Michael Kors $500 Million To Recover Greater China Franchise

Reportedly, the American luxury brand.

Yesterday, it announced the acquisition of Mike goldsmith (Hongkong) Limited for $500 million in cash, which is the exclusive licensor of Michael Kors in China and other parts of Asia.

Michael Kors is not the latest US fashion brand to recover the right to operate the Greater China region. Since the first half of this year, the secret and Tommy Hilfiger of Vitoria have made the same moves, proving the confidence of western fashion brands in developing the Chinese market.

In the 12 months ending March 31, 2016, the total revenue of Michael Kors Greater China was US $197 million, and the sales network consisted of 91 retail outlets and 6 tourist retail outlets covering China, Hongkong, Macao and Taiwan.

In fiscal year 2017, Greater China business is expected to contribute about $200 million to the company's retail sales net.

Earlier informed sources told reporters that China has become one of the most important potential markets for Michael Kors. As of the third quarter, the performance of Michael Kors in China has increased by at least 20% over the same period last year. Its region has also extended its experience in promoting social media in the US headquarters, and used digital marketing and bold innovation to capture young people in China.

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Michael Kors CEO John D. Idol said that in the past few years, Michael Kors has been working hard with the authorized partners of Greater China to lay the foundation, build brands and increase the recognition of Michael Kors in the Chinese market. The Michael Kors brand is strong in the Greater China market. Now it is the ideal time for the company to integrate the area into the business and make full use of the huge growth potential of the region.

Michael Kors said it would speed up the upgrading of the product line and promote its sales growth by strictly managing its wholesale distributors, retaining the exclusiveness of its products and stepping into e-commerce.

According to the annual trend report of PM Digital, 2015 Trend Report data show that the highest market share of luxury brands is Michael Kors, which is the preferred brand for shoppers to search Google, and most of them use mobile devices to visit and shop on the website.

According to the fourth quarter earnings report issued by Michael Kors, the US is still the largest market for Michael Kors. In the fourth quarter, sales in the US market increased by 4.6% to 879 million 100 thousand US dollars, accounting for 3/4 of the total revenue of Michael Kors.

Although the wholesale business of Michael Kors declined in North America, its overall wholesale profit increased by 4% in the fourth quarter as a result of the growth of the Asian market. As of April 2nd, the Michael Kors revenue rose from $1 billion 80 million to $1 billion 200 million, thanks to the strength of the US dollar.

Michael Kors's expansion of new outlets and e-commerce in the past year has also increased its profits by 22% in the current quarter, and its annual gross profit amounted to US $4 billion 700 million, an increase of 11% over the previous year.

By the good news of Michael Kors's fourth quarter earnings, the US stock price rose nearly 7% yesterday, closing at $45.5 per share, and the company's market capitalization is about $9 billion 730 million.

Some analysts believe that

Concerned about the quality of sales, for companies like Michael Kors, the problem has been recognized. The Brand Revitalization Strategy Plan and the current good performance are in line with the industry's expectations, and also enhance the confidence of light luxury on the selected core fashion retail Road.

Reducing the number of blind and endless promotions is the first step in the recovery of light luxury.