	been	highly	effective,	and	will	continue	not	to	be	highly	effective	at	hedging	the	designated	exposure,	hedge	accounting	is discontinued.

All	undesignated	hedges	of	the	Company	are	entered	into	to	hedge	specific	economic	risks,	such	as	foreign	currency	exchange	and	interest	rate	risk.	The	Company	does	not	enter	into	derivative transactions	for	speculative	or	trading	purposes.	Changes	in	fair	value	relating	to	undesignated	derivative	instruments	are	immediately	recognized	in	earnings.

As	a	result	of	the	use	of	derivative	instruments,	the	Company	is	exposed	to	the	risk	that	counterparties	to	derivative	contracts	will	fail	to	meet	their	contractual	obligations.	To	mitigate	the counterparty	credit	risk,	the	Company	has	a	policy	of	only	entering	into	contracts	with	carefully	selected	financial	institutions	based	upon	their	credit	ratings	and	certain	other	financial	factors,	adhering to	established	limits	for	credit	exposure.	The	Company's	established	policies	and	procedures	for	mitigating	credit	risk	on	derivative	transactions	include	continually	reviewing	and	assessing	the creditworthiness	of	counterparties.	As	of	March	28,	2009,	the	Company	has	approximately	48%	of	its	derivative	instruments	in	asset	positions	placed	with	one	creditworthy	financial	institution.

For	cash	flow	reporting	purposes,	the	Company	classifies	proceeds	received	or	amounts	paid	upon	the	settlement	of	a	derivative	instrument	in	the	same	manner	as	the	related	item	being	hedged.

The	carrying	value	of	the	Company's	financial	instruments	approximates	fair	value,	except	for	certain	differences	relating	to	fixed-rate	debt,	investments	in	other	entities	accounted	for	using	the equity	method	of	accounting	and	certain	other	financial	instruments.	However,	other	than	differences	in	the	fair	value	of	fixed-rate	debt	as	disclosed	in	Note	14,	these	differences	were	not	significant	as	of March	28,	2009	or	March	29,	2008.	The	fair	value	of	financial	instruments	generally	is	determined	by	reference	to	fair	market	values	resulting	from	the	trading	of	the	instruments	on	a	national	securities exchange	or	an	over-the-counter	market.	In	cases	where	quoted	market	prices	are	not	available,	fair	value	is	based	on	estimates	derived	through	the	use	of	present	value	or	other	valuation	techniques.

See	Note	15	for	further	discussion	of	the	Company's	derivatives	and	financial	instruments.

# Fair	Value	Measurement

In	September	2006,	the	FASB	issued	FAS	No.	157,	"Fair	Value	Measurements"	("FAS	157"	or	the	"Standard").	FAS	157	defines	"fair	value"	as	the	price	that	would	be	received	to	sell	an	asset or	paid	to	transfer	a	liability	in	an	orderly	transaction	between	market	participants	at	the	measurement	date	within	an	identified	principal	or	most	advantageous	market,	establishes	a	framework	for measuring	fair	value	in	accordance	with	US	GAAP	and	expands	disclosures	regarding	fair	value	measurements.	The	Company	adopted	the	provisions	of	FAS	157	for	all	of	its	financial	assets	and liabilities	within	the	Standard's	scope	as	of	the	beginning	of	Fiscal	2009	(March	30,	2008).	FAS	157	will	become	effective	for	all	nonfinancial	assets	and	liabilities	of	the	Company	within	the	scope	of FAS	157	as	of	the	beginning	of	Fiscal	2010	(March	29,	2009).	The	adoption	of	the	provisions	of	FAS	157	effective	during	Fiscal	2009	did	not	have	a	significant	impact	on	the	Company's	consolidated financial	statements.	The	Company	does	not	expect	that	the	provisions	of	FAS	157	to	be	adopted	in	Fiscal	2010	will	have	a	material	effect	on	its	consolidated	financial	statements.	See	Note	15	for	further discussion	on	the	impact	of	adoption	on	the	Company's	consolidated	financial	statements.

# Accounting	for	Uncertainty	in	Income	Taxes

In	July	2006,	the	FASB	issued	FIN	48,	which	clarifies	the	accounting	for	uncertainty	in	income	tax	positions.	FIN	48	prescribes	a	recognition	threshold	and	measurement	attribute	for	the financial	statement	recognition	and	measurement	of	a	tax	position	taken	or	expected	to	be	taken	in	a	tax	return.	Additionally,	FIN	48	provides	guidance	on	derecognition,	classification,	interest	and penalties,	accounting	in	interim	periods,	disclosure	and	transition.	The	Company	adopted	the	provisions	of	FIN	48	as	of	the	beginning	of	Fiscal	2008	(April	1,	2007)	and	recorded	a	related	$62.5	million reduction	in	retained	earnings	as	of	April	1,	2007.	See	Note	13	for	further	discussion	of	the	Company's	income	taxes	and	the	adoption	of	FIN	48.

# Financial	Statement	Misstatements

In	September	2006,	the	U.S.	Securities	and	Exchange	Commission	("SEC")	staff	issued	Staff	Accounting	Bulletin	No.	108,	"Considering	the	Effects	of	Prior	Year	Misstatements	when Quantifying	Misstatements	in	Current	Year	Financial	Statements"	("SAB	108").	SAB	108	was	issued	in	order	to	eliminate	the	diversity	in	practice	surrounding	how	public	companies	quantify	and evaluate	financial	statement	misstatements.

Traditionally,	there	have	been	two	widely-recognized	methods	for	quantifying	and	evaluating	the	effects	of	financial	statement	misstatements:	(i)	the	balance	sheet	("iron	curtain")	method	and (ii)	the	income	statement	("rollover")	method.	The	iron	curtain	method	quantifies	a	misstatement	based	on	the	effects	of	correcting	the	misstatement	existing	in	the	balance	sheet	at	the	end	of	the	reporting period.	The	rollover	method	quantifies	a	misstatement	based	on	the	amount	of	the	error	originating	in	the	current	period	income	statement,	including	the	reversing	effect	of	prior	year	misstatements.	The use	of	the	rollover	method	can	lead	to	the	accumulation	of

misstatements	in	the	balance	sheet.	Prior	to	the	adoption	of	SAB	108,	the	Company	historically	used	the	rollover	method	for	quantifying	and	evaluating	identified	financial	statement	misstatements.

By	issuing	SAB	108,	the	SEC	staff	established	an	approach	that	requires	quantification	and	evaluation	of	financial	statement	misstatements	based	on	the	effects	of	the	misstatements	under	both the	iron	curtain	and	rollover	methods.	This	model	is	commonly	referred	to	as	a	"dual	approach."

SAB	108	required	companies	to	initially	apply	its	provisions	either	by	(i)	restating	prior	financial	statements	as	if	the	dual	approach	had	always	been	applied	or	(ii)	recording	the	cumulative effect	of	initially	applying	the	dual	approach	as	adjustments	to	the	carrying	values	of	assets	and	liabilities	as	of	the	beginning	of	the	current	fiscal	year,	with	an	offsetting	adjustment	recorded	to	the opening	balance	of	retained	earnings.	The	Company	adopted	the	provisions	of	SAB	108	in	Fiscal	2007	and	elected	to	record	the	effects	of	applying	SAB	108	using	the	cumulative	effect	transition	method and,	as	such,	recorded	a	$16.9	million	reduction	in	retained	earnings	as	of	April	2,	2006.	The	following	table	summarizes	the	effects	of	applying	SAB	108	for	each	period	in	which	the	identified misstatement	originated	through	April	2,	2006:

(a) The	Company	previously	quantified	these	errors	under	the	rollover	method	and	concluded	that	they	were	immaterial,	individually	and	in	the	aggregate,	to	the	Company's	consolidated	financial	statements.

(b) The	Company	historically	did	not	eliminate	certain	intercompany	profits	on	the	transfer	of	inventory,	which	resulted	in	a	cumulative	overstatement	of	its	inventory	by	$5.0	million	in	years	prior	to	Fiscal	2006.	In addition,	the	Company	included	$4.3	million	of	certain	product	development	costs	in	its	inventory	in	years	prior	to	Fiscal	2006	that,	in	hindsight,	were	not	considered	to	be	capitalizable.	To	correct	these misstatements,	the	Company	reduced	inventory	by	$9.3	million	as	of	April	2,	2006,	with	a	corresponding	pretax	reduction	in	retained	earnings.

(c) In	connection	with	a	specialized	retail	store	construction	project	in	one	of	its	international	locations,	the	Company	did	not	recognize	rent	expense	upon	taking	possession	of	the	leased	property	and	commencing construction	in	Fiscal	2005.	To	correct	these	misstatements,	the	Company	recorded	a	$3.2	million	net	increase	in	its	liability	for	accrued	rent	as	of	April	2,	2006,	with	a	corresponding	pretax	reduction	in	retained earnings.

(d) The	Company	historically	did	not	properly	account	for	differences	between	its	investment	bases	in	certain	consolidated	and	unconsolidated	investees	and	its	share	of	the	underlying	equity	of	such	investees.	To correct	these	misstatements,	the	Company	reduced	the	carrying	value	of	its	equity	method	investment	by	$1.9	million	and	increased	its	minority	interest	liability	by	$1.0	million	as	of	April	2,	2006,	with	a corresponding	pretax	reduction	of	$2.9	million	in	total	to	retained	earnings.

(e) As	a	result	of	the	misstatements	described	above	and	$5.1	million	of	deferred	tax	balances	that	were	not	supportable	based	on	a	subsequent	analysis	of	underlying	book-tax	basis	differences,	the	Company's provision	for	income	taxes	was	cumulatively	overstated	by	$1.9	million	in	years	prior	to	Fiscal	2006	and	understated	by	$3.4	million	in	Fiscal	2006.	To	correct	these	misstatements,	the	Company	increased	its	net deferred	income	tax	liability	by	a	total	of	$1.5	million	as	of	April	2,	2006,	with	a	corresponding	decrease	in	retained	earnings.

In	December	2004,	the	FASB	issued	FAS	No.	123R,	"Share-Based	Payment"	("FAS	123R").	FAS	123R	supersedes	both	Accounting	Principles	Board	Opinion	No.	25,	"Accounting	for	Stock Issued	to	Employees"	("APB	25"),	which	permitted	the	use	of	the	intrinsic-value	method	in	accounting	for	stock-based	compensation,	and	FAS	No.	123,	"Accounting	for	Stock-Based	Compensation,"	as amended	by	FAS	No.	148,	"Accounting	for	Stock-Based	Compensation	—	Transition	and	Disclosure"	("FAS	123"),	which	allowed	companies	applying	APB	25	to	just	disclose	in	their	financial statements	the	pro	forma	effect	on	net	income	from	applying	the	fair-value	method	of	accounting	for	stock-based	compensation.	FAS	123R	requires	all	share-based	payments	to	employees	and	non- employee	directors	to	be	expensed	based	on	the	grant	date	fair	value	of	the	awards	over	the	requisite	service	period.	The	Company	adopted	the	provisions	of	FAS	123R	effective	as	of	the	beginning	of Fiscal	2007	and	recorded	a	related	$42.7	million	reclassification	within	stockholders'	equity	as	of	April	2,	2006.	See	Note	19	for	further	discussion	of	the	Company's	stock-based	compensation.

# Other	Recently	Issued	Accounting	Standards

In	March	2008,	the	FASB	issued	FAS	No.	161,	"Disclosures	about	Derivative	Instruments	and	Hedging	Activities"	("FAS	161").	FAS	161	amends	FAS	133	to	provide	enhanced	disclosure requirements	surrounding	how	and	why	an	entity	uses	derivative	instruments,	how	derivative	instruments	and	related	hedged	items	are	accounted	for	under	FAS	133	and	how	derivative	instruments	and related	hedged	items	affect	an	entity's	financial	position,	financial	performance	and	cash	flows.	The	Company	adopted	the	disclosure	requirements	of	FAS	161	as	of	the	fourth	quarter	of	Fiscal	2009	(see Note	15).	The	adoption	of	FAS	161	did	not	have	an	impact	on	the	Company's	consolidated	financial	statements.

In	December	2007,	the	FASB	issued	FAS	No.	141R,	"Business	Combinations"	("FAS	141R"),	which	replaces	FAS	No.	141.	FAS	141R	was	issued	to	create	greater	consistency	in	the	accounting and	financial	reporting	of	business	combinations,	resulting	in	more	complete,	comparable	and	relevant	information	for	investors	and	other	users	of	financial	statements.	FAS	141R	establishes	principles and	requirements	for	how	an	acquirer	in	a	business	combination	recognizes	and	measures	in	its	financial	statements	the	identifiable	assets	acquired,	liabilities	assumed,	and	any	noncontrolling	interests	in the	acquiree,	as	well	as	the	goodwill	acquired.	Significant	changes	from	current	practice	resulting	from	FAS	141R	include	the	need	for	the	acquirer	to	record	100%	of	all	assets	and	liabilities	of	the acquired	business,	including	goodwill,	generally	at	their	fair	values	for	all	business	combinations	(whether	partial,	full	or	step	acquisitions);	the	need	to	recognize	contingent	consideration	at	its	fair	value on	the	acquisition	date	and,	for	certain	arrangements,	to	recognize	changes	in	fair	value	in	earnings	until	settlement;	and	the	need	to	expense	acquisition-related	transaction	and	restructuring	costs	rather than	to	treat	them	as	part	of	the	cost	of	the	acquisition.	FAS	141R	also	establishes	disclosure	requirements	to	enable	users	to	evaluate	the	nature	and	financial	effects	of	the	business	combination. FAS	141R	is	effective	for	the	Company	as	of	the	beginning	of	Fiscal	2010	and	will	be	applied	prospectively	to	business	combinations	that	close	on	or	after	March	29,	2009.

In	December	2007,	the	FASB	issued	FAS	No.	160,	"Noncontrolling	Interests	in	Consolidated	Financial	Statements	—	an	Amendment	of	ARB	No.	51"	("FAS	160").	FAS	160	establishes accounting	and	reporting	standards	for	noncontrolling	interests	(previously	referred	to	as	"minority	interests")	in	a	subsidiary	and	for	the	deconsolidation	of	a	subsidiary,	to	ensure	consistency	with	the requirements	of	FAS	141R.	FAS	160	states	that	noncontrolling	interests	should	be	classified	as	a	separate	component	of	equity,	and	establishes	reporting	requirements	that	provide	sufficient	disclosures that	clearly	identify	and	distinguish	between	the	interests	of	the	parent	and	the	interests	of	the	noncontrolling	owners.	FAS	160	is	effective	for	the	Company	as	of	the	beginning	of	Fiscal	2010	and	its application	is	not	expected	to	have	a	material	effect	on	the	Company's	consolidated	financial	statements.

In	February	2007,	the	FASB	issued	FAS	No.	159,	"The	Fair	Value	Option	for	Financial	Assets	and	Financial	Liabilities	—	Including	an	Amendment	of	FAS	No.	115"	("FAS	159").	FAS	159 permits	companies	to	choose	to	measure,	on	an	instrument-by-instrument	basis,	financial	instruments	and	certain	other	items	at	fair	value	that	are

not	currently	required	to	be	measured	at	fair	value.	Unrealized	gains	and	losses	on	items	for	which	the	fair	value	option	is	elected	will	be	recognized	in	earnings	at	each	subsequent	reporting	date.	The Company	did	not	elect	the	fair	value	option	for	any	of	its	financial	assets	or	financial	liabilities	upon	adoption	of	FAS	159	in	the	beginning	of	Fiscal	2009.	Therefore,	the	initial	application	of	FAS	159 did	not	have	a	material	effect	on	the	Company's	consolidated	financial	statements.

# 5. Acquisitions	and	Joint	Ventures

# Fiscal	2009	Transactions

The	Company	accounted	for	the	Japanese	Childrenswear	and	Golf	Acquisition	as	an	asset	purchase	during	the	second	quarter	of	Fiscal	2009.	Based	on	the	results	of	valuation	analyses	performed, the	Company	allocated	all	of	the	consideration	exchanged	in	the	Japanese	Childrenswear	and	Golf	Acquisition	to	the	net	assets	acquired	in	connection	with	the	transaction.	No	settlement	loss	associated with	any	pre-existing	relationships	was	recognized.	The	acquisition	cost	of	$28	million	(including	transaction	costs	of	approximately	$2	million)	has	been	allocated	to	the	net	assets	acquired	based	on their	respective	fair	values	as	follows:	inventory	of	$16	million;	customer	relationship	intangible	asset	of	$13	million;	and	other	net	liabilities	of	$1	million.

On	May	29,	2007,	the	Company	acquired	control	of	certain	of	its	Japanese	businesses	that	were	formerly	conducted	under	licensed	arrangements,	consistent	with	the	Company's	long-term strategy	of	international

expansion.	In	particular,	the	Company	acquired	approximately	77%	of	the	outstanding	shares	of	Impact	21	that	it	did	not	previously	own	in	a	cash	tender	offer	(the	"Impact	21	Acquisition"),	thereby increasing	its	ownership	in	Impact	21	from	approximately	20%	to	approximately	97%.	Impact	21	previously	conducted	the	Company's	men's,	women's	and	jeans	apparel	and	accessories	business	in Japan	under	a	pre-existing,	sub-license	arrangement.	In	addition,	the	Company	acquired	the	remaining	50%	interest	in	PRL	Japan,	which	holds	the	master	license	to	conduct	Polo's	business	in	Japan,	from Onward	Kashiyama	and	Seibu	(the	"PRL	Japan	Minority	Interest	Acquisition").	Collectively,	the	Impact	21	Acquisition	and	the	PRL	Japan	Minority	Interest	Acquisition	are	herein	referred	to	as	the "Japanese	Business	Acquisitions."

Based	on	the	results	of	valuation	analyses	performed,	the	Company	allocated	all	of	the	consideration	exchanged	to	the	purchase	of	the	Japanese	businesses.	The	acquisition	cost	of	approximately $374	million	has	been	allocated	to	the	net	assets	acquired	based	on	their	respective	fair	values	as	follows:	cash	of	$189	million;	trade	receivables	of	$26	million;	inventory	of	$38	million;	finite-lived intangible	assets	of	$75	million	(consisting	of	the	re-acquired	licenses	of	$21	million	and	customer	relationships	of	$54	million);	non-tax-deductible	goodwill	of	$140	million;	assumed	pension	liabilities of	$5	million;	net	deferred	tax	liabilities	of	$31	million;	and	other	net	liabilities	of	$58	million.

# Acquisition	of	Small	Leathergoods	Business

On	April	13,	2007,	the	Company	acquired	from	Kellwood	Company	("Kellwood")	substantially	all	of	the	assets	of	New	Campaign,	Inc.,	the	Company's	licensee	for	men's	and	women's	belts and	other	small	leather	goods	under	the	Ralph	Lauren,	Lauren	and	Chaps	brands	in	the	U.S.	(the	"Small	Leathergoods	Business	Acquisition").	The	assets	acquired	from	Kellwood	are	operated	under	the name	of	"Polo	Ralph	Lauren	Leathergoods"	and	allowed	the	Company	to	further	expand	its	accessories	business.	The	acquisition	cost	was	$10.4	million.

The	Company	determined	that	the	terms	of	the	pre-existing	licensing	relationship	were	reflective	of	market.	As	such,	the	Company	allocated	all	of	the	consideration	exchanged	to	the	Small Leathergoods	Business	Acquisition	and	no	settlement	gain	or	loss	was	recognized	in	connection	with	the	transaction.	The	results	of	operations	for	the	Polo	Ralph	Lauren	Leathergoods	business	have	been consolidated	in	the	Company's	results	of	operations	commencing	April	1,	2007.	In	addition,	the	acquisition	cost	has	been	allocated	as	follows:	inventory	of	$7.0	million;	finite-lived	intangible	assets	of $2.1	million	(consisting	of	the	re-acquired	license	of	$1.3	million,	customer

relationships	of	$0.7	million	and	order	backlog	of	$0.1	million);	other	net	assets	of	$0.7	million;	and	tax-deductible	goodwill	of	$0.6	million.

# Formation	of	Ralph	Lauren	Watch	and	Jewelry	Joint	Venture

In	March	2007,	the	Company	formed	a	joint	venture	with	Richemont	to	design,	develop,	manufacture,	sell	and	distribute	luxury	watches	and	fine	jewelry.	See	Note	3	for	further	discussion	of	the joint	venture.

# Acquisition	of	RL	Media	Minority	Interest

On	March	28,	2007,	the	Company	acquired	the	remaining	50%	equity	interest	in	RL	Media	formerly	held	by	NBC	(37.5%)	and	Value	Vision	(12.5%)	(the	"RL	Media	Minority	Interest Acquisition").	RL	Media	conducts	the	Company's	e-commerce	initiatives	through	the	RalphLauren.com	and	Rugby.com	internet	sites.	The	results	of	operations	for	RL	Media	have	already	been consolidated	by	the	Company	as	described	further	in	Note	2	to	the	consolidated	financial	statements.	The	acquisition	cost	was	$175	million.

The	Company	evaluated	the	terms	of	all	significant	pre-existing	relationships	between	itself	and	RL	Media	to	determine	if	a	settlement	of	the	pre-existing	relationships	existed.	In	addition, valuation	analyses	of	RL	Media	were	performed.	Based	on	these	analyses,	as	well	as	the	rights	and	obligations	of	the	parties	under	the	RL	Media	partnership	agreement,	the	Company	determined	that	all of	the	consideration	exchanged	should	be	allocated	to	the	acquisition	of	the	RL	Media	minority	interest.	Accordingly,	no	settlement	gain	or	loss	was	recognized	in	connection	with	this	transaction.

The	excess	of	the	acquisition	cost	over	the	pre-existing	minority	interest	liability	of	$33	million	has	been	allocated	as	follows:	inventory	of	$8	million;	finite-lived	intangible	assets	of	$58	million (consisting	of	the	re-acquired	license	of	$56	million	and	customer	list	of	$2	million);	and	tax-deductible	goodwill	of	$76	million.

# Supplemental	Pro	Forma	Information

There	were	no	acquisitions	during	Fiscal	2009	that	had	a	material	effect	on	the	Company's	financial	position	and	results	of	operations,	and	would	have	warranted	the	disclosure	of	related supplemental	pro	forma	information.	However,	summarized	below	is	certain	supplemental	pro	forma	information	related	to	the	Company's	significant	acquisitions	that	occurred	during	Fiscal	2008	and Fiscal	2007.

The	following	unaudited	condensed	pro	forma	information	(herein	referred	to	as	the	"pro	forma	information")	assumes	the	Japanese	Business	Acquisitions,	the	RL	Media	Minority	Interest Acquisition	and	the	Small	Leathergoods	Business	Acquisition	had	occurred	as	of	the	beginning	of	Fiscal	2008	and	Fiscal	2007	for	the	applicable	fiscal	years	presented.	The	pro	forma	information	has been	prepared	for	comparative	purposes	only	and	is	not	necessarily	indicative	of	the	actual	results	that	would	have	been	attained	had	the	acquisitions	occurred	as	of	the	beginning	of	the	fiscal	years presented,	nor	is	it	indicative	of	the	Company's	future	results.	Furthermore,	the	unaudited	pro	forma	information	does	not	reflect	management's	estimate	of	any	revenue-enhancing	opportunities	nor anticipated	cost	savings	that	may	occur	as	a	result	of	the	integration	and	consolidation	of	the	acquisitions.

The	pro	forma	information	set	forth	below	reflects	nonrecurring	charges	related	to	(a)	the	amortization	of	the	write-ups	to	fair	value	of	inventory	included	within	cost	of	goods	sold	as	part	of	the preliminary	purchase	price	allocations,	which	were	fully	recognized	within	six	months	of	each	respective	acquisition	date;	(b)	the	amortization	of	the	write-up	to	fair	value	of	the	acquired	licenses	as	part of	the	preliminary	purchase	price	allocation	for	the	Japanese	Business	Acquisitions,	which	was	fully	amortized	within	nine	months	of	the	acquisition	date;	and	(c)	the	write-off	of	foreign	currency	option contracts	entered	into	to	manage	certain	foreign	currency	exposures	associated	with	the	Japanese	Business	Acquisitions	which	expired	unexercised	during	the	first	quarter	of	Fiscal	2008.	These

charges	included	in	the	Company's	pro	forma	results	were	approximately	$47	million	for	Fiscal	2008	and	Fiscal	2007,	respectively.

|  | Historical | Historical | Pro	Forma	(unaudited) | Pro	Forma	(unaudited) |
| :--- | :--- | :--- | :--- | :--- |
|  | Fiscal\tYears\tEnded | Fiscal\tYears\tEnded | Fiscal\tYears\tEnded | Fiscal\tYears\tEnded |
|  | March\t29, | March\t31, | March\t29, | March\t31, |
|  | 2008 | 2007 | 2008 | 2007 |
|  |  | (millions,\texcept\tper\tshare\tdata) | (millions,\texcept\tper\tshare\tdata) |  |
| Net\trevenues | $4,880.1 | $4,295.4 | $4,880.1 | $4,582.0 |
| Gross\tprofit | 2,638.1 | 2,336.2 | 2,638.1 | 2,413.4 |
| Amortization\tof\tintangible\tassets | (47.2) | (15.6) | (47.8) | (50.5) |
| Operating\tincome | 653.4 | 652.6 | 652.8 | 636.5 |
| Net\tincome | 419.8 | 400.9 | 419.8 | 383.7 |
| Net\tincome\tper\tcommon\tshare: |  |  |  |  |
| Basic | $4.10 | $3.84 | $4.10 | $3.68 |
| Diluted | $3.99 | $3.73 | $3.99 | $3.57 |

Inventories	consist	of	the	following:

|  | March	28,<br>2009 | March	29,<br>2008 |
| :--- | :--- | :--- |
|  | (millions) |  |
| Raw\tmaterials | $5.4 | $6.7 |
| Work-in-process | 1.7 | 1.7 |
| Finished\tgoods | 518.0 | 506.5 |
| Total\tinventory | $525.1 | $514.9 |

# 7. Property	and	Equipment

Property	and	equipment,	net,	consist	of	the	following:

|  | March	28,<br>2009 | March	29,<br>2008 |
| :--- | :--- | :--- |
|  | (millions) |  |
| Land\tand\timprovements | $9.9 | $9.9 |
| Buildings\tand\timprovements | 112.6 | 97.4 |
| Furniture\tand\tfixtures | 491.1 | 464.0 |
| Machinery\tand\tequipment | 305.0 | 276.9 |
| Leasehold\timprovements | 643.3 | 604.6 |
| Construction\tin\tprogress | 49.6 | 56.7 |
|  | 1,611.5 | 1,509.5 |
| Less:\taccumulated\tdepreciation | (959.9) | (799.6) |
| Property\tand\tequipment,\tnet | $651.6 | $709.9 |

As	discussed	in	Note	3,	the	Company	accounts	for	goodwill	and	other	intangible	assets	in	accordance	with	FAS	142.	Under	FAS	142,	goodwill	and	certain	other	intangible	assets	deemed	to	have indefinite	useful	lives	are	not

amortized.	Rather,	goodwill	and	such	indefinite-lived	intangible	assets	are	subject	to	annual	impairment	testing.	Finite-lived	intangible	assets	continue	to	be	amortized	over	their	respective	estimated useful	lives.	Based	on	the	results	of	the	Company's	annual	impairment	testing	of	goodwill	and	indefinite-lived	intangible	assets	in	Fiscal	2009,	Fiscal	2008	and	Fiscal	2007,	no	impairment	charges	were deemed	necessary.

# Goodwill

The	following	analysis	details	the	changes	in	goodwill	for	each	reportable	segment	during	Fiscal	2009	and	Fiscal	2008:

|  | Wholesale | Retail | Licensing | Total |
| :--- | :--- | :--- | :--- | :--- |
|  |  | (millions) |  |  |
| Balance\tat\tMarch\t31,\t2007 | $518.9 | $155.1 | $116.5 | $790.5 |
| Acquisition-related\tactivity(a) | 122.5 | (3.9) | 16.8 | \t135.4 |
| Other\tadjustments(b) | 43.4 | 0.9 | 4.9 | 49.2 |
| Balance\tat\tMarch\t29,\t2008 | $684.8 | $152.1 | $138.2 | $975.1 |
| Acquisition-related\tactivity(a) | 4.8 | — | — | 4.8 |
| Other\tadjustments(b) | (15.5) | (1.3) | 3.3 | \t(13.5) |
| Balance\tat\tMarch\t28,\t2009 | $674.1 | $150.8 | $141.5 | $966.4 |

(a) Fiscal	2009	acquisition-related	activity	primarily	includes	the	minority	squeeze-out	related	to	the	Japanese	Business	Acquisitions.	Fiscal	2008	acquisition-related	activity	primarily	includes	the	Japanese	Business Acquisitions	and	the	Small	Leathergoods	Business	Acquisition,	as	well	as	other	adjustments	related	to	revisions	in	the	estimated	purchase	price	allocation	of	the	RL	Media	Minority	Interest	Acquisition.	See Note	5	for	further	discussion	of	the	Company's	acquisitions.

(b) Other	adjustments	principally	include	changes	in	foreign	currency	exchange	rates.

# Other	Intangible	Assets

Other	intangible	assets	consist	of	the	following:

|  | March	28,	2009 | March	28,	2009 |  | March	29,	2008 | March	29,	2008 | March	29,	2008 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Gross\nCarrying\nAmount | Accum.\nAmort. | Net | Gross\nCarrying\nAmount | Accum.\nAmort. | Net |
|  |  |  | (millions) |  |  |  |
| Intangible\tassets\tsubject\tto\tamortization: |  |  |  |  |  |  |
| Re-acquired\tlicensed\ttrademarks | $226.0 | $(58.7) | $167.3 | $223.5 | $(47.5) | $176.0 |
| Customer\trelationships/lists | 206.7 | (34.1) | 172.6 | 186.7 | (22.4) | 164.3 |
| Other | 7.4 | (7.1) | 0.3 | 7.4 | (7.1) | 0.3 |
| Total\tintangible\tassets\tsubject\tto\tamortization | 440.1 | (99.9) | 340.2 | 417.6 | (77.0) | 340.6 |
| Intangible\tassets\tnot\tsubject\tto\tamortization: |  |  |  |  |  |  |
| Trademarks\tand\tbrands | 8.7 | — | 8.7 | 8.7 | — | 8.7 |
| Total\tintangible\tassets | $448.8 | $(99.9) | $348.9 | $426.3 | $(77.0) | $349.3 |

#     Amortization

        Based	on	the	amount	of	intangible	assets	subject	to	amortization	as	of	March	28,	2009,	the	expected	amortization	for	each	of	the	next	five	fiscal	years	and	thereafter	is	as	follows:

| Amortization |  |
| :--- | :--- |
| Based\ton\tthe\tamount\tof\tintangible\tassets\tsubject\tto\tamortization\tas\tof\tMarch\t28,\t2009,\tthe\texpected\tamortization\tfor\teach\tof\tthe\tnext\tfive\tfiscal\tyears\tand\tthereafter\tis\tas\tfollows: |  |
|  | Amortization\nExpense\n(millions) |
| Fiscal\t2010 | $20.4 |
| Fiscal\t2011 | 20.1 |
| Fiscal\t2012 | 19.5 |
| Fiscal\t2013 | 19.1 |
| Fiscal\t2014 | 19.1 |
| Fiscal\t2015\tand\tthereafter | 242.0 |
| Total | $340.2 |

The	expected	future	amortization	expense	above	reflects	weighted-average	estimated	useful	lives	of	20.3	years	for	re-acquired	licensed	trademarks,	16.5	years	for	customer	relationships/lists	and 18.3	years	for	the	Company's	finite-lived	intangible	assets	in	total.

# 9. Other	Non-Current	Assets

Other	non-current	assets	consist	of	the	following:

|  | March	28,<br>2009 | March	29,<br>2008 |
| :--- | :--- | :--- |
|  | (millions) |  |
| Equity-method\tinvestments | $4.2 | $2.4 |
| Officers'\tlife\tinsurance\tpolicies | 32.9 | 48.3 |
| Restricted\tcash\tand\tother\tnon-current\tinvestments | 101.1 | 138.6 |
| Other\tnon-current\tassets | 91.9 | 131.5 |
| Total\tother\tnon-current\tassets | $230.1 | $320.8 |

# 10. Other	Current	and	Non-Current	Liabilities

Accrued	expenses	and	other	current	liabilities	consist	of	the	following:

|  | March	28,<br>2009 | March	29,<br>2008 |
| :--- | :--- | :--- |
|  | (millions) |  |
| Accrued\toperating\texpenses | $221.9 | $243.8 |
| Accrued\tpayroll\tand\tbenefits | 110.7 | 88.2 |
| Accrued\tinventory | 44.6 | 42.0 |
| Deferred\tincome | 45.9 | 50.1 |
| Other | 49.2 | 43.6 |
| Total\taccrued\texpenses\tand\tother\tcurrent\tliabilities | $472.3 | $467.7 |

Other	non-current	liabilities	consist	of	the	following:

|  | March	28,<br>2009 | March	29,<br>2008 |
| :--- | :--- | :--- |
|  | (millions) |  |
| Capital\tlease\tobligations | $76.6 | $73.2 |
| Deferred\trent\tobligations | 124.7 | 112.3 |
| Deferred\tincome | 145.6 | 168.8 |
| Minority\tinterest | — | 5.5 |
| Other | 39.2 | 79.4 |
| Total\tother\tnon-current\tliabilities | $386.1 | $439.2 |

# 11. Impairments	of	Assets

Property	and	equipment,	along	with	other	long-lived	assets,	are	evaluated	for	impairment	periodically	whenever	events	or	changes	in	circumstances	indicate	that	their	related	carrying	amounts may	not	be	recoverable	in	accordance	with	FAS	144.	In	evaluating	long-lived	assets	for	recoverability,	the	Company	uses	its	best	estimate	of	future	cash	flows	expected	to	result	from	the	use	of	the	asset and	its	eventual	disposition.	To	the	extent	that	estimated	future	undiscounted	net	cash	flows	attributable	to	the	asset	are	less	than	the	carrying	amount,	an	impairment	loss	is	recognized	equal	to	the difference	between	the	carrying	value	of	such	asset	and	its	fair	value.

# Fiscal	2009	Impairment

During	Fiscal	2009,	the	Company	recorded	total	non-cash	impairment	charges	of	$55.4	million	to	reduce	the	net	carrying	value	of	certain	long-lived	assets	to	their	estimated	fair	value,	which	was determined	based	on	discounted	expected	cash	flows.	Total	Fiscal	2009	impairment	charges	were	comprised	of	$7.2	million	recorded	during	the	second	quarter	and	$48.2	million	recorded	during	the fourth	quarter.

Total	Fiscal	2009	impairment	charges	included	a	$52.0	million	write-down	of	Retail	store	assets	and	a	$3.4	million	write-down	of	certain	capitalized	software	costs	(primarily	in	the	Wholesale segment)	that	were	determined	to	no	longer	be	used	over	the	intended	service	period.	The	Retail	store	asset	impairment	was	associated	with	lower-than-expected	operating	performance	for	the	fiscal	year for	certain	Ralph	Lauren,	Club	Monaco	and	Rugby	full-price	stores	primarily	located	in	the	U.S.	due	in	part	to	the	significant	contraction	in	consumer	spending	experienced	during	the	latter	half	of	the fiscal	year	and	which	is	expected	to	continue	to	negatively	impact	such	stores'	future	operating	performance.

During	Fiscal	2008,	the	Company	recorded	non-cash	impairment	charges	of	$5.0	million	to	reduce	the	carrying	value	of	certain	long-lived	assets	in	its	Retail	segment	to	their	estimated	fair	value. These	impairment	charges	were	primarily	recorded	as	a	result	of	lower-than-expected	operating	cash	flow	performance	for	certain	stores	that,	along	with	projections	of	future	performance,	indicated	that the	carrying	values	of	the	related	fixed	assets	were	not	recoverable.

No	impairment	charges	were	recorded	in	Fiscal	2007.

# 12. Restructuring

The	Company	has	recorded	restructuring	liabilities	in	recent	years	relating	to	various	cost-savings	initiatives,	as	well	as	certain	of	its	acquisitions.	Through	Fiscal	2009,	in	accordance	with	US GAAP,	restructuring	costs	incurred	in	connection	with	acquisitions	were	capitalized	as	part	of	the	purchase	accounting	for	the	transaction.	Such	acquisition-related	restructuring	costs	were	not	material	in any	period.	Liabilities	for	costs	associated	with

non-acquisition-related	restructuring	initiatives	are	expensed	and	initially	measured	at	fair	value	when	incurred	in	accordance	with	US	GAAP.	A	description	of	the	nature	of	significant	non-acquisition- related	restructuring	activities	and	related	costs	is	presented	below.

# Fiscal	2009	Restructuring

During	the	fourth	quarter	of	Fiscal	2009,	the	Company	initiated	a	restructuring	plan	designed	to	better	align	its	cost	base	with	the	slowdown	in	consumer	spending	negatively	affecting	sales	and operating	margins	and	to	improve	overall	operating	effectiveness	(the	"Fiscal	2009	Restructuring	Plan").	The	Fiscal	2009	Restructuring	Plan	included	the	termination	of	approximately	500	employees	and the	closure	of	certain	underperforming	retail	stores.

In	connection	with	the	Fiscal	2009	Restructuring	Plan,	the	Company	recorded	$20.8	million	in	restructuring	charges	during	the	fourth	quarter	of	Fiscal	2009.	A	summary	of	the	activity	in	the related	liability	is	as	follows:

|  | Severance | Lease |  |  |
| :--- | :--- | :--- | :--- | :--- |
|  | and\tBenefits | Termination | Other |  |
|  | Costs | Costs | Costs(a) | Total |
|  |  | (millions) |  |  |
| Balance\tat\tMarch\t29,\t2008 | $—\t $— | $—\t $— | $— | $— |
| Additions\tcharged\tto\texpense | 13.4 | 5.8 | 1.6 | 20.8 |
| Cash\tpayments\tcharged\tagainst\treserve | (0.8) | (0.9) | — | (1.7) |
| Non-cash\tadjustments | — | — | (1.6) | (1.6) |
| Balance\tat\tMarch\t28,\t2009 | $12.6 | $4.9 | $— | $17.5 |

# (a) Primarily	related	to	write-downs	of	certain	fixed	assets.

Payments	related	to	severance	and	benefits	and	lease	termination	costs	are	expected	to	be	paid	in	full	primarily	by	the	end	of	Fiscal	2010.

In	addition	to	those	restructuring	charges	incurred	in	connection	with	the	Fiscal	2009	Restructuring	Plan	implemented	during	the	fourth	quarter	as	discussed	above,	the	Company	recognized $2.8	million	of	other	restructuring	charges	earlier	in	the	fiscal	year,	primarily	related	to	severance	costs	associated	with	the	transition	of	certain	sourcing	and	production	facilities	in	Southeast	Asia	during Fiscal	2009.

There	were	no	significant	restructuring	charges	recognized	by	the	Company	during	Fiscal	2008.

During	the	fourth	quarter	of	Fiscal	2006,	the	Company	initiated	a	plan	to	restructure	its	Club	Monaco	retail	business.	In	particular,	this	plan	consisted	of	the	closure	of	all	five	Club	Monaco factory	stores	and	the	intention	to	dispose	of	by	sale	or	closure	all	eight	of	the	Caban	Concept	Stores	(collectively,	the	"Club	Monaco	Restructuring	Plan").	In	connection	with	this	plan,	during	Fiscal	2007 the	Company	ultimately	decided	to	close	all	of	the	Caban	Concept	Stores	and	recognized	$4.0	million	of	associated	restructuring	charges,	primarily	relating	to	lease	termination	costs.	The	remaining liability	under	the	plan	was	$0.9	million	as	of	March	28,	2009.

Additionally,	the	Company	recognized	$0.6	million	of	other	restructuring	charges	primarily	related	to	severance	costs	associated	with	the	transition	of	certain	sourcing	and	production	functions from	Colombia	to	the	U.S.	during	Fiscal	2007.

# Taxes	on	Income

Domestic	and	foreign	pretax	income	are	as	follows:

|  | March	28, | March	29, | March	31, |
| :--- | :--- | :--- | :--- |
|  | 2009 | 2008 | 2007 |
|  |  | (millions) |  |
| Domestic | $351.1 | $473.7 | $508.6 |
| Foreign | 236.4 | 168.4 | 134.7 |
| Total\tincome\tbefore\tprovision\tfor\tincome\ttaxes | $587.5 | $642.1 | $643.3 |

Current	and	deferred	income	taxes	(tax	benefits)	provided	are	as	follows:

|  | March	28, | March	29, | March	31, |
| :--- | :--- | :--- | :--- |
|  | 2009 | 2008 | 2007 |
|  |  | (millions) |  |
| Current: |  |  |  |
| Federal(a) | $126.6 | $157.5 | $250.7 |
| State\tand\tlocal(a) | 25.6 | 15.4 | 50.2 |
| Foreign | 64.4 | 57.1 | 53.9 |
|  | 216.6 | 230.0 | 354.8 |
| Deferred: |  |  |  |
| Federal | (15.3) | 10.0 | (99.2) |
| State\tand\tlocal | (7.4) | 3.9 | (12.8) |
| Foreign | (12.4) | (21.6) | (0.4) |
|  | (35.1) | (7.7) | (112.4) |
| Total\tprovision\tfor\tincome\ttaxes | $181.5 | $222.3 | $242.4 |

(a) Excludes	federal,	state	and	local	tax	benefits	of	approximately	$12	million	in	Fiscal	2009,	$34	million	in	Fiscal	2008	and	$33	million	in	Fiscal	2007	resulting	from	the	exercise	of	employee	stock	options.	In addition,	excludes	federal,	state	and	local	tax	benefits	of	$31	million	for	Fiscal	2007	primarily	related	to	the	repayment	of	the	approximate	€227	million	principal	amount	of	6.125%	notes	outstanding	that	were	due on	November	22,	2006,	from	an	original	issuance	of	€275	million	in	1999	(the	"1999	Euro	Debt").	Such	amounts	were	credited	to	stockholders'	equity.

# Tax	Rate	Reconciliation

The	differences	between	income	taxes	expected	at	the	U.S.	federal	statutory	income	tax	rate	of	35%	and	income	taxes	provided	are	as	set	forth	below:

|  | March	28, | March	29, | March	31, |
| :--- | :--- | :--- | :--- |
|  | 2009 | 2008 | 2007 |
|  |  | (millions) |  |
| Provision\tfor\tincome\ttaxes\tat\tthe\tU.S.\tfederal\tstatutory\trate | $205.6 | $224.7 | $225.1 |
| Increase\t(decrease)\tdue\tto: |  |  |  |
| State\tand\tlocal\tincome\ttaxes,\tnet\tof\tfederal\tbenefit | 11.9 | 12.2 | 25.7 |
|  | (40.1) | (22.3) | (11.2) |
| Other | 4.1 | 7.7 | 2.8 |
| Total\tprovision\tfor\tincome\ttaxes | $181.5 | $222.3 | $242.4 |

The	Company's	effective	tax	rate	is	lower	than	the	statutory	rate	principally	as	a	result	of	the	proportion	of	earnings	generated	in	lower	taxed	foreign	jurisdictions	versus	the	U.S.

# Deferred	Taxes

Significant	components	of	the	Company's	net	deferred	tax	assets	(liabilities)	are	as	follows:

|  | March	28,<br>2009 | March	29,<br>2008 |
| :--- | :--- | :--- |
|  | (millions) |  |
| Current\tdeferred\ttax\tassets\t(liabilities): |  |  |
| Receivable\tallowances\tand\treserves | $40.2 | $30.2 |
| Inventory\tbasis\tdifference | 21.5 | 19.0 |
| Other | 36.4 | 25.6 |
| Net\toperating\tlosses\tand\tother\ttax\tattributed\tcarryforwards | 0.1 | 2.1 |
| Valuation\tallowance | — | (0.3) |
| Net\tcurrent\tdeferred\ttax\tassets\t(liabilities)(a) | 98.2 | 76.6 |
| Non-current\tdeferred\ttax\tassets\t(liabilities): |  |  |
| Property,\tplant\tand\tequipment | 62.1 | 42.5 |
| Goodwill\tand\tother\tintangible\tassets | (153.8) | (142.0) |
| Net\toperating\tlosses\tcarryforwards | 9.7 | 3.2 |
| Cumulative\ttranslation\tadjustment\tand\thedges | 0.6 | 20.4 |
| Deferred\tcompensation | 56.4 | 61.0 |
| Deferred\tincome | 56.4 | 58.4 |
| Unrecogized\ttax\tbenefits | 37.7 | 39.1 |
| Other | 16.7 | 10.2 |
| Valuation\tallowance | (5.6) | (0.8) |
| Net\tnon-current\tdeferred\ttax\tassets\t(liabilities)(b) | 80.2 | 92.0 |
| Net\tdeferred\ttax\tassets\t(liabilities) | $178.4 | $168.6 |

(a) Net	current	deferred	tax	balance	as	of	March	28,	2009	included	current	deferred	tax	liabilities	of	$3.6	million	included	within	accrued	expenses	and	other	in	the	consolidated	balance	sheet.

(b) Net	non-current	deferred	tax	balances	as	of	March	28,	2009	and	March	29,	2008	were	comprised	of	non-current	deferred	tax	assets	of	$102.8	million	and	$116.9	million,	respectively,	included	within	deferred	tax assets,	and	non-current	deferred	tax	liabilities	of	$22.6	million	and	$24.9	million,	respectively,	included	within	other	non-current	liabilities	in	the	consolidated	balance	sheets.

The	Company	has	available	federal,	state	and	foreign	net	operating	loss	carryforwards	of	$0.5	million,	$6.8	million	and	$13.8	million,	respectively,	for	tax	purposes	to	offset	future	taxable income.	The	net	operating	loss	carryforwards	expire	beginning	in	Fiscal	2010.	The	utilization	of	the	federal	net	operating	loss	carryforwards	is	subject	to	the	limitations	of	Internal	Revenue	Code Section	382,	which	applies	following	certain	changes	in	ownership	of	the	entity	generating	the	loss	carryforward.

Also,	the	Company	has	available	state	and	foreign	net	operating	loss	carryforwards	of	$7.9	million	and	$11.0	million,	respectively,	for	which	no	net	deferred	tax	asset	has	been	recognized.	A	full valuation	allowance	has	been	recorded	since	management	does	not	believe	that	the	Company	will	more	likely	than	not	be	able	to	utilize	these	carryforwards	to	offset	future	taxable	income.	Subsequent recognition	of	these	deferred	tax	assets	would	result	in	an	income	tax	benefit	in	the	year	of	such	recognition.	The	valuation	allowance	increased	by	$4.5	million	in	Fiscal	2009	as	a	result	of	the	inability	to utilize	certain	foreign	net	operating	loss	carryforwards.

Provision	has	not	been	made	for	U.S.	or	additional	foreign	taxes	on	$841.4	million	of	undistributed	earnings	of	foreign	subsidiaries.	Those	earnings	have	been	and	are	expected	to	continue	to	be reinvested.	These	earnings	could	become	subject	to	tax	if	they	were	remitted	as	dividends,	if	foreign	earnings	were	lent	to	Polo	Ralph	Lauren	Corporation	("PRLC"),	a	subsidiary	or	a	U.S.	affiliate	of PRLC,	or	if	the	stock	of	the	subsidiaries	were	sold.	Determination	of	the	amount	of	unrecognized	deferred	tax	liability	with	respect	to	such	earnings	is	not	practical.	Management	believes	that	the	amount of	the	additional	taxes	that	might	be	payable	on	the	earnings	of	foreign	subsidiaries,	if	remitted,	would	be	partially	offset	by	U.S.	foreign	tax	credits.

# Uncertain	Income	Tax	Benefits

# Impact	of	FIN	48	Adoption

As	a	result	of	the	adoption	of	FIN	48,	the	Company	recognized	a	$62.5	million	reduction	in	retained	earnings	as	the	cumulative	effect	to	adjust	its	net	liability	for	unrecognized	tax	benefits	as	of April	1,	2007.	This	adjustment	consisted	of	a	$99.9	million	increase	to	the	Company's	liabilities	for	unrecognized	tax	benefits,	offset	in	part	by	a	$37.4	million	increase	to	the	Company's	deferred	tax assets	principally	representing	the	value	of	future	tax	benefits	that	could	be	realized	at	the	U.S.	federal	level	if	the	related	liabilities	for	unrecognized	tax	benefits	at	the	state	and	local	levels	ultimately	are required	to	be	settled.	The	total	balance	of	unrecognized	tax	benefits,	including	interest	and	penalties,	was	$173.8	million	as	of	April	1,	2007.

The	Company	classifies	interest	and	penalties	related	to	unrecognized	tax	benefits	as	part	of	its	provision	for	income	taxes.	Accordingly,	included	in	the	liability	for	unrecognized	tax	benefits	was a	liability	for	interest	and	penalties	in	the	amount	of	$45.7	million	as	of	April	1,	2007.

A	reconciliation	of	the	beginning	and	ending	amounts	of	unrecognized	tax	benefits,	excluding	interest	and	penalties,	for	Fiscal	2009	and	Fiscal	2008	is	presented	below:

A	reconciliation	of	the	beginning	and	ending	amounts	of	accrued	interest	and	penalties	related	to	unrecognized	tax	benefits	for	Fiscal	2009	and	Fiscal	2008	is	presented	below:

|  | March	28,<br>2009 | March	29,<br>2008 |
| :--- | :--- | :--- |
|  | (millions) |  |
| Accrued\tinterest\tand\tpenalties\tbeginning\tbalance | $48.0 | $45.7 |
| Additions\t(reductions)\tcharged\tto\texpense | (0.8) | 7.6 |
| Reductions\trelated\tto\tsettlements\twith\ttaxing\tauthorities | (5.1) | (5.1) |
| Reductions\trelated\tto\texpiration\tof\tstatutes\tof\tlimitations | — | (1.4) |
| Additions\t(reductions)\tcharged\tto\tforeign\tcurrency\ttranslation | (1.0) | 1.2 |
| Accrued\tinterest\tand\tpenalties\tending\tbalance | $41.1 | $48.0 |

The	total	amount	of	unrecognized	tax	benefits,	including	interest	and	penalties,	was	$154.8	million	as	of	March	28,	2009	and	was	included	within	non-current	liability	for	unrecognized	tax benefits	in	the	consolidated	balance	sheet.	The	total	amount	of	unrecognized	tax	benefits,	including	interest	and	penalties,	was	$165.5	million	as	of	March	29,	2008,	of	which	$10.3	was	included	within accrued	expenses	and	other	and	$155.2	million	was	included	within	non-current	liability	for	unrecognized	tax	benefits	in	the	consolidated	balance	sheet.	The	total	amount	of	unrecognized	tax	benefits that,	if	recognized,	would	affect	the	Company's	effective	tax	rate	was	$117.1	million	as	of	March	28,	2009	and	$123.6	million	as	of	March	29,	2008.

# Future	Changes	in	Unrecognized	Tax	Benefits

The	total	amount	of	unrecognized	tax	benefits	relating	to	the	Company's	tax	positions	is	subject	to	change	based	on	future	events	including,	but	not	limited	to,	the	settlements	of	ongoing	audits and/or	the	expiration	of	applicable	statutes	of	limitations.	Although	the	outcomes	and	timing	of	such	events	are	highly	uncertain,	it	is	reasonably	possible	that	the	balance	of	gross	unrecognized	tax benefits,	excluding	interest	and	penalties,	could	potentially	be	reduced	by	up	to	approximately	$25	million	during	the	next	12	months.	However,	changes	in	the	occurrence,	expected	outcomes	and	timing of	those	events	could	cause	the	Company's	current	estimate	to	change	materially	in	the	future.

The	Company	files	tax	returns	in	the	U.S.	federal	and	various	state,	local	and	foreign	jurisdictions.	With	few	exceptions	for	those	tax	returns,	the	Company	is	no	longer	subject	to	examinations	by the	relevant	tax	authorities	for	years	prior	to	Fiscal	2000.

Debt	consists	of	the	following:

|  | March	28,<br>2009<br>(millions) | March	29,<br>2008 |
| :--- | :--- | :--- |
| Revolving\tcredit\tfacility | $—\t $— | $—\t $— |
| 1.2%\tYen-denominated\tterm\tloan\tdue\tMay\t2008 | — | 206.4 |
| 4.5%\tEuro-denominated\tnotes\tdue\tOctober\t2013 | 406.4 | 472.8 |
| Total\tdebt | 406.4 | 679.2 |
| Less:\tcurrent\tmaturities\tof\tdebt | — | (206.4) |
| Total\tlong-term\tdebt | $406.4 | $472.8 |

The	Company	has	outstanding	approximately	€300	million	principal	amount	of	4.5%	notes	due	October	4,	2013	(the	"Euro	Debt").	The	Company	has	the	option	to	redeem	all	of	the	Euro	Debt	at any	time	at	a	redemption	price	equal	to	the	principal	amount	plus	a	premium.	The	Company	also	has	the	option	to	redeem	all	of	the	Euro	Debt	at	any	time	at	par	plus	accrued	interest	in	the	event	of	certain developments	involving	U.S.	tax	law.	Partial	redemption	of	the	Euro	Debt	is	not	permitted	in	either	instance.	In	the	event	of	a	change	of	control	of	the	Company,	each	holder	of	the	Euro	Debt	has	the option	to	require	the	Company	to	redeem	the	Euro	Debt	at	its	principal	amount	plus	accrued	interest.	The	indenture	governing	the	Euro	Debt	(the	"Indenture")	contains	certain	limited	covenants	that restrict	the	Company's	ability,	subject	to	specified	exceptions,	to	incur	liens	or	enter	into	a	sale	and	leaseback	transaction	for	any	principal	property.	The	Indenture	does	not	contain	any	financial covenants.

The	Company	may	from	time	to	time	repurchase	all	or	a	portion	of	its	Euro	Debt	in	the	open	market,	via	tender	offer	or	otherwise.

Refer	to	Note	15	for	discussion	of	the	designation	of	the	Company's	Euro	Debt	as	a	hedge	of	its	net	investment	in	certain	of	its	European	subsidiaries.

Borrowings	under	the	Credit	Facility	bear	interest,	at	the	Company's	option,	either	at	(a)	a	base	rate	determined	by	reference	to	the	higher	of	(i)	the	prime	commercial	lending	rate	of	JP	Morgan Chase	Bank,	N.A.	in	effect	from	time	to	time	and	(ii)	the	weighted-average	overnight	Federal	funds	rate	(as	published	by	the	Federal	Reserve	Bank	of	New	York)	plus	50	basis	points	or	(b)	a	LIBOR	rate in	effect	from	time	to	time,	as	adjusted	for	the	Federal	Reserve	Board's	Euro	currency	liabilities	maximum	reserve	percentage	plus	a	margin	defined	in	the	Credit	Facility

("the	applicable	margin").	The	applicable	margin	of	35	basis	points	is	subject	to	adjustment	based	on	the	Company's	credit	ratings.

Upon	the	occurrence	of	an	Event	of	Default	under	the	Credit	Facility,	the	lenders	may	cease	making	loans,	terminate	the	Credit	Facility,	and	declare	all	amounts	outstanding	to	be	immediately due	and	payable.	The	Credit	Facility	specifies	a	number	of	events	of	default	(many	of	which	are	subject	to	applicable	grace	periods),	including,	among	others,	the	failure	to	make	timely	principal	and interest	payments	or	to	satisfy	the	covenants,	including	the	financial	covenant	described	above.	Additionally,	the	Credit	Facility	provides	that	an	Event	of	Default	will	occur	if	Mr.	Ralph	Lauren,	the Company's	Chairman	and	Chief	Executive	Officer,	and	related	entities	controlled	by	Mr.	Lauren	fail	to	maintain	a	specified	minimum	percentage	of	the	voting	power	of	the	Company's	common	stock.

The	Credit	Facility	was	amended	and	restated	as	of	May	22,	2007	to	provide	for	the	addition	of	a	¥20.5	billion	loan	(the	"Term	Loan").	The	Term	Loan	was	made	to	Polo	JP	Acqui	B.V.,	a	wholly owned	subsidiary	of	the	Company,	and	was	guaranteed	by	the	Company,	as	well	as	the	other	subsidiaries	of	the	Company	which	currently	guarantee	the	Credit	Facility.	The	proceeds	of	the	Term	Loan were	used	to	finance	the	Japanese	Business	Acquisitions.	Borrowings	under	the	Term	Loan	bore	interest	at	a	fixed	rate	of	1.2%.	The	Company	repaid	the	borrowing	by	its	maturity	date	on	May	22,	2008 using	$196.8	million	of	Impact	21's	cash	on-hand	acquired	as	part	of	the	acquisition.	See	Note	5	for	further	discussion	of	the	Japanese	Business	Acquisitions.

# Fair	Value	of	Debt

Based	on	the	prevailing	level	of	market	interest	rates	as	of	March	28,	2009	and	March	29,	2008,	the	carrying	value	of	the	Company's	Euro	Debt	exceeded	its	fair	value	by	approximately $86	million	and	$50	million,	respectively.	As	of	March	31,	2008,	the	carrying	value	of	the	Company's	Term	Loan	approximated	its	fair	value.	Unrealized	gains	or	losses	on	debt	do	not	result	in	the realization	or	expenditure	of	cash,	unless	the	debt	is	retired	prior	to	its	maturity.

# 15. Financial	Instruments

FAS	157	establishes	a	three-level	valuation	hierarchy	for	disclosure	of	fair	value	measurements.	The	determination	of	the	applicable	level	within	the	hierarchy	of	a	particular	asset	or	liability depends	on	the	inputs

used	in	valuation	as	of	the	measurement	date,	notably	the	extent	to	which	the	inputs	are	market-based	(observable)	or	internally	derived	(unobservable).	The	three	levels	are	defined	as	follows:

•	Level	1	—	inputs	to	the	valuation	methodology	based	on	quoted	prices	(unadjusted)	for	identical	assets	or	liabilities	in	active	markets.

•	Level	2	—	inputs	to	the	valuation	methodology	based	on	quoted	prices	for	similar	assets	and	liabilities	in	active	markets	for	substantially	the	full	term	of	the	financial	instrument;	quoted prices	for	identical	or	similar	instruments	in	markets	that	are	not	active	for	substantially	the	full	term	of	the	financial	instrument;	and	model-derived	valuations	whose	inputs	or	significant value	drivers	are	observable.

        •	Level	3	—	inputs	to	the	valuation	methodology	based	on	unobservable	prices	or	valuation	techniques	that	are	significant	to	the	fair	value	measurement.

        A	financial	instrument's	categorization	within	the	valuation	hierarchy	is	based	upon	the	lowest	level	of	input	that	is	significant	to	the	fair	value	measurement.

        The	following	table	summarizes	the	Company's	financial	assets	and	liabilities	measured	at	fair	value	on	a	recurring	basis:

# (a) Based	on	Level	2	measurements.

Derivative	financial	instruments	designated	as	cash	flow	hedges	are	recorded	at	fair	value	in	the	Company's	consolidated	balance	sheets	and,	to	the	extent	these	instruments	are	highly	effective	at reducing	the	risk	associated	with	the	exposure	being	hedged,	the	related	unrealized	gains	or	losses	are	deferred	in	stockholders'	equity	as	a	component	of	accumulated	other	comprehensive	income.	The Company's	derivative	financial	instruments	are	valued	using	a	pricing	model,	primarily	based	on	market	observable	external	inputs	including	forward	and	spot	rates	for	foreign	currencies,	which considers	the	impact	of	the	Company's	own	credit	risk,	if	any.	The	Company	mitigates	the	impact	of	counterparty	credit	risk	by	entering	into	contracts	with	select	financial	institutions	based	on	credit ratings	and	other	factors,	adhering	to	established	limits	for	credit	exposure	and	continually	assessing	the	creditworthiness	of	counterparties.	Changes	in	counterparty	credit	risk	are	considered	in	the valuation	of	derivative	financial	instruments.	The	Company's	derivative	financial	instruments	have	been	classified	as	Level	2	assets	or	liabilities	as	of	March	28,	2009.

The	Company's	auction	rate	securities	are	classified	as	available-for-sale	securities	and	are	recorded	at	fair	value	in	the	Company's	consolidated	balance	sheets,	with	unrealized	gains	and	losses deferred	in	stockholders'	equity	as	a	component	of	accumulated	other	comprehensive	income	(loss).	Third-party	pricing	institutions	may	value	auction	rate	securities	at	par,	which	may	not	necessarily reflect	prices	that	would	be	obtained	in	the	current	market.	When	quoted	market	prices	are	unobservable,	fair	value	is	estimated	based	on	a	number	of	known	factors	and	external	pricing	data,	including known	maturity	dates,	the	coupon	rate	based	upon	the	most	recent	reset	market	clearing	rate,	the	price/yield	representing	the	average	rate	of	recently	successful	traded	securities,	and	the	total

principal	balance	of	each	security.	Auction	rate	securities	have	been	classified	as	Level	2	assets	as	of	March	28,	2009.

Cash	and	cash	equivalents,	short-term	investments	and	accounts	receivable	are	recorded	at	carrying	value,	which	approximates	fair	value.	Restricted	cash	is	reported	at	carrying	value.	The Company's	Euro	Debt,	which	is	adjusted	for	foreign	currency	fluctuations,	is	also	reported	at	carrying	value.

# Derivative	Financial	Instruments

The	Company	primarily	has	exposure	to	changes	in	foreign	currency	exchange	rates	relating	to	certain	anticipated	cash	flows	from	its	international	operations	and	possible	declines	in	the	fair value	of	reported	net	assets	of	certain	of	its	foreign	operations,	as	well	as	changes	in	the	fair	value	of	its	fixed-rate	debt	relating	to	changes	in	interest	rates.	Consequently,	the	Company	periodically	uses derivative	financial	instruments	to	manage	such	risks.

The	following	tables	summarize	the	Company's	outstanding	derivative	instruments	and	the	related	impact	on	its	consolidated	financial	statements	as	of	March	28,	2009	and	March	29,	2008:

|  | March	28, | March	29, | Sheet | Fair | Sheet | Fair | Sheet | Fair | Sheet | Fair |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Derivative\tInstrument(a) | 2009 | 2008 | Line(b)\nMarch\t28,\t2009 | Value | Line(b)\nMarch\t29,\t2008 | Value | Line(b)\nMarch\t28,\t2009 | Value | Line(b)\nMarch\t29,\t2008 | Value |
|  |  |  |  |  | (millions) |  |  |  |  |  |
| Designated\tHedges: |  |  |  |  |  |  |  |  |  |  |
| FC\t—\tInventory\tpurchases | $239.4 | $257.0 | PP | $22.5 | PP | $1.4 | AE | $(0.7) | AE | $(21.9) |
| FC\t—\tI/C\troyalty\tpayments | 89.9 | 14.2 | (e) | 3.9 | — | — | AE | (1.2) | AE | (1.0) |
| FC\t—\tInterest\tpayments | 17.9 | 19.2 | PP | 0.1 | PP | 1.9 | — | — | — | — |
| FC\t—\tI/C\tmarketing\tcontributions | 3.0 | 1.9 | — | — | PP | 0.1 | AE | (0.4) | — | — |
| FC\t—\tOperational\tobligations | 0.7 | 30.2 | PP | 0.1 | PP | 0.5 | — | — | — | — |
| Net\tInvestment\t—\tEuro\tDebt | 406.4 | 381.2 | — | — | — | — | LTD | (320.0)(c) | LTD | (423.0)(c) |
| Total\tDesignated\tHedges | $757.3 | $703.7 |  | $26.6 |  | $3.9 |  | $(322.3) |  | $(445.9) |
| Undesignated\tHedges: |  |  |  |  |  |  |  |  |  |  |
| FC\t—\tInventory\tpurchases | $16.9 | $11.7 | PP | $0.5 | — | $— | AE | $(0.3) | AE | $(0.3) |
| FC\t—\tForecasted\tsales | — | 48.2 | — | — | PP | 1.7 | — | — | — | — |
| FC\t—\tOther(d) | 15.5 | 5.0 | PP | 0.6 | — | — | AE | (0.8) | AE | (0.4) |
| Total\tUndesignated\tHedges | $32.4 | $64.9 |  | $1.1 |  | $1.7 |  | $(1.1) |  | $(0.7) |
| Total\tDerivatives | $789.7 | $768.6 |  | $27.7 |  | $5.6 |  | $(323.4) |  | (446.6) |

(a) FC	=	Forward	exchange	contracts	for	the	sale	or	purchase	of	foreign	currencies;	Euro	Debt	=	€300	million	principal	notes	due	October	2013.

(b) PP	=	Prepaid	expenses	and	other;	OA	=	Other	assets;	AE	=	Accrued	expenses	and	other;	LTD	=	Long-term	debt.

(c) The	Company's	Euro	Debt	is	reported	at	carrying	value	in	the	Company's	consolidated	balance	sheets.	The	carrying	value	of	the	Euro	Debt	was	$406.4	as	of	March	28,	2009	and	$472.8	million	as	of	March	29, 2008.

(d) Primarily	related	to	forward	foreign	exchange	contracts	entered	into	in	connection	with	the	Company's	Japanese	Business	Acquisitions	minority	squeeze-out,	as	discussed	in	Note	5.

(e) $2.6	million	included	within	PP	and	$1.3	million	included	within	OA.

|  | Gains	(Losses) |  | Gains	(Losses) | Gains	(Losses) |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  | Recognized\tin |  | Reclassified\tfrom | Reclassified\tfrom |  |
|  | OCI(b) |  | AOCI(b)\tto\tEarnings | AOCI(b)\tto\tEarnings |  |
|  | Fiscal\tYears\tEnded |  | Fiscal\tYears\tEnded | Fiscal\tYears\tEnded |  |
|  | March\t28, | March\t29, | March\t28, | March\t29, | Location\tof\tGains\t(Losses) |
| Derivative\tInstrument(a) | 2009 | 2008 | 2009 | 2008 | Reclassified\tfrom\tAOCI\tto\tEarnings |
|  |  | (millions) |  |  |  |
| Designated\tCash\tFlow\tHedges: |  |  |  |  |  |
| FC\t—\tInventory\tpurchases | $38.5 | $(25.5) | $(3.8) | $(8.4) | Cost\tof\tgoods\tsold |
| FC\t—\tI/C\troyalty\tpayments | 3.8 | (1.0) | (1.0) | (1.0) | Foreign\tcurrency\tgains\t(losses) |
| FC\t—\tInterest\tpayments | (1.2) | 1.5 | (0.7) | 1.8 | Foreign\tcurrency\tgains\t(losses) |
| FC\t—\tI/C\tmarketing\tcontributions | (0.4) | 0.1 | (0.2) | 0.2 | Foreign\tcurrency\tgains\t(losses) |
| FC\t—\tOperational\tobligations | (0.5) | 0.5 | 0.4 | — | Selling,\tgeneral\tand\tadministrative\texpenses |
|  | $40.2 | $(24.4) | $(5.3) | $(7.4) |  |
| Designated\tHedge\tof\tNet\tInvestment:\nEuro\tDebt | $66.6 | $(73.8) | $— | $— | (c) |
| Total\tDesignated\tHedges | $106.8 | $(98.2) | $(5.3) | $(7.4) |  |

| Derivative	Instrument(a) | March	28,<br>2009 |  | March	29,<br>2008 | Location	of	Gains	(Losses)<br>Recognized	in	Earnings |
| :--- | :--- | :--- | :--- | :--- |
|  |  | (millions) |  |  |
| Undesignated\tHedges: |  |  |  |  |
| FC\t—\tInventory\tpurchases | $0.5 |  | $(0.2) | Foreign\tcurrency\tgains\t(losses) |
| FC\t—\tForecasted\trevenues | 1.0 |  | 1.6 | Foreign\tcurrency\tgains\t(losses) |
| FC\t—\tOther(d) | (1.8) |  | (1.5) | Foreign\tcurrency\tgains\t(losses) |
| Total\tUndesignated\tHedges | $(0.3) |  | $(0.1) |  |

(b) Accumulated	other	comprehensive	income	("AOCI"),	including	the	respective	fiscal	year's	other	comprehensive	income	("OCI"),	is	classified	as	a	component	of	total	stockholders'	equity.

(c) To	the	extent	applicable,	to	be	recognized	as	a	gain	(loss)	on	the	sale	or	liquidation	of	the	hedged	net	investment.

Over	the	next	twelve	months,	it	is	expected	that	approximately	$23	million	of	net	gains	deferred	in	accumulated	other	comprehensive	income	related	to	foreign	currency	exchange	contracts outstanding	as	of	March	28,	2009	will	be	recognized	in	earnings.	The	Company	recognized	an	aggregate	net	gain	on	foreign	currency	exchange	contracts	in	earnings	of	approximately	$4	million	for Fiscal	2007.	The	Company	recorded	within	accumulated	other	comprehensive	income	the	translation	effects	of	the	Euro	Debt	to	U.S.	dollars,	resulting	in	an	aggregate	loss	of	$30.8	million	for	Fiscal 2007.	No	material	gains	or	losses	relating	to	ineffective	hedges	were	recognized	during	any	of	the	fiscal	years	presented.

The	following	is	a	summary	of	the	Company's	risk	management	strategies	and	the	effect	of	those	strategies	on	the	consolidated	financial	statements.

The	Company	enters	into	forward	foreign	currency	exchange	contracts	as	hedges	to	reduce	its	risk	from	exchange	rate	fluctuations	on	inventory	purchases,	intercompany	royalty	payments	made by	certain	of	its	international	operations,	intercompany	contributions	made	to	fund	certain	marketing	efforts	of	its	international	operations,	interest	payments	made	in	connection	with	outstanding	debt, other	foreign	currency-denominated	operational	obligations	including	payroll,	rent,	insurance	and	benefit	payments,	and	foreign	currency-denominated	revenues.	As	part	of	its	overall	strategy	to	manage the	level	of	exposure	to	the	risk	of	foreign	currency	exchange	rate	fluctuations,	primarily	to	changes	in	the	value	of	the	Euro,	the	Japanese	Yen,	the	Swiss	Franc,	and	the	British	Pound	Sterling,	the Company	hedges	a	portion	of	its	foreign	currency	exposures	anticipated	over	the	ensuing	twelve-month	to	two-year	periods.	In	doing	so,	the	Company	uses	foreign	currency	exchange	forward	contracts that	generally	have	maturities	of	three	months	to	two	years	to	provide	continuing	coverage	throughout	the	hedging	period.

The	Company	records	its	foreign	currency	exchange	contracts	at	fair	value	in	its	consolidated	balance	sheets.	Foreign	currency	exchange	contracts	designated	as	cash	flow	hedges	at	hedge inception	are	accounted	for	in	accordance	with	FAS	133.	As	such,	to	the	extent	these	hedges	are	effective,	the	related	gains	(losses)	are	deferred	in	stockholders'	equity	as	a	component	of	accumulated other	comprehensive	income.	These	deferred	gains	(losses)	are	then	recognized	in	our	consolidated	statements	of	operations	as	follows:

To	the	extent	that	any	of	these	foreign	currency	exchange	contracts	are	not	considered	to	be	perfectly	effective	in	offsetting	the	change	in	the	value	of	the	hedged	item,	any	changes	in	fair	value relating	to	the	ineffective	portion	are	immediately	recognized	in	earnings.	If	a	hedge	relationship	is	terminated,	the	change	in	fair	value	of	the	derivative	previously	recorded	in	accumulated	other comprehensive	income	is	realized	when	the	hedged	item	affects	earnings	consistent	with	the	original	hedging	strategy,	unless	the	forecasted	transaction	is	no	longer	probable	of	occurring	in	which	case the	accumulated	amount	is	immediately	recognized	in	earnings.	In	addition,	changes	in	fair	value	relating	to	undesignated	foreign	currency	exchange	contracts	are	immediately	recognized	in	earnings.

The	Company	designated	the	entire	principal	amount	of	its	outstanding	Euro	Debt	as	a	hedge	of	its	net	investment	in	certain	of	its	European	subsidiaries.	As	required	by	FAS	133,	the	changes	in fair	value	of	a	derivative	instrument	or	a	non-derivative	financial	instrument	(such	as	debt)	that	is	designated	as	a	hedge	of	a	net	investment	in	a	foreign	operation	are	reported	in	the	same	manner	as	a translation	adjustment	under	FAS	No.	52,	"Foreign	Currency	Translation,"	to	the	extent	it	is	effective	as	a	hedge.	As	such,	changes	in	the	fair	value	of	the	Euro	Debt	resulting	from	changes	in	the	Euro exchange	rate	have	been,	and	continue	to	be,	reported	in	stockholders'	equity	as	a	component	of	accumulated	other	comprehensive	income.

In	assessing	effectiveness,	the	Company	uses	the	spot	rate	method	of	accounting	to	value	foreign	currency	exchange	rate	changes	in	both	its	foreign	subsidiaries	and	the	derivative	designated	as	a hedge	of	a	net	investment.	If	the	notional	amount	of	the	derivative	designated	as	a	hedge	of	a	net	investment	is	greater	than	the	portion	of	the	net	investment	being	hedged,	hedge	ineffectiveness	is recognized	immediately	in	earnings.	Changes	in	the	fair	value	of	the	hedging	instrument	are	recorded	in	stockholders'	equity	as	a	component	of	accumulated	other	comprehensive	income	until	the	sale	or liquidation	of	the	hedged	net	investment.

# 16. Commitments	and	Contingencies

The	Company	operates	its	retail	stores	under	various	leasing	arrangements.	The	Company	also	occupies	various	office	and	warehouse	facilities	and	uses	certain	equipment	under	numerous	lease agreements.	Such	leasing	arrangements	are	accounted	for	under	the	provisions	of	FAS	13	as	either	operating	leases	or	capital	leases.	In	this	context,	capital	leases	include	leases	whereby	the	Company	is considered	to	have	the	substantive	risks	of	ownership	during	construction	of	a	leased	property	pursuant	to	the	provisions	of	EITF	97-10.	Information	on	the	Company's	operating	and	capital	leasing activities	is	set	forth	below.

# Operating	Leases

The	Company	is	typically	required	to	make	minimum	rental	payments,	and	often	contingent	rental	payments,	under	its	operating	leases.	Substantially	all	factory	and	full-price	retail	store	leases provide	for	contingent	rentals	based	upon	sales,	and	certain	rental	agreements	require	payment	based	solely	on	a	percentage	of	sales.	Terms	of	the	Company's	leases	generally	contain	renewal	options, rent	escalation	clauses	and	landlord	incentives.	Rent	expense,	net	of	sublease	income	which	was	not	significant,	was	approximately	$237	million	in	Fiscal	2009,	$208	million	in	Fiscal	2008	and $172	million	in	Fiscal	2007.	Such	amounts	include	contingent	rental	charges	of	approximately	$16	million	for	Fiscal	2009,	$14	million	for	Fiscal	2008	and	$12	million	for	Fiscal	2007.	In	addition	to	such amounts,	the	Company	is	normally	required	to	pay	taxes,	insurance	and	occupancy	costs	relating	to	the	leased	real	estate	properties.

        As	of	March	28,	2009,	future	minimum	rental	payments	under	noncancelable	operating	leases	with	lease	terms	in	excess	of	one	year	were	as	follows:

| As	of	March	28,	2009,	future	minimum	rental	payments	under	noncancelable	operating	leases	with	lease	terms	in	excess	of	one	year	were	as	follows: |  |
| :--- | :--- |
|  | Annual\tMinimum\nOperating\tLease\nPayments(a)\n(millions) |
| Fiscal\t2010 | $179.9 |
| Fiscal\t2011 | 167.6 |
| Fiscal\t2012 | 159.2 |
| Fiscal\t2013 | 151.9 |
| Fiscal\t2014 | 143.0 |
| Fiscal\t2015\tand\tthereafter | 831.0 |
| Total | $1,632.6 |

(a) Net	of	sublease	income,	which	is	not	significant	in	any	period.

# Capital	Leases

Assets	under	capital	leases	amounted	to	approximately	$38	million	at	the	end	of	both	Fiscal	2009	and	Fiscal	2008.	Such	assets	are	classified	within	property	and	equipment	in	the	consolidated balance	sheets.	As	of	March	28,	2009,	future	minimum	rental	payments	under	noncancelable	capital	leases	with	lease	terms	in	excess	of	one	year	were	as	follows:

# Employment	Agreements

The	Company	has	employment	agreements	with	certain	executives	in	the	normal	course	of	business	which	provide	for	compensation	and	certain	other	benefits.	These	agreements	also	provide	for severance	payments	under	certain	circumstances.

# Other	Commitments

Other	off-balance	sheet	firm	commitments,	which	include	inventory	purchase	commitments,	outstanding	letters	of	credit	and	minimum	funding	commitments	to	investees,	amounted	to approximately	$600	million	as	of	March	28,	2009.	In	addition,	as	discussed	in	Note	5,	the	Company	has	entered	into	an	agreement	to	assume	direct	control	of	its	Polo-branded	licensed	apparel	business	in Southeast	Asia	effective	January	1,	2010	in	exchange	for	a

cash	payment	of	$20	million	and	certain	other	consideration.	The	transaction	is	subject	to	certain	customary	closing	conditions.

# Litigation

# California	Class	Action	Litigation

# Wathne	Imports	Litigation

On	August	19,	2005,	Wathne	Imports,	Ltd.	("Wathne"),	our	domestic	licensee	for	luggage	and	handbags,	filed	a	complaint	in	the	U.S.	District	Court	in	the	Southern	District	of	New	York	against us	and	Ralph	Lauren,	our	Chairman	and	Chief	Executive	Officer,	asserting,	among	other	things,	federal	trademark	law	violations,	breach	of	contract,	breach	of	obligations	of	good	faith	and	fair	dealing, fraud	and	negligent	misrepresentation.	The	complaint	sought,	among	other	relief,	injunctive	relief,	compensatory	damages	in	excess	of	$250	million	and	punitive	damages	of	not	less	than	$750	million. On	September	13,	2005,	Wathne	withdrew	this	complaint	from	the	U.S.	District	Court	and	filed	a	complaint	in	the	Supreme	Court	of	the	State	of	New	York,	New	York	County,	making	substantially	the same	allegations	and	claims	(excluding	the	federal	trademark	claims),	and	seeking	similar	relief.	On	February	1,	2006,	the	court	granted	our	motion	to	dismiss	all	of	the	causes	of	action,	including	the cause	of	action	against	Mr.	Lauren,	except	for	the	breach	of	contract	claims,	and	denied	Wathne's	motion	for	a	preliminary	injunction.	We	believe	this	lawsuit	to	be	without	merit,	and	moved	for summary	judgment	on	the	remaining	claims.	Wathne	cross-moved	for	partial	summary	judgment.	A	hearing	on	these	motions	occurred	on	November	1,	2007.	The	judge	presiding	in	this	case	provided	a written	ruling	on	the	summary	judgment	motion	on	April	11,	2008.	The	Court	granted	Polo's	summary	judgment	motion	to	dismiss	in	large	measure,	and	denied	Wathne's	cross-motion.	Wathne	appealed the	dismissal	of	its	claims	and	a	hearing	in	connection	with	this	appeal	was	held	before	the	Appellate	Division	of	the	Supreme	Court	on	May	19,	2009.	A	ruling	from	the	Appellate	Division	with	respect to	this	appeal	is	not	expected	for	several	months.	A	trial	date	has	not	yet	been	established	in	connection	with	this	matter.	We	intend	to	continue	to	contest	the	remaining	claims	in	this	lawsuit	vigorously. Accordingly,	management	does	not	expect	that	the	ultimate	resolution	of	this	matter	will	have	a	material	adverse	effect	on	the	Company's	liquidity	or	financial	position.

# California	Labor	Law	Litigation

On	March	2,	2006,	a	former	employee	at	our	Club	Monaco	store	in	Los	Angeles,	California	filed	a	lawsuit	against	the	Company	in	the	San	Francisco	Superior	Court	alleging	violations	of California	wage	and	hour	laws.	The	plaintiff	purported	to	represent	a	class	of	Club	Monaco	store	employees	who	allegedly	were	injured	by	being	improperly	classified	as	exempt	employees	and	thereby did	not	receive	compensation	for	overtime	and	did	not	receive	meal	and	rest	breaks.	The	complaint	sought	an	unspecified	amount	of	compensatory	damages,

disgorgement	of	profits,	attorneys'	fees	and	injunctive	relief.	On	August	21,	2007,	eleven	former	and	then	current	employees	of	the	Company's	Club	Monaco	stores	in	California	filed	a	lawsuit	in	Los Angeles	Superior	Court	alleging	similar	claims	as	the	Club	Monaco	action	in	San	Francisco.	The	complaint	sought	an	unspecified	amount	of	compensatory	damages,	attorneys'	fees	and	punitive damages.	The	parties	to	these	two	Club	Monaco	litigations	agreed	to	retain	a	mediator	in	an	effort	to	resolve	both	matters	and	agreed	to	settle	all	claims	involving	both	litigations	at	an	aggregate	cost	of $1.2	million.	The	terms	of	the	settlement	were	recently	approved	by	both	the	Los	Angeles	and	San	Francisco	courts.

On	May	30,	2006,	four	former	employees	of	our	Ralph	Lauren	stores	in	Palo	Alto	and	San	Francisco,	California	filed	a	lawsuit	in	the	San	Francisco	Superior	Court	alleging	violations	of California	wage	and	hour	laws.	The	plaintiffs	purport	to	represent	a	class	of	employees	who	allegedly	have	been	injured	by	not	properly	being	paid	commission	earnings,	not	being	paid	overtime,	not receiving	rest	breaks,	being	forced	to	work	off	of	the	clock	while	waiting	to	enter	or	leave	the	store	and	being	falsely	imprisoned	while	waiting	to	leave	the	store.	The	complaint	seeks	an	unspecified amount	of	compensatory	damages,	damages	for	emotional	distress,	disgorgement	of	profits,	punitive	damages,	attorneys'	fees	and	injunctive	and	declaratory	relief.	We	have	filed	a	cross-claim	against one	of	the	plaintiffs	for	his	role	in	allegedly	assisting	a	former	employee	to	misappropriate	Company	property.	Subsequent	to	answering	the	complaint,	we	had	the	action	moved	to	the	United	States District	Court	for	the	Northern	District	of	California.	On	July	8,	2008,	the	United	States	District	Court	for	the	Northern	District	of	California	granted	plaintiffs'	motion	for	class	certification.	We	believe this	suit	is	without	merit	and	intend	to	contest	it	vigorously.	Accordingly,	management	does	not	expect	that	the	ultimate	resolution	of	this	matter	will	have	a	material	adverse	effect	on	the	Company's liquidity	or	financial	position.

# Club	Monaco	International	Licensing	Litigation

# Credit	Card	Matter

# Other	Matters

# 17. Stockholders'	Equity

# Capital	Stock

The	Company's	capital	stock	consists	of	two	classes	of	common	stock.	There	are	500	million	shares	of	Class	A	common	stock	and	100	million	shares	of	Class	B	common	stock	authorized	to	be issued.	Shares	of	Class	A	and	Class	B	common	stock	have	substantially	identical	rights,	except	with	respect	to	voting	rights.	Holders	of	Class	A	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	both	classes	of	stock	vote	together	as	a	single	class	on	all	matters	presented	to	the	stockholders	for	their	approval,	except with	respect	to	the	election	and	removal	of	directors	or	as	otherwise	required	by	applicable	law.	All	outstanding	shares	of	Class	B	common	stock	are	owned	by	Mr.	Ralph	Lauren,	Chairman	and	Chief Executive	Officer,	and	related	entities.

Since	2003,	the	Company	has	maintained	a	regular	quarterly	cash	dividend	of	$0.05	per	share,	or	$0.20	per	share	on	an	annual	basis,	on	its	common	stock.	Dividends	paid	amounted	to $19.9	million	in	Fiscal	2009,	$20.5	million	in	Fiscal	2008	and	$20.9	million	in	Fiscal	2007.

# 18. Accumulated	Other	Comprehensive	Income

The	following	summary	sets	forth	the	components	of	other	comprehensive	income	(loss),	net	of	tax,	accumulated	in	stockholders'	equity:

|  | Foreign<br>Currency<br>Translation<br>Gains<br>(Losses) | Net	Unrealized<br>Gains	(Losses)<br>on	Derivative<br>Financial<br>Instruments(a) | Net	Unrealized<br>Gains	(Losses)<br>on	Available-<br>for-Sale<br>Investments | Unrealized<br>Gains<br>(Losses)	on<br>Defined<br>Benefit	Plans | Total<br>Accumulated<br>Other<br>Comprehensive<br>Income	(Loss) |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  | (millions) |  |  |
| Balance\tat\tApril\t1,\t2006 | $61.0 | $(45.5) | $—\t $— | $—\t $— | $15.5 |
| Fiscal\t2007\tpretax\tactivity(b) | 53.1 | (34.8) | — | — | 18.3 |
| Fiscal\t2007\ttax\tbenefit\t(provision)(b) | 1.2 | 5.5 | — | — | 6.7 |
| Balance\tat\tMarch\t31,\t2007 | 115.3 | (74.8) | — | — | 40.5 |
| Fiscal\t2008\tpretax\tactivity(c) | 144.7 | (90.8) | (0.4) | (0.2) | 53.3 |
| Fiscal\t2008\ttax\tbenefit\t(provision)(c) | (8.9) | 27.5 | 0.2 | — | 18.8 |
| Balance\tat\tMarch\t29,\t2008 | 251.1 | (138.1) | (0.2) | (0.2) | 112.6 |
| Fiscal\t2009\tpretax\tactivity(d) | (75.5) | 112.1 | 0.4 | (0.6) | 36.4 |
| Fiscal\t2009\ttax\tbenefit\t(provision)(d) | 5.8 | (28.0) | (0.1) | 0.1 | (22.2) |
| Balance\tat\tMarch\t28,\t2009 | $181.4 | $(54.0) | $0.1 | $(0.7) | $126.8 |

(a) Includes	deferred	gains	and	losses	on	hedging	instruments,	such	as	foreign	currency	exchange	contracts	designated	as	cash	flow	hedges	and	changes	in	the	fair	value	of	the	Company's	Euro-denominated	debt	designated	as	a	hedge	of changes	in	the	fair	value	of	the	Company's	net	investment	in	certain	of	its	European	subsidiaries.

(b) Includes	a	net	reclassification	adjustment	of	$3.1	million	(net	of	$0.5	million	tax	effect)	for	realized	derivative	financial	instrument	gains	in	the	current	period	that	were	included	as	an	unrealized	gain	in	comprehensive	income	in	a prior	period.

(c) Includes	a	net	reclassification	adjustment	of	$6.6	million	(net	of	$1.2	million	tax	effect)	for	realized	derivative	financial	instrument	losses	in	the	current	period	that	were	included	as	an	unrealized	loss	in	comprehensive	income	in	a prior	period.

(d) Includes	a	net	reclassification	adjustment	of	$20.3	million	(net	of	$1.1	million	tax	effect)	for	realized	derivative	financial	instrument	losses	in	the	current	period	that	were	included	as	an	unrealized	loss	in	comprehensive	income	in	a prior	period.

# Long-term	Stock	Incentive	Plan

The	Company's	1997	Long-Term	Stock	Incentive	Plan,	as	amended	and	restated	(the	"1997	Plan"),	authorizes	the	grant	of	awards	to	participants	with	respect	to	a	maximum	of	26.0	million shares	of	the	Company's	Class	A	common	stock;	however,	there	are	limits	as	to	the	number	of	shares	available	for	certain	awards	and	to	any	one	participant.	Equity	awards	that	may	be	made	under	the 1997	Plan	include	(a)	stock	options,	(b)	restricted	stock	and	(c)	restricted	stock	units	("RSUs").	The	Company	also	granted	awards	under	the	1997	Non-Employee	Director	Option	Plan	prior	to	that	plan's expiration	on	December	31,	2006.	No	future	awards	will	be	made	under	the	1997	Non-Employee	Director	Option	Plan.

# Impact	on	Results

A	summary	of	the	total	compensation	expense	and	associated	income	tax	benefits	recognized	related	to	stock-based	compensation	arrangements	is	as	follows:

| Compensation	expense | $(49.7) | $(70.7) | $(43.6) |
| :--- | :--- | :--- | :--- |
| Income\ttax\tbenefit | $18.5 | $20.2 | $17.5 |

Stock	options	are	granted	to	employees	and	non-employee	directors	with	exercise	prices	equal	to	fair	market	value	at	the	date	of	grant.	Generally,	the	options	become	exercisable	ratably	(a graded-vesting	schedule),	over	a	three-year	vesting	period.	Stock	options	generally	expire	seven	years	from	the	date	of	grant.	The	Company	recognizes	compensation	expense	for	share-based	awards	that have	graded	vesting	and	no	performance	conditions	on	an	accelerated	basis.	The	Company	uses	the	Black-Scholes	option-pricing	model	to	estimate	the	fair	value	of	stock	options	granted,	which	requires the	input	of	both	subjective	and	objective	assumptions	as	follows:

Expected	Term	—	The	estimate	of	expected	term	is	based	on	the	historical	exercise	behavior	of	employees	and	non-employee	directors,	as	well	as	the	contractual	life	of	the	option	grants.

Expected	Volatility	—	The	expected	volatility	factor	is	based	on	the	historical	volatility	of	the	Company's	common	stock	for	a	period	equal	to	the	stock	option's	expected	term.

Expected	Dividend	Yield	—	The	expected	dividend	yield	is	based	on	the	regular	quarterly	cash	dividend	of	$0.05	per	share.

Risk-free	Interest	Rate	—	The	risk-free	interest	rate	is	determined	using	the	implied	yield	for	a	traded	zero-coupon	U.S.	Treasury	bond	with	a	term	equal	to	the	option's	expected	term.

The	Company's	weighted-average	assumptions	used	to	estimate	the	fair	value	of	stock	options	granted	during	the	fiscal	years	presented	were	as	follows:

|  | March	28,<br>2009 | March	29,<br>2008 | March	31,<br>2007 |
| :--- | :--- | :--- | :--- |
| Expected\tterm\t(years) | 4.3 | 4.8 | 4.5 |
| Expected\tvolatility | 32.1% | 29.9% | 33.2% |
| Expected\tdividend\tyield | 0.29% | 0.26% | 0.39% |
| Risk-free\tinterest\trate | 3.0% | 4.6% | 4.9% |
| Weighted-average\toption\tgrant\tdate\tfair\tvalue | $17.27 | $32.65 | $19.40 |

A	summary	of	the	stock	option	activity	under	all	plans	during	Fiscal	2009	is	as	follows:

|  | Number	of<br>Shares<br>(thousands) | Weighted-<br>Average<br>Exercise<br>Price | Average<br>Remaining<br>Contractual<br>Term<br>(years) | Aggregate<br>Intrinsic<br>Value(a)<br>(millions) |
| :--- | :--- | :--- | :--- | :--- |
| Options\toutstanding\tat\tMarch\t29,\t2008 | 6,011 | $39.93 | 5.3 | $132.8 |
| Granted | 861 | 57.52 |  |  |
| Exercised | (1,048) | 27.64 |  |  |
| Cancelled/Forfeited | (126) | 66.84 |  |  |
| Options\toutstanding\tat\tMarch\t28,\t2009 | 5,698 | $44.22 | 4.8 | $50.0 |
| Options\tvested\tand\texpected\tto\tvest\tat\tMarch\t28,\t2009(b) | 5,611 | $43.97 | 4.8 | $50.0 |
| Options\texercisable\tat\tMarch\t28,\t2009 | 4,246 | $36.22 | 4.4 | $49.9 |

(a) The	intrinsic	value	is	the	amount	by	which	the	market	price	at	the	end	of	the	period	of	the	underlying	share	of	stock	exceeds	the	exercise	price	of	the	stock	option.

(b) The	number	of	options	expected	to	vest	takes	into	consideration	estimated	expected	forfeitures.

Additional	information	pertaining	to	the	Company's	stock	option	plans	is	as	follows:

|  | March	28, | March	29, | March	31, |
| :--- | :--- | :--- | :--- |
|  | 2009 | 2008 | 2007 |
|  |  | (millions) |  |
| Aggregate\tintrinsic\tvalue\tof\tstock\toptions\texercised(a) | $33.2 | $67.0 | $88.7 |
| Cash\treceived\tfrom\tthe\texercise\tof\tstock\toptions | 29.0 | 40.1 | 51.4 |
| Tax\tbenefits\trealized\ton\texercise | 12.1 | 34.4 | 33.2 |

(a) The	intrinsic	value	is	the	amount	by	which	the	average	market	price	during	the	period	exceeded	the	exercise	price	of	the	stock	option	exercised.

As	of	March	28,	2009,	there	was	$11.3	million	of	total	unrecognized	compensation	expense	related	to	nonvested	stock	options	granted,	expected	to	be	recognized	over	a	weighted-average	period of	1.4	years.

# Restricted	Stock	and	RSUs

The	Company	grants	restricted	shares	of	Class	A	common	stock	and	service-based	RSUs	to	certain	of	its	senior	executives	and	non-employee	directors.	In	addition,	the	Company	grants performance-based	RSUs	to	such	senior	executives	and	other	key	executives,	and	certain	other	employees	of	the	Company.

Restricted	shares	of	Class	A	common	stock,	which	entitle	the	holder	to	receive	a	specified	number	of	shares	of	Class	A	common	stock	at	the	end	of	a	vesting	period,	are	accounted	for	at	fair value	at	the	date	of	grant.	In	addition,	holders	of	restricted	shares	are	entitled	to	receive	cash	dividends	in	connection	with	the	payments	of	dividends	on	the	Company's	Class	A	common	stock.	Generally, restricted	stock	grants	vest	over	a	five-year	period	of	time,	subject	to	the	executive's	continuing	employment.	Restricted	stock	shares	granted	to	non-employee	directors	vest	over	a	three-year	period	of time.

RSUs	entitle	the	grantee	to	receive	shares	of	Class	A	common	stock	at	the	end	of	a	vesting	period.	Service-based	RSUs	are	payable	in	shares	of	Class	A	common	stock	and	generally	vest	over	a five-year	period	of	time,	subject	to	the	executive's	continuing	employment.	Performance-based	RSUs	also	are	payable	in	shares	of	Class	A	common	stock	and	generally	vest	(a)	upon	the	completion	of	a three-year	period	of	time	(cliff	vesting),	subject	to	the

employee's	continuing	employment	and	the	Company's	achievement	of	certain	performance	goals	over	the	three-year	period	or	(b)	ratably,	over	a	three-year	period	of	time	(graded	vesting),	subject	to	the employee's	continuing	employment	during	the	applicable	vesting	period	and	the	achievement	by	the	Company	of	certain	performance	goals	either	(i)	in	each	year	of	the	vesting	period	for	grants	made prior	to	Fiscal	2008	or	(ii)	solely	in	the	initial	year	of	the	vesting	period	for	grants	made	in	and	after	Fiscal	2008.	In	addition,	holders	of	certain	RSUs	are	entitled	to	receive	dividend	equivalents	in	the form	of	additional	RSUs	in	connection	with	the	payment	of	dividends	on	the	Company's	Class	A	common	stock.	RSUs,	including	shares	resulting	from	dividend	equivalents	paid	on	such	units,	are accounted	for	at	fair	value	at	the	date	of	grant.	The	fair	value	of	a	restricted	security	is	based	on	the	fair	value	of	unrestricted	Class	A	common	stock,	as	adjusted	to	reflect	the	absence	of	dividends	for those	restricted	securities	that	are	not	entitled	to	dividend	equivalents.	Compensation	expense	for	performance-based	RSUs	is	recognized	over	the	related	service	period	when	attainment	of	the performance	goals	is	deemed	probable.

A	summary	of	the	restricted	stock	and	restricted	stock	unit	activity	during	Fiscal	2009	is	as	follows:

|  | Restricted |  | Service-based |  | Performance-based | Performance-based |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Stock | Stock | RSUs | RSUs | RSUs | RSUs |
|  |  | Weighted- |  | Weighted- | Weighted- | Weighted- |
|  |  | Average |  | Average | Average | Average |
|  | Number\tof | Grant\tDate | Number\tof | Grant\tDate | Number\tof | Grant\tDate |
|  | Shares | Fair\tValue | Shares | Fair\tValue | Shares | Fair\tValue |
|  | (thousands) |  | (thousands) |  | (thousands) |  |
| Nonvested\tat\tMarch\t29,\t2008 | 34 | $42.60 | 667 | $47.55 | 1,354 | $65.41 |
| Granted | 7 | 59.22 | 178 | 64.12 | 533 | 57.48 |
| Vested | (17) | 40.86 | (186) | 29.33 | (616) | 52.62 |
| Cancelled | (1) | 68.14 | — | — | (103) | 61.68 |
| Nonvested\tat\tMarch\t28,\t2009 | 23 | $47.58 | 659 | $57.15 | 1,168 | $71.67 |

|  | Restricted<br>Stock | Service-based<br>RSUs | Performance-based<br>RSUs |
| :--- | :--- | :--- | :--- |
| Total\tunrecognized\tcompensation\tat\tMarch\t28,\t2009\t(millions) | $0.5 | $10.7 | $31.4 |
| Weighted-average\tyears\texpected\tto\tbe\trecognized\tover\t(years) | 0.8 | 2.5 | 1.4 |

Additional	information	pertaining	to	the	restricted	stock	and	restricted	stock	unit	activity	is	as	follows:

|  | March	28,<br>2009 | March	29,<br>2008 | March	31,<br>2007 |
| :--- | :--- | :--- | :--- |
| Restricted\tStock |  |  |  |
| Weighted-average\tgrant\tdate\tfair\tvalue\tof\tawards\tgranted | $59.22 | $87.85 | $— |
| Total\tfair\tvalue\tof\tawards\tvested\t(millions) | 1.1 | 7.1 | 4.2 |
| Service-based\tRSUs |  |  |  |
| Weighted-average\tgrant\tdate\tfair\tvalue\tof\tawards\tgranted | $64.12 | $100.56 | $55.43 |
| Total\tfair\tvalue\tof\tawards\tvested\t(millions) | 10.2 | 4.8 | — |
| Performance-based\tRSUs |  |  |  |
| Weighted-average\tgrant\tdate\tfair\tvalue\tof\tawards\tgranted | $57.48 | $86.98 | $55.17 |
| Total\tfair\tvalue\tof\tawards\tvested\t(millions) | 40.8 | 43.4 | 3.4 |

# 20. Employee	Benefit	Plans

# Profit	Sharing	Retirement	Savings	Plans

The	Company	sponsors	two	defined	contribution	benefit	plans	covering	substantially	all	eligible	U.S.	employees	not	covered	by	a	collective	bargaining	agreement.	The	plans	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	salary	contributed by	an	employee.

Under	the	terms	of	the	plans,	a	participant	is	100%	vested	in	Company	matching	and	discretionary	contributions	after	five	years	of	credited	service.	Contributions	made	by	the	Company	under these	plans	approximated	$6	million	in	both	Fiscal	2009	and	Fiscal	2008,	and	$4	million	in	Fiscal	2007.

# Supplemental	Retirement	Plan

The	Company	has	a	non-qualified	supplemental	retirement	plan	for	certain	highly	compensated	employees	whose	benefits	under	the	401(k)	profit	sharing	retirement	savings	plans	are	expected	to be	constrained	by	the	operation	of	certain	Internal	Revenue	Code	limitations.	These	supplemental	benefits	vest	over	time	and	the	related	compensation	expense	is	recognized	over	the	vesting	period.

In	August	2008,	the	Company	amended	its	non-qualified	supplemental	retirement	plan.	The	amendments	included	a	suspension	of	the	annual	contributions	for	substantially	all	plan	participants effective	for	Fiscal	2009.	Further,	affected	participants	were	provided	with	a	one-time	election	to	either	withdraw	all	benefits	vested	in	the	plan	in	a	lump	sum	amount	during	the	first	quarter	of	Fiscal 2010	or	remain	in	the	plan	and	receive	future	distributions	of	benefits	vested	over	a	5-year	period.

The	amount	accrued	under	this	plan	was	$29	million	as	of	March	28,	2009,	comprised	of	$18	million	classified	within	accrued	expenses	and	other	and	$11	million	classified	within	other	non- current	liabilities	in	the	consolidated	balance	sheets.	An	amount	of	$29	million	was	accrued	under	this	plan	as	of	March	29,	2008	and	was	classified	within	other	non-current	liabilities	in	the	consolidated balance	sheet.	Total	compensation	expense	recognized	related	to	these	benefits	was	$2	million,	$4	million	and	$3	million	in	Fiscal	2009,	Fiscal	2008	and	Fiscal	2007,	respectively.

# Deferred	Compensation	Plans

The	Company	has	deferred	compensation	arrangements	for	certain	key	executives	which	generally	provide	for	payments	upon	retirement,	death	or	termination	of	employment.	The	amounts accrued	under	these	plans	were	approximately	$2	million	as	of	both	March	28,	2009	and	March	29,	2008,	and	were	classified	within	other	non-current	liabilities	in	the	consolidated	balance	sheets.	Total compensation	expense	related	to	these	compensation	arrangements	was	$0.3	million	in	each	of	the	three	fiscal	years	presented.	The	Company	funds	a	portion	of	these	obligations	through	the establishment	of	trust	accounts	on	behalf	of	the	executives	participating	in	the	plans.	The	trust	accounts	are	classified	within	other	assets	in	the	consolidated	balance	sheets.

# Union	Pension	Plan

The	Company	participates	in	a	multi-employer	pension	plan	and	is	required	to	make	contributions	to	the	UNITE	HERE	(which	was	previously	known	as	the	Union	of	Needletrades,	Industrial	and Textile	Employees,	prior	to	its	merger	with	the	Hotel	Employees	and	Restaurant	Employees	International	Union)	("Union")	for	dues	based	on	wages	paid	to	union	employees.	A	portion	of	these	dues	is allocated	by	the	Union	to	a	retirement	fund	which	provides	defined	benefits	to	substantially	all	unionized	workers.	The	Company	does	not	participate	in	the	management	of	the	plan	and	has	not	been furnished	with	information	with	respect	to	the	type	of	benefits	provided,	vested	and	non-vested	benefits	or	assets.

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	a	non-affiliated	licensee.	The	Company	has	no current	intention	of	withdrawing	from	the	plan.

# International	Defined	Benefit	Plans

The	Company	sponsors	certain	single-employer	defined	benefit	plans	and	participates	in	a	multi-employer	defined	benefit	plan	at	international	locations,	which	are	not	considered	to	be	material individually	or	in	the	aggregate.	Pension	benefits	under	these	plans	are	based	on	formulas	that	reflect	the	employees'	years	of	service	and	compensation	levels	during	their	employment	period.	The aggregate	funded	status	of	the	single-employer	defined	benefit	plans	were	net	liabilities	of	$7.3	million	and	$6.6	million	as	of	March	28,	2009	and	March	29,	2008,	respectively,	primarily	recorded	within other	non-current	liabilities	in	the	Company's	consolidated	balance	sheets.	These	single-employer	defined	benefit	plans	had	aggregate	projected	benefit	obligations	of	$26.9	million	and	aggregate	fair values	of	plan	assets	of	$22.9	million	as	of	March	28,	2009,	compared	to	projected	benefit	obligations	of	$21.3	million	and	fair	values	of	plan	assets	of	$18.8	million	as	of	March	29,	2008.	Pension expense	for	these	plans,	recorded	within	SG&A	expenses	in	the	Company's	consolidated	statements	of	operations,	was	$4.0	million	in	Fiscal	2009,	$3.6	million	in	Fiscal	2008	and	$2.2	million	in	Fiscal 2007.

On	March	31,	2009,	the	Company	withdrew	from	the	remaining	multi-employer	defined	benefit	plan	assumed	in	the	Japanese	Business	Acquisitions.	A	related	withdrawal	liability	of approximately	$4	million	is	classified	within	other	non-current	liabilities	in	the	Company's	consolidated	balance	sheets	as	of	March	28,	2009	and	March	29,	2008.	Total	contributions	to	the	multi- employer	plan	were	$0.6	million	and	$0.5	million	in	Fiscal	2009	and	Fiscal	2008,	respectively.	The	Company	did	not	participate	in	any	multi-employer	defined	benefit	plans	in	Fiscal	2007.

On	April	1,	2009,	the	Company	integrated	all	of	its	Japanese	single-employer	defined	benefit	plans	into	one	defined	contribution	and	cash	balance	plan	(the	"Integrated	Japan	Pension	Plan").	The opening	balance	of	the	projected	benefit	obligation	for	the	Integrated	Japan	Pension	Plan	was	approximately	$6.0	million.	As	a	result	of	this	integration,	certain	of	the	Company's	pre-existing	Japanese single-employer	defined	benefit	plans	were	settled.	The	Company	expects	to	record	a	related	settlement	charge	of	approximately	$0.4	million	in	the	consolidated	statement	of	operations	during	the	first quarter	of	Fiscal	2010.

# 21. Segment	Information

The	Company	has	three	reportable	segments	based	on	its	business	activities	and	organization:	Wholesale,	Retail	and	Licensing.	Such	segments	offer	a	variety	of	products	through	different channels	of	distribution.	The	Wholesale	segment	consists	of	women's,	men's	and	children's	apparel,	accessories	and	related	products	which	are	sold	to	major	department	stores,	specialty	stores,	golf	and pro	shops	and	the	Company's	owned	and	licensed	retail	stores	in	the	U.S.	and	overseas.	The	Retail	segment	consists	of	the	Company's	worldwide	retail	operations,	which	sell	products	through	its	full- price	and	factory	stores,	as	well	as	RalphLauren.com	and	Rugby.com,	its	e-commerce	websites.	The	stores	and	websites	sell	products	purchased	from	the	Company's	licensees,	suppliers	and	Wholesale segment.	The	Licensing	segment	generates	revenues	from	royalties	earned	on	the	sale	of	the	Company's	apparel,	home	and	other	products	internationally	and	domestically	through	licensing	alliances. The	licensing	agreements	grant	the	licensees	rights	to	use	the	Company's	various	trademarks	in	connection	with	the	manufacture	and	sale	of	designated	products	in	specified	geographical	areas	for specified	periods.

The	accounting	policies	of	the	Company's	segments	are	consistent	with	those	described	in	Note	3.	Sales	and	transfers	between	segments	generally	are	recorded	at	cost	and	treated	as	transfers	of inventory.	All	intercompany	revenues	are	eliminated	in	consolidation	and	are	not	reviewed	when	evaluating	segment	performance.	Each	segment's	performance	is	evaluated	based	upon	operating	income before	restructuring	charges	and	certain	other	one-time	items,	such	as	legal	charges,	if	any.	Corporate	overhead	expenses	(exclusive	of	certain	expenses	for	senior

management,	overall	branding-related	expenses	and	certain	other	corporate-related	expenses)	are	allocated	to	the	segments	based	upon	specific	usage	or	other	allocation	methods.

Net	revenues	and	operating	income	for	each	segment	are	as	follows:

|  | March	28, | March	29, | March	31, |
| :--- | :--- | :--- | :--- |
|  | 2009 | 2008 | 2007 |
|  |  | (millions) |  |
| Net\trevenues: |  |  |  |
| Wholesale | $2,887.2 | $2,758.1 | $2,315.9 |
| Retail | 1,936.5 | 1,912.6 | 1,743.2 |
| Licensing | 195.2 | 209.4 | 236.3 |
| Total\tnet\trevenues | $5,018.9 | $4,880.1 | $4,295.4 |

(a) Fiscal	2009	and	Fiscal	2008	included	certain	asset	impairment	charges.	Fiscal	2009	included	asset	impairment	charges	of	$55.4	million,	of	which	$52.0	million	related	to	the	write-down	of	certain	Retail	store	assets,	and	$2.8	million in	the	Wholesale	segment	and	$0.6	million	in	the	Corporate	office	related	to	the	write-down	of	certain	capitalized	software	costs.	Fiscal	2008	included	asset	impairment	charges	of	$5.0	million	related	to	the	write-down	of	certain Retail	store	assets	(see	Note	11	for	further	discussion).

(b) Fiscal	2009	included	certain	unallocated	restructuring	charges	and	legal-related	activity.	Restructuring	charges	for	Fiscal	2009	consisted	of	$23.6	million,	of	which	$12.7	million	related	to	the	Retail	segment,	$7.3	million	related	to the	Wholesale	segment	and	$3.6	million	related	to	Corporate	operations.	Fiscal	2007	restructuring	charges	of	$4.6	million	primarily	related	to	the	Retail	segment	(see	Note	12	for	further	discussion).	Legal-related	activity	related	to the	Company's	Credit	Card	Matter	(see	Note	16	for	further	discussion)	and	consisted	of	the	reversal	of	excess	reserves	in	the	amounts	of	$0.5	million	for	Fiscal	2009	and	$4.1	million	for	Fiscal	2008,	as	well	as	legal	charges	of $3.0	million	for	Fiscal	2007	.

Depreciation	and	amortization	expense	and	capital	expenditures	for	each	segment	are	as	follows:

|  | March	28, | March	29, | March	31, |
| :--- | :--- | :--- | :--- |
|  | 2009 | 2008 | 2007 |
|  |  | (millions) |  |
| Depreciation\tand\tamortization: |  |  |  |
| Wholesale | $55.5 | $63.9 | $47.0 |
| Retail | 80.7 | 73.4 | 59.0 |
| Licensing | 2.4 | 19.7 | 4.4 |
| Unallocated\tcorporate\texpenses | 45.8 | 44.3 | 34.3 |
| Total\tdepreciation\tand\tamortization | $184.4 | $201.3 | $144.7 |
|  |  | Fiscal\tYears\tEnded |  |
|  | March\t28, | March\t29, | March\t31, |

|  | 2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- |
|  |  | (millions) |  |
| Capital\texpenditures: |  |  |  |
| Wholesale | $35.5 | $46.0 | $44.6 |
| Retail | 110.8 | 116.1 | 83.1 |
| Licensing | 1.1 | 2.4 | 3.0 |
| Corporate | 37.6 | 52.6 | 53.3 |
| Total\tcapital\texpenditures | $185.0 | $217.1 | $184.0 |

Total	assets	for	each	segment	are	as	follows:

|  | March	28,<br>2009 | March	29,<br>2008 |
| :--- | :--- | :--- |
|  | (millions) |  |
| Total\tassets: |  |  |
| Wholesale | $2,731.5 | $2,434.2 |
| Retail | 968.8 | 1,084.9 |
| Licensing | 207.9 | 216.4 |
| Corporate | 448.3 | 630.0 |
| Total\tassets | $4,356.5 | $4,365.5 |

Net	revenues	and	long-lived	assets	by	geographic	location	of	the	reporting	subsidiary	are	as	follows:

|  | March	28, | March	29, | March	31, |
| :--- | :--- | :--- | :--- |
|  | 2009 | 2008 | 2007 |
|  |  | (millions) |  |
| Net\trevenues: |  |  |  |
| United\tStates\tand\tCanada | $3,589.3 | $3,653.1 | $3,452.2 |
| Europe | 1,028.4 | 944.7 | 767.9 |
| Japan | 392.6 | 272.4 | 64.6 |
| Other\tregions | 8.6 | 9.9 | 10.7 |
| Total\tnet\trevenues | $5,018.9 | $4,880.1 | $4,295.4 |

|  | March	28,<br>2009 | March	29,<br>2008 |
| :--- | :--- | :--- |
|  | (millions) |  |
| Long-lived\tassets: |  |  |
| United\tStates\tand\tCanada | $452.8 | $517.1 |
| Europe | 132.7 | 131.1 |
| Japan | 60.9 | 57.3 |
| Other\tregions | 5.2 | 4.4 |
| Total\tlong-lived\tassets | $651.6 | $709.9 |

# 22. Related	Party	Transactions

In	the	ordinary	course	of	conducting	its	business,	the	Company	periodically	enters	into	transactions	with	other	entities	or	people	that	are	considered	related	parties.

In	connection	with	the	launch	of	the	RL	Watch	Company	business,	the	Company	will	begin	to	receive	royalty	payments	pursuant	to	a	related	licensing	agreement	that	allows	the	RL	Watch Company	to	sell	luxury	watches	and	fine	jewelry	throughout	the	world	using	certain	of	the	Company's	trademarks.	The	Company	has	a	50%	interest	in	the	RL	Watch	Company,	which	is	accounted	for under	the	equity	method	of	accounting.	See	Note	3	for	further	discussion	of	the	Company's	investment	in	the	RL	Watch	Company.

Prior	to	the	Japanese	Business	Acquisitions	that	occurred	in	May	2007,	the	Company	received	royalty	payments	pursuant	to	a	licensing	agreement	with	Impact	21	that	allowed	Impact	21	to	sell high	quality	apparel	and	related	merchandise	in	Japan	using	certain	of	the	Company's	trademarks.	The	Company	had	an	approximately	20%	interest	in	Impact	21,	which	was	accounted	for	under	the equity	method	of	accounting.	Royalty	payments	received	under	this	arrangement	were	approximately	$34	million	in	Fiscal	2007.	See	Note	5	for	further	discussion	of	the	Company's	Japanese	Business Acquisitions.

In	addition,	Mr.	Ralph	Lauren,	the	Company's	Chairman	and	Chief	Executive	Officer,	sometimes	used	the	services	of	certain	employees	of	the	Company	for	non-Company	related	purposes	in Fiscal	2008	and	Fiscal	2007.	Mr.	Lauren	reimbursed	the	Company	for	the	direct	expenses	incurred	in	connection	with	those	services,	including	an	allocation	of	such	employees'	salaries	and	benefits. Such	aggregate	costs	and	related	reimbursements	were	less	than	$1	million	in	both	Fiscal	2008	and	Fiscal	2007.	No	related	services	were	provided	by	the	Company	to	Mr.	Lauren	in	Fiscal	2009.

# 23. Additional	Financial	Information

# Cash	Interest	and	Taxes

|  | March	28,<br>2009 | March	29,<br>2008<br>(millions) | March	31,<br>2007 |
| :--- | :--- | :--- | :--- |
| Cash\tpaid\tfor\tinterest | $25.1 | $22.9 | $20.9 |
| Cash\tpaid\tfor\tincome\ttaxes | $165.0 | $248.8 | $244.6 |

# Non-cash	Transactions

Significant	non-cash	investing	activities	included	the	capitalization	of	fixed	assets	and	recognition	of	related	obligations	in	the	net	amount	of	$13.0	million	for	Fiscal	2009	and	$39.8	million	for Fiscal	2008.	Significant	non-cash	investing	activities	also	included	the	non-cash	allocation	of	the	fair	value	of	the	net	assets	acquired	in	connection	with	the	Japanese	Childrenswear	and	Golf	Acquisition in	Fiscal	2009,	the	Japanese	Business	Acquisitions	and	the	Small	Leathergoods	Business	Acquisition	in	Fiscal	2008,	and	the	RL	Media	Minority	Interest	Acquisition	in	Fiscal	2007.	See	Note	5	for	further discussion	of	the	Company's	acquisitions.

Significant	non-cash	financing	activities	included	the	repurchase	of	0.4	million	shares	of	Class	A	common	stock	at	a	cost	of	$24.0	million	that	was	traded	prior	to	the	end	of	Fiscal	2008	for	which settlement	occurred	in	April	2008.	In	addition,	as	a	result	of	the	adoption	of	FIN	48,	the	Company	recognized	a	non-cash	reduction	in	retained	earnings	of	$62.5	million	as	the	cumulative	effect	to	adjust its	net	liability	for	unrecognized	tax	benefits	as	of	April	1,	2007.

There	were	no	other	significant	non-cash	investing	or	financing	activities	for	the	three	fiscal	years	presented.

# Licensing-related	Transactions

# Eyewear	Licensing	Agreement

In	February	2006,	the	Company	announced	that	it	had	entered	into	a	ten-year	exclusive	licensing	agreement	with	Luxottica	Group,	S.p.A.	and	affiliates	for	the	design,	production,	sale	and distribution	of	prescription	frames	and	sunglasses	under	the	Polo	Ralph	Lauren	brand	(the	"Eyewear	Licensing	Agreement").

The	Eyewear	Licensing	Agreement	took	effect	on	January	1,	2007	after	the	Company's	pre-existing	licensing	agreement	with	another	licensee	expired.	In	early	January,	the	Company	received	a prepayment	of	approximately	$180	million,	net	of	certain	tax	withholdings,	in	consideration	of	the	annual	minimum	royalty	and	design-services	fees	to	be	earned	over	the	life	of	the	contract.	The prepayment	is	non-refundable,	except	with	respect	to	certain	breaches	of	the	agreement	by	the	Company,	in	which	case	only	the	unearned	portion	of	the	prepayment	as	determined	based	on	the	specific terms	of	the	agreement	would	be	required	to	be	repaid.	The	prepayment	was	recorded	by	the	Company	as	deferred	income	and	is	being	recognized	in	earnings	as	earned	in	accordance	with	the	terms	of the	agreement	based	upon	the	higher	of	(a)	contractually	guaranteed	minimum	royalty	levels	or	(b)	estimates	of	sales	and	royalty	data	received	from	the	licensee.

# Underwear	Licensing	Agreement

The	Company	licensed	the	right	to	manufacture	and	sell	Chaps-branded	underwear	under	a	long-term	license	agreement,	which	was	scheduled	to	expire	in	December	2009.	During	Fiscal	2007, the	Company	and	the	licensee	agreed	to	terminate	the	licensing	and	related	design-services	agreements.	In	connection	with	this	agreement,	the	Company	received	a	portion	of	the	minimum	royalty	and design-service	fees	due	to	it	under	the	underlying	agreements	on	an	accelerated	basis.	The	approximate	$8	million	of	proceeds	received	by	the	Company	has	been	recognized	as	licensing	revenue	in	the consolidated	financial	statements	for	Fiscal	2007.

# MANAGEMENT'S	RESPONSIBILITY	FOR	FINANCIAL	STATEMENTS

The	management	of	Polo	Ralph	Lauren	Corporation	is	responsible	for	the	preparation,	objectivity	and	integrity	of	the	consolidated	financial	statements	and	other	information	contained	in	this Annual	Report.	The	consolidated	financial	statements	have	been	prepared	in	accordance	with	accounting	principles	generally	accepted	in	the	United	States	and	include	some	amounts	that	are	based	on management's	informed	judgments	and	best	estimates.

These	consolidated	financial	statements	have	been	audited	by	Ernst	&	Young	LLP	in	Fiscal	2009	and	by	Deloitte	&	Touche	LLP	in	Fiscal	2008	and	Fiscal	2007,	both	of	which	are	independent registered	public	accounting	firms.	They	conducted	their	audits	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States)	and	have	expressed	herein	their unqualified	opinions	on	those	financial	statements.

The	Audit	Committee	of	the	Board	of	Directors,	which	oversees	all	of	the	Company's	financial	reporting	process	on	behalf	of	the	Board	of	Directors,	consists	solely	of	independent	directors, meets	with	the	independent	registered	accountants,	internal	auditors	and	management	periodically	to	review	their	respective	activities	and	the	discharge	of	their	respective	responsibilities.	Both	the independent	registered	public	accountants	and	the	internal	auditors	have	unrestricted	access	to	the	Audit	Committee,	with	or	without	management,	to	discuss	the	scope	and	results	of	their	audits	and	any recommendations	regarding	the	system	of	internal	controls.

/S/		RALPH	LAUREN

Ralph	Lauren

Chairman	and	Chief	Executive	Officer

/S/		TRACEY	T.	TRAVIS

Tracey	T.	Travis

Senior	Vice	President	and	Chief	Financial	Officer

# REPORT	OF	INDEPENDENT	REGISTERED	PUBLIC	ACCOUNTING	FIRM

# To	the	Board	of	Directors	and	Stockholders	of

We	have	audited	the	accompanying	consolidated	balance	sheet	of	Polo	Ralph	Lauren	Corporation	and	subsidiaries	(the	"Company")	as	of	March	28,	2009,	and	the	related	consolidated	statement of	operations,	stockholders'	equity,	and	cash	flows	for	the	fiscal	year	then	ended.	These	financial	statements	are	the	responsibility	of	the	Company's	management.	Our	responsibility	is	to	express	an opinion	on	the	financial	statements	based	on	our	audit.

We	conducted	our	audit	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States).	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,	the	financial	statements	referred	to	above	present	fairly,	in	all	material	respects,	the	consolidated	financial	position	of	the	Company	at	March	28,	2009,	and	the	consolidated	results of	its	operations	and	its	cash	flows	for	the	fiscal	year	then	ended,	in	conformity	with	U.S.	generally	accepted	accounting	principles.

We	also	have	audited,	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States),	the	Company's	internal	control	over	financial	reporting	as	of March	28,	2009,	based	on	the	criteria	established	in	Internal	Control	—	Integrated	Framework	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission	and	our	report	dated May	26,	2009	expressed	an	unqualified	opinion	thereon.

New	York,	New	York

We	have	audited	the	accompanying	consolidated	balance	sheet	of	Polo	Ralph	Lauren	Corporation	and	subsidiaries	(the	"Company")	as	of	March	29,	2008,	and	the	related	consolidated	statements of	operations,	stockholders'	equity,	and	cash	flows	for	each	of	the	two	fiscal	years	in	the	period	ended	March	29,	2008.	These	financial	statements	are	the	responsibility	of	the	Company's	management. Our	responsibility	is	to	express	an	opinion	on	the	financial	statements	based	on	our	audits.

We	conducted	our	audits	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States).	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,	such	consolidated	financial	statements	present	fairly,	in	all	material	respects,	the	financial	position	of	the	Company	as	of	March	29,	2008,	and	the	results	of	its	operations	and	its cash	flows	for	each	of	the	two	fiscal	years	in	the	period	ended	March	29,	2008,	in	conformity	with	accounting	principles	generally	accepted	in	the	United	States	of	America.

As	discussed	in	Note	3	to	the	notes	to	consolidated	financial	statements,	the	Company	adopted	Financial	Accounting	Standards	Board	Interpretation	No.	48,	"Accounting	for	Uncertainty	in Income	Taxes",	effective	April	1,	2007.	Also,	as	discussed	in	Note	4	to	the	notes	to	consolidated	financial	statements,	the	Company	elected	application	of	Staff	Accounting	Bulletin	No.	108, "Considering	the	Effects	of	Prior	Year	Misstatements	when	Quantifying	Misstatements	in	Current	Year	Financial	Statements",	effective	April	2,	2006.

# /s/		DELOITTE	&	TOUCHE	LLP

We	have	audited	Polo	Ralph	Lauren	Corporation	and	subsidiaries'	(the	"Company's")	internal	control	over	financial	reporting	as	of	March	28,	2009,	based	on	criteria	established	in	Internal Control	—	Integrated	Framework	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission	(the	"COSO	criteria").	The	Company's	management	is	responsible	for	maintaining effective	internal	control	over	financial	reporting,	and	for	its	assessment	of	the	effectiveness	of	internal	control	over	financial	reporting,	included	in	the	accompanying	Management's	Report	of	Internal Control	Over	Financial	Reporting.	Our	responsibility	is	to	express	an	opinion	on	the	Company's	internal	control	over	financial	reporting	based	on	our	audit.

We	conducted	our	audit	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States).	Those	standards	require	that	we	plan	and	perform	the	audit	to obtain	reasonable	assurance	about	whether	effective	internal	control	over	financial	reporting	was	maintained	in	all	material	respects.	Our	audit	included	obtaining	an	understanding	of	internal	control	over financial	reporting,	assessing	the	risk	that	a	material	weakness	exists,	testing	and	evaluating	the	design	and	operating	effectiveness	of	internal	control	based	on	the	assessed	risk,	and	performing	such	other procedures	as	we	considered	necessary	in	the	circumstances.	We	believe	that	our	audit	provides	a	reasonable	basis	for	our	opinion.

A	company's	internal	control	over	financial	reporting	is	a	process	designed	to	provide	reasonable	assurance	regarding	the	reliability	of	financial	reporting	and	the	preparation	of	financial statements	for	external	purposes	in	accordance	with	generally	accepted	accounting	principles.	A	company's	internal	control	over	financial	reporting	includes	those	policies	and	procedures	that	(1)	pertain to	the	maintenance	of	records	that,	in	reasonable	detail,	accurately	and	fairly	reflect	the	transactions	and	dispositions	of	the	assets	of	the	company;	(2)	provide	reasonable	assurance	that	transactions	are recorded	as	necessary	to	permit	preparation	of	financial	statements	in	accordance	with	generally	accepted	accounting	principles,	and	that	receipts	and	expenditures	of	the	company	are	being	made	only	in accordance	with	authorizations	of	management	and	directors	of	the	company;	and	(3)	provide	reasonable	assurance	regarding	prevention	or	timely	detection	of	unauthorized	acquisition,	use,	or disposition	of	the	company's	assets	that	could	have	a	material	effect	on	the	financial	statements.

Because	of	its	inherent	limitations,	internal	control	over	financial	reporting	may	not	prevent	or	detect	misstatements.	Also,	projections	of	any	evaluation	of	effectiveness	to	future	periods	are subject	to	the	risk	that	the	controls	may	become	inadequate	because	of	changes	in	conditions,	or	that	the	degree	of	compliance	with	the	policies	or	procedures	may	deteriorate.

In	our	opinion,	the	Company	maintained,	in	all	material	respects,	effective	internal	control	over	financial	reporting	as	of	March	28,	2009,	based	on	the	COSO	criteria.

We	also	have	audited,	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States),	the	consolidated	balance	sheet	of	the	Company	as	of	March	28,	2009, and	the	related	consolidated	statements	of	operations,	stockholders'	equity,	and	cash	flows	for	the	fiscal	year	then	ended	and	our	report	dated	May	26,	2009	expressed	an	unqualified	opinion	thereon.

# SELECTED	FINANCIAL	INFORMATION

The	following	table	sets	forth	selected	historical	financial	information	as	of	the	dates	and	for	the	periods	indicated.

The	consolidated	statement	of	operations	data	for	each	of	the	three	fiscal	years	in	the	period	ended	March	28,	2009	as	well	as	the	consolidated	balance	sheet	data	as	of	March	28,	2009	and March	29,	2008	have	been	derived	from,	and	should	be	read	in	conjunction	with,	the	audited	financial	statements	and	other	financial	information	presented	elsewhere	herein.	The	consolidated	statement of	operations	data	for	each	of	the	two	fiscal	years	in	the	period	ended	April	1,	2006	and	the	consolidated	balance	sheet	data	at	March	31,	2007,	April	1,	2006	and	April	2,	2005	have	been	derived	from audited	financial	statements	not	included	herein.	Capitalized	terms	are	as	defined	and	described	in	the	consolidated	financial	statements	or	elsewhere	herein.	The	historical	results	are	not	necessarily indicative	of	the	results	to	be	expected	in	any	future	period.

The	selected	financial	information	for	the	fiscal	year	ended	March	28,	2009	reflects	the	Japanese	Childrenswear	and	Golf	Acquisition	effective	in	August	2008.	The	selected	financial	information for	the	fiscal	year	ended	March	29,	2008	reflects	the	acquisition	of	the	Small	Leathergoods	Business	effective	in	April	2007,	the	Japanese	Business	Acquisitions	effective	in	May	2007,	and	the	adoption of	FIN	48.	The	selected	financial	information	for	the	fiscal	year	ended	March	31,	2007	reflects	the	acquisition	of	the	remaining	50%	equity	interest	of	RL	Media	effective	in	March	2007	and	the	adoption of	FAS	123R.	The	selected	financial	information	for	the	fiscal	year	ended	April	1,	2006	reflects	the	acquisition	of	the	formerly-licensed	Polo	Jeans	business	effective	in	February	2006	and	the	acquisition of	the	formerly-licensed	footwear	business	effective	in	July	2005.	The	selected	financial	information	for	the	fiscal	year	ended	April	2,	2005	reflects	the	acquisition	of	the	formerly-licensed	childrenswear business	effective	in	July	2004.

|  | March	28,<br>2009 | March	29,<br>2008 | March	31,<br>2007 | April	1,<br>2006 | April	2,<br>2005 |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  | (millions,\texcept\tper\tshare\tdata) |  |  |
| Statement\tof\tOperations\tData: |  |  |  |  |  |
| Net\trevenues: |  |  |  |  |  |
| Net\tsales | $4,823.7 | $4,670.7 | $4,059.1 | $3,501.1 | $3,060.7 |
| Licensing\trevenues | 195.2 | 209.4 | 236.3 | 245.2 | 244.7 |
| Net\trevenues | 5,018.9 | 4,880.1 | 4,295.4 | 3,746.3 | 3,305.4 |
| Gross\tprofit | 2,730.7 | 2,638.1 | 2,336.2 | 2,022.4 | 1,684.5 |
| Depreciation\tand\tamortization\texpense | (184.4) | (201.3) | (144.7) | (127.0) | (102.1) |
| Impairments\tof\tassets | (55.4) | (5.0) | — | (10.8) | (1.5) |
| Restructuring\tcharges | (23.6) | — | (4.6) | (9.0) | (2.3) |
| Operating\tincome(a) | 595.5 | 653.4 | 652.6 | 516.6 | 299.7 |
| Interest\tincome/(expense),\tnet | (4.6) | (1.0) | 4.5 | 1.2 | (6.4) |
| Net\tincome | $406.0 | $419.8 | $400.9 | $308.0 | $190.4 |
| Net\tincome\tper\tcommon\tshare: |  |  |  |  |  |
| Basic | $4.09 | $4.10 | $3.84 | $2.96 | $1.88 |
| Diluted | $4.01 | $3.99 | $3.73 | $2.87 | $1.83 |
| Average\tcommon\tshares: |  |  |  |  |  |
| Basic | 99.2 | 102.3 | 104.4 | 104.2 | 101.5 |
| Diluted | 101.3 | 105.2 | 107.6 | 107.2 | 104.1 |
| Dividends\tdeclared\tper\tcommon\tshare | $0.20 | $0.20 | $0.20 | $0.20 | $0.20 |

(a) Operating	income	included	reversals	of	excess	reserves	related	to	credit	card	matters	in	the	amounts	of	$0.5	million	in	Fiscal	2009	and	approximately	$4	million	in	Fiscal	2008;	and	litigation	and	credit	card	contingency-related charges	of	approximately	$3	million	in	Fiscal	2007,	$7	million	in	Fiscal	2006	and	$106	million	in	Fiscal	2005.

# POLO	RALPH	LAUREN	CORPORATION	SELECTED	FINANCIAL	INFORMATION	—	(Continued)

|  | March	28,<br>2009 | March	29,<br>2008 | March	31,<br>2007 | April	1,<br>2006 | April	2,<br>2005 |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  | (millions) |  |  |
| Balance\tSheet\tData: |  |  |  |  |  |
| Cash\tand\tcash\tequivalents | $481.2 | $551.5 | $563.9 | $285.7 | $350.5 |
| Short-term\tinvestments | 338.7 | 74.3 | — | — | — |
| Working\tcapital | 1,382.6 | 984.9 | 1,045.6 | 535.0 | 791.4 |
| Total\tassets | 4,356.5 | 4,365.5 | 3,758.0 | 3,088.7 | 2,726.7 |
| Total\tdebt\t(including\tcurrent\tmaturities\tof\tdebt) | 406.4 | 679.2 | 398.8 | 280.4 | 291.0 |
| Stockholders'\tequity | 2,735.1 | 2,389.7 | 2,334.9 | 2,049.6 | 1,675.7 |

# QUARTERLY	FINANCIAL	INFORMATION	(UNAUDITED)

The	following	table	sets	forth	the	quarterly	financial	information	of	the	Company:

|  | June	28, | September	27, | December	27, | March	28, |
| :--- | :--- | :--- | :--- | :--- |
| Fiscal\t2009 | 2008 | 2008 | 2008 | 2009(a) |
|  |  | (millions,\texcept\tper\tshare\tdata) | (millions,\texcept\tper\tshare\tdata) |  |
| Net\trevenues | $1,113.6 | $1,428.9 | $1,252.0 | $1,224.4 |
| Gross\tprofit | 638.4 | 788.2 | 669.7 | 634.4 |
| Net\tincome | 95.2 | 161.0 | 105.3 | 44.5 |
| Net\tincome\tper\tcommon\tshare:(b) |  |  |  |  |
| Basic | $0.96 | $1.62 | $1.07 | $0.45 |
| Diluted | $0.93 | $1.58 | $1.05 | $0.44 |
| Dividends\tdeclared\tper\tcommon\tshare | $0.05 | $0.05 | $0.05 | $0.05 |

|  | June	30, | September	29, | December	29, | March	29, |
| :--- | :--- | :--- | :--- | :--- |
| Fiscal\t2008 | 2007 | 2007 | 2007 | 2008 |
|  |  | (millions,\texcept\tper\tshare\tdata) | (millions,\texcept\tper\tshare\tdata) |  |
| Net\trevenues | $1,070.3 | $1,299.1 | $1,269.8 | $1,240.9 |
| Gross\tprofit | 592.0 | 695.2 | 676.5 | 674.4 |
| Net\tincome | 88.3 | 115.3 | 112.7 | 103.5 |
| Net\tincome\tper\tcommon\tshare:(b) |  |  |  |  |
| Basic | $0.85 | $1.12 | $1.11 | $1.03 |
| Diluted | $0.82 | $1.09 | $1.08 | $1.00 |
| Dividends\tdeclared\tper\tcommon\tshare | $0.05 | $0.05 | $0.05 | $0.05 |

(a) Net	income	and	net	income	per	common	share	for	the	fourth	quarter	of	Fiscal	2009	have	been	affected	by	approximately	$69	million	of	pretax	charges	related	to	asset	impairments	and	restructurings.

(b) Per	common	share	amounts	for	the	quarters	and	full	years	have	been	calculated	separately.	Accordingly,	quarterly	amounts	may	not	add	to	the	annual	amount	because	of	differences	in	the	average	common	shares	outstanding	during each	period.



Question: what percentage of factory retail stores as of march 29 , 2008 where located in europe?
Calculation: factory_stores_eu = 22
total_factory_stores = 158
percent_factory_stores_eu = factory_stores_eu / total_factory_stores
answer = percent_factory_stores_eu * 100
Answer: 14%