Error Of Michael Kors: Rapid Expansion

In the capital market, Michael Kors is also questioned by investors and is not optimistic about its mode. Last September, founder fashion tycoon Cao Qifeng made a net profit of nine hundred million and completely quit Michael Kors business. According to foreign media commentary, Michael Kors shops, both distributors and retail outlets, are all over the world, and brands are also opening shops in discount stores. As a light luxury brand, the company's problem is not too close to consumers, but rather no more powerful product lines. But what's worse, Mickael Kors is often accused of plagiarism in the past 2 years.

In the past year, the share price of Michael Kors has fallen by 34%. According to Morgan Stanley's recent report, MK is the only independent retailer so far in the securities business that has not exceeded five years in the context of the overall strength of the apparel industry. Its products are no longer the best single product.

Many problems of Michael Kors can be attributed to one mistake: rapid expansion.

The brand currently has 4133 stores worldwide, including brand stores, department stores and discount stores. In 2013, the number of stores was only 2913. The expansion of the shops shocked the industry.

Michael Kors has indicated that it is likely to continue to add hundreds of stores. Although more stores can drive profits up in the short term, it also hurts the brand.

Industry expert Robin Lewis contrasted the trend of the two brands of Michael Kors and Tommy Hilfiger, for example, Tommy Hilfiger reached the peak of popularity at the end of 1990 and then went downhill. He wrote in his blog that popularity is the kiss of death for light luxury brands, especially for those who are upscale. Consumer For positioning the brand.

Michael Kors was once everyone's dream brand, and consumers scrambled to pay for its high price. But once everyone owns it, it will no longer be popular. Many other brands have also experienced this situation, such as Juicy Couture, Jordach and Coach.

Lewis said, Michael Kors also has several brands with different price tags, and this strategy It's easy to backfire. MK has both brands sold in high-end department stores, as well as brands sold in the middle market and at discount stores.

"Some people will argue that these different levels of brand will eventually form a competitive situation, and then gradually swallow up high-end product lines." Lewis says. In other words, if consumers at MK discount stores see that they can buy these goods at half price, they will not spend 300 dollars on the same goods in department stores.

Similarly, Coach The high popularity has blocked the brand business. But this trend has attracted the attention and Introspection of the light luxury camp. The latest news is that in order to avoid falling into the trap of overexposure to brands like Coach and Michael Kors, Kate Spade announced that it would reduce endless sales promotions so as to establish "quality" full price sales. Craig Leavitt, chief executive of Kate Spade, said: "the company's goal is to reduce the dependence of brands on endless promotions. The amount of Spade participation in promotional activities will be a step in the company's multi-channel approach to establishing quality sales, and this will be a very important part of the company's strategic growth."