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Home Holds Back Polo Profit

A decline in home royalties proved a drag on Polo Ralph Lauren Corporation's licensing revenues during the first quarter ended June 28. Polo's quarterly licensing revenues rose 1% to $47 million. Revenue from the expanding American Living program at JCPenney, Chaps royalties from Kohl's and growth in U.S. royalties in men's underwear helped offset the decline in overall home licensing volume, the company reported last week.

The Chaps program at Kohl's — men's, women's, kids' and home — is "outstanding," Polo president and ceo Roger Farah told analysts during the conference call. Sales "continue to run well ahead of plan. In our third year with Chaps we really understand that customer, and we're getting the kind of sell-throughs that everybody feels good about, even in a tough environment."

American Living, which launched as a JCP captive brand in February in apparel and home, has had some strong business categories and some "we're still learning from," Farah said, without specifying. "We're now next week showing spring [2009] merchandise to Penney's, and I think that will incorporate our learnings."

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