Ralph Lauren loves to tell a story about his earliest days in the clothing business. It was 1967. He had designed some ties, wider than most and made of unconventional fabrics, and was selling them to a few stores in Manhattan under the new brand name he had chosen, Polo. He especially wanted to sell them to Bloomingdale’s—“the hottest store in America,” he recalled as he told the story to a group of investors and Wall Street analysts more than 50 years later. The Bloomingdale’s buyer said he liked the ties and would buy them if Lauren did two things: make them slightly narrower and remove his own label from the back, replacing it with the Bloomingdale’s label. “I was really dying to sell Bloomingdale's,” he said. But faced with the opportunity, he refused. “I wasn't going to change the ties, and I didn't, and I walked out,” Lauren said. “I thought my legs would crumble.”

Six months later, Bloomingdale’s called and said yes.

That was a turning point in Lauren’s life. “Had I changed that tie, I would not be here today,” he told the Wall Street crowd. And he drew a profound lesson from the experience: “I believed in myself.”

Believing in himself has worked spectacularly well for Lauren, a self-made billionaire and arguably the most successful fashion designer who has ever lived. He built his success on the brand he created, a brand that began its ascent on the day Bloomingdale’s called back. He expanded it beyond the Polo name to include his own name, and beyond ties to embrace men’s, women’s, and children’s clothing, accessories, home furnishings, restaurants, even coffee—a brand of greater scale and scope than the industry had ever seen.

The company is one of only two in the Fortune 500 whose name is simply the first name and last name of a living founder; the other is Charles Schwab. (To avoid confusion, we’ll call the man Lauren, the company RL Corp.) It is quite likely the only company that sends the Securities and Exchange Commission a required annual filing that opens with a full-page photo of the executive chairman on a horse, wearing a beat-up canvas coat, leather gloves, and a cowboy hat. But then, why not? The man, the brand, and the company have always been intertwined.

At age 80 Lauren has earned every right to be enjoying a victory lap, and indeed this past February he had just emerged triumphantly from a self-inflicted crisis in the brand’s value—only for the business then to be hammered by the coronavirus. In three short months the stock has fallen from $115 to $70 as physical sales have ground to a halt. (The company declined to make executives available for interviews, saying, “Our entire team is fully focused on protecting the safety and well-being of our teams and ensuring we are in a position of strength throughout and following this crisis.”)

Now, as he enters his ninth decade, Lauren is facing a triple threat: navigating his dreamy brand through a nightmarish pandemic, proving that e-commerce is a viable path forward for this storied luxury brand, and continuing to develop a brand that is relevant to millennials and Gen Z, not just their parents.

As with everything about his business, this challenge is intensely personal for Lauren. He owns most of his company’s stock and thus holds total control. Though the company has had two outside CEOs in recent years, there has never been much doubt who is really in charge. After RL Corp. announced the arrival of one leader in 2015, Lauren sent all employees a memo that read in part: “The Ralph Lauren Corporation is the Company I founded, nurtured, and love. I will continue to lead it today as I have for almost 50 years. I am not stepping down, nor am I stepping back. I am stepping up.”

Win or lose, whatever happens next, it’s all on him.

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A mature brand

To understand where RL Corp. is now, you need to go back a few years, to when the brand was riding high. From 2010 to 2015 revenue rocketed 53%, to $7.6 billion. Other companies would miss earnings targets or experience mysterious inventory snafus, but not RL Corp. And while the business churned out profits, Lauren continued to sell an impossibly idealized world. “He’s got a movie running in his head all the time,” explains Roger Farah, Lauren’s No. 2 executive from 2000 to 2014. “Everything emanates from that—the product, the stores, the marketing, the showrooms.” Ralph Lauren doesn’t just design clothes. He directs movies, creating an alternative cosmos that’s an irresistible escape from real life. He even lives there, or seems to. His 19,000-acre Colorado ranch; his manorial estate in Bedford, N.Y.; the weathered beach house on Long Island; his collection of the world’s most elegant, perfectly restored cars—they’ve been running themes in his marketing and publicity for decades. As he once said, “I don’t do shoulders. I do worlds.”

By 2015, says retail consultant Steven Dennis, the question the company was facing was this: “As a mature brand, where do you go for growth?” RL Corp.’s answer was, you go to the channels that are growing. At that time, “growth was largely at the discount end of the market,” says Kathy Gersch, a retail veteran with experience at Nordstrom and e-commerce companies. Stores such as T.J. Maxx and Marshalls were doing well, as were mid-tier department stores such as Macy’s and Dillard’s. So RL Corp. fed those channels.

Macy’s was most important, accounting for 12% of total sales at the time. “The years from 2010 to 2014 were the best years in Macy’s history,” says Terry Lundgren, the chain’s then-CEO. “I remember reaching the billion-dollar mark for Ralph Lauren at Macy’s in 2010 or 2011. It was a huge event for us.” Of all the brands sold at the store, Ralph Lauren was “the most prominent of them all.”

So RL Corp.’s strategy made sense in theory and also in practice, at least for a while. The brand proclaimed its upscale pedigree in Neiman Marcus and Bloomingdale’s, and most emphatically in Lauren’s own flagship store in Manhattan, a vast, old-money mansion that he gutted and renovated in 1986, and for which his decorators ordered 82,000 square feet of Honduran mahogany. Macy’s and other mass-market department stores then enabled middle-class consumers to participate in the heady Ralph Lauren world.

But the strategy soon ran into trouble.

The company’s growth-obsessed managers were afraid of producing too little inventory for those retailers, so, just to be sure, they produced too much. Often it was more merchandise than retailers, including the company’s own stores, could sell at full or near-full prices. As a result, department stores would sometimes have to slash prices 70% in order to clear out the goods, and more of them ended up in the off-price stores. Disheveled racks and bins of pawed-over clothing—this was a luxury brand? For many consumers, no, it was not. By devaluing the brand, the growth strategy was actually killing growth.

Sales fell, first a little, then a lot, and, alarmingly, they kept falling, quarter after quarter. This kind of thing just didn’t happen to Ralph Lauren Corp. Over the previous 20 years, annual revenue had declined only once, in the devastating financial crisis and recession of 2008 and 2009, and the decline was less than 1%. Those magical powers that others lacked were now faltering.

The leaders of Kate Spade, Michael Kors, Coach, and other luxury brands were making the same fundamental errors. All were finding what retail veterans already knew, that once an upscale brand gets “taken downstairs,” as they say, bringing it all the way back up is difficult and rare. Yet for RL Corp., a far larger business than those others, it had to be done.

As the trend lines started turning down in 2015, Lauren decided he needed new management. He hadn’t been the operating chief in decades, having delegated that job to experienced managers, most notably Farah. Now, a year after Farah had left, Lauren stunned the fashion world by bringing in Stefan Larsson from Gap’s Old Navy chain, which he had turned around impressively after 15 years at H&M, the fast-fashion chain. Why a 41-year-old fast-fashion expert to run a prestige brand? Because he “has the sensitivity of design and of building a business and growing companies,” Lauren told WWD. “That’s rare in our business. Usually it’s one or the other.”

Larsson quickly identified a key reason for RL Corp.’s decline. “We have 15 months’ lead time” from ordering merchandise to getting it into stores, he explained to a roomful of investors and analysts. In a seasonal business, that’s trouble. It meant, for example, that the company had to order next spring’s assortments before seeing the results of this spring’s selling season—and well before retailers were willing to order next season’s merchandise.

That’s why the company’s managers were always ordering too much; with no idea how much retailers would sell this season, let alone what they’d want next season, they had to play it safe. That “mismatch between demand and supply,” Larsson said, meant “our full-price channels have had an excess of inventory already starting out the season.” That excess “drives up the promotional pressure and, worse than that, it pushes inventory over to the value channels.” It also taught shoppers not to pay full price for Ralph Lauren.

Larsson’s fix included cutting lead time to nine months, closing 50 stores (after closing 43 the previous year), and laying off about 1,200 employees (after laying off about 750 the year before). Now, having promised Wall Street the company was finally getting religion about excess inventory, the top leaders faced a big question, the answer to which would be an acid test of their seriousness: What would they do with the excess inventory they still had?

They didn’t slash prices or send that inventory to off-price retailers. They burned it.

Among luxury brands that’s a routine though painful and rarely mentioned practice. Incinerating excess inventory keeps high-priced goods out of cut-price channels and maintains the brand’s exclusivity. There’s no evidence RL Corp. had ever done it since going public in 1997. The temptation to get at least a little revenue from the overage was apparently always too strong. Now the company chose instead to destroy $155 million of merchandise. It was showing the discipline of a top-tier brand.

Larsson knew that tons of work remained to be done—overhauling a weak e-commerce operation, discontinuing low-selling products, closing more stores, laying off more employees, and other cost cutting. But the corner was being turned. “Stefan Larsson’s strategy was a good one,” says Piper Sandler analyst Erinn Murphy. “It’s unfortunate that he never got to finish it.”

In February 2017, just 15 months after Larsson became CEO, Lauren announced that the two had “agreed to part ways.” The stated reason was “different views on how to evolve the creative and consumer-facing parts of the business,” which doesn’t explain much. Larsson went on to become president of PVH, the apparel firm that owns the Calvin Klein and Tommy Hilfiger brands; he declined Fortune’s request for comment. Farah believes Larsson was “not a good match” for RL Corp. in light of his fast-fashion background. As reassurance to Wall Street, the company’s announcement of the change pointedly noted that the strategy Larsson outlined would continue.

In addition to the pain and turmoil necessary for rehabbing the all-important brand, these events may have been distressing to Lauren for another reason. He was receiving an evaluation of his golden touch, and it wasn’t good. When he announced he was surrendering the CEO role and giving it to Larsson, the stock leaped, and when he announced Larsson’s departure, it dropped. The brutal message from investors was that they no longer trusted Lauren’s magical powers.

The company recruited a new CEO, Patrice Louvet, an executive with a 28-year tenure at Procter & Gamble. He had no experience with apparel but plenty of experience managing grooming and beauty businesses globally at P&G, a company famed as a management academy. Out of the spotlight, he has been advancing the fundamental imperatives for RL Corp. now: continued elevation of the brand; a return to sustainable, profitable growth; relevance to a new generation of customers; a better e-commerce presence.

It hasn’t been easy. Full-year sales didn’t resume growing until the company’s fiscal 2019 (which ended March 30, 2019). But managers knew they were winning because even as sales were falling, profits were rising. Brand discipline was paying off. With the company’s discounting at its lowest in five years, according to the Edited retail analytics firm, customers were paying higher prices. In the quarter that ended last New Year’s Eve, RL Corp. achieved the highest quarterly profit in its history. The magic was back. “The company’s metrics defy retail,” marveled Barclays analyst Adrienne Yih. At long last she could say with confidence that Ralph Lauren was executing “a successful (and very difficult to achieve) elevation of the brand.” For a gratifying moment, it seemed safe to pop the Champagne.

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Ralph Lauren: Then and now

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The future of Ralph Lauren’s world

Predicting how hard the coronavirus crisis will hit RL Corp. is futile, since that will depend on presently unknowable epidemiological realities around the world. As a seller of premium-price, very nonessential merchandise, it may struggle more than most companies in a year that’s being compared to the Great Depression. “Ralph Lauren remains a strong brand with one of the best management teams in the softlines industry,” writes Cowen analyst John Kernan in a recent note. Yet he downgraded the stock because the environment is so weak.

A couple of factors could ease the pain. Much of the company’s profit comes from core products that sell year after year—polo shirts, the flag sweater, cable sweaters. If they don’t sell this year, they can be packed up and sold next year. “It’s not a trend brand,” says Kathy Gersch. “It’s not Prada. That’s an advantage.” At least as important, RL Corp. has “a very strong balance sheet with negligible long-term debt,” notes Murphy. No analyst seems to doubt that it will weather this crisis and come out of it stronger than most competitors.

But the immediacy of the crisis shouldn’t obscure the larger, longer-term challenges to the brand. While it has been rescued from the remainder bins at T.J. Maxx, the hard fact is that it still isn’t what it once was. Consider the brand valuation rankings published annually by three marketing firms, Interbrand, Kantar, and Brand Finance. Using different methodologies, they all show exactly the same trend over the past decade: The value of “Ralph Lauren” peaked in 2014 and then plunged; it’s still nowhere near that peak.

A look further back shows greater deterioration. U.S. adults today see “Ralph Lauren” as less “high quality,” “worth more,” and “distinctive” than they did in 2005, says BAV Group, a brand research and evaluation firm that’s part of the advertising giant WPP. The firm’s surveys show that in the eyes of consumers, the brand is 28% less differentiated and 43% less relevant than it was then.

Looking back still further, an unorthodox measure of cultural influence shows the brand’s rise and decline. When Lauren started out in 1967, “Lauren” ranked No. 242 among names for girls born that year, according to the Social Security Administration. In 1989, after he had appeared on the cover of Time and was running multipage magazine ads filled with lavish photos portraying his alternative worlds, it ranked No. 9. In 2018, the most recent year for which information is available, the name ranked No. 171.

The issue of the company’s future raises the matter of Lauren himself. “The question of succession has been hovering over the company for at least a decade,” says Farah. “My guess is he will continue to work as long as he’s healthy, and he’s a very healthy man. I envision him being the leader for a very long time.” Others who know him agree that it’s inconceivable he would ever leave the business by choice. “Ralph, retire?” says Alan Flusser, a fellow menswear designer, longtime acquaintance, and author of a recent biography of Lauren. “What would he do for relaxation? He’d do exactly what he’s doing now.”

Lauren learned that believing in himself made him successful, and he isn’t going to stop. His controlling stake in the company means he can stay as long as he wants. He can stay too long if he wants, which worries some. “Whether he retires or just shifts his role could make or break the company,” says Gersch. “If he won’t let go when he should, then the future of the company is at risk.” Charles Elson, a corporate governance expert at the University of Delaware, says, “No one wants to feel that they’ve aged out, but at some point you do. You don’t go on forever, but with that stock structure you do go on forever, to the detriment of the investors.”

This concern could be considerably premature. Warren Buffett is running Berkshire Hathaway ably at 89, and his partner, Charlie Munger, is contributing at 96. Henry Kissinger, still writing perceptive articles, is about to turn 97. Eighty isn’t necessarily as old as it used to be. But the concern becomes inevitable, eventually.

The thing about creating worlds rather than merely designing clothes is that worlds can endure. RL Corp. and Ralph Lauren have been interchangeable thus far. But at some point, they'll have to part ways for RL Corp. to live on.