Why Did The Michael Kors, The Once Light Extravagant Overlord, Descend To This End?

According to the world clothing and shoe net, it has been regarded as the representative of the US luxury brand and "defeated".

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Today, after a disappointing first quarter performance, Michael Kors recently said it would close its 100-125 fully priced stores to improve profitability.

In fact, Michael Kors's stop shop is a self serving consequence.

Michael Kors didn't behave like other luxury.

Pursue low-key and steady development.

Michael Kors has been expanding shops since 2013, stimulating consumption through discount.

Although it has achieved the purpose of making money in the short term, its performance has declined rapidly after the popularity.

Kang Lanxin, Dean of the school of dress and collocation, said that as a luxury brand, it is necessary to learn the luxury marketing mode and maintain a moderate scarcity so as to maintain the price advantage.

In the future, if Michael Kors can not change sales mode, correctly examine consumer demand and enhance brand image, performance will probably decline.

Close shop stop loss

The famous designer Mike Coles Michael, the famous designer of America, has announced that about 100-125 stores will be closed due to poor performance, which is expected to save about $60 million in annual cost of Kors.

Fresse, spokesman for Michael Kors, did not want to disclose the list of stores to be closed, nor would he like to explain how many employees might be affected by the closure.

Once the light luxury owners are now shutting down their stores, it is not just the decline of the retail department industry that is not related to the aggressive expansion mode and the crazy discount strategy.

Michael Kors has launched the crazy shop mode since 2013. According to statistics, Michael Kors turned out to be the largest handbag manufacturer in the United States in 2014.

As of April 2017, there were more than 800 Michael Kors shops in the world, including 201 in Europe, 228 in Asia and 398 in the US.

The so-called luxury, the most important thing is "scarcity". Fast opening shops bring high inventory. Michael Kors chooses discount sales to handle inventory and boost sales.

Michael Kors discount products are half or even 1/3 of the original price of the counters. Long term cheap products make consumers reluctant to purchase their positive prices, thus plunged into a vicious circle, seriously affecting the pricing strategy of the brand, resulting in the brand image and fashion luxury positioning farther and farther.

In addition, excessive production and discount led to a decline in product quality and increased returns. Nordstrom, a famous American department store, also put it off.

Because the quality and return rate were put off the shelves, the image of Michael Kors plunged in the minds of consumers, and the brand profits declined. After 2015, Michael Kors profits went down all the way, so far it has not been reversed.

Clothing and footwear expert Ma Gang said that the luxury brand positioning is embarrassing, compared with high-end luxury goods, brand value is not enough.

At present, fast fashion products do not lose to light luxury brands in terms of design styles and so on, which has squeezed their sales space to a certain extent.

The positioning of light luxury brands is relatively small. In this respect, the number of shops can not be won.

Low performance

Michael Kors was founded in 1981.

As a representative of American luxury lifestyle, Michael Kors entered its peak in the 2011-2014 year.

In April 2014, Michael Kors revenue first surpassed Coach, a lightweight luxury brand.

Before 2014, Michael Kors has been one of the hottest brands in the light luxury sector, with sales up to two digits.

In order to maintain this speed, Michael Kors has expanded rapidly to achieve the opposite effect and its performance has been declining. At the same time, its competitor Coach has successfully pformed and developed well.

Michael Kors 2017 financial year fourth quarter results show that Michael Kors achieved operating income of $1 billion 60 million, down 11.2% from the same period last year, and the net loss in the reporting period was as high as 26 million 800 thousand US dollars.

Among them, the same store sales fell by 14.1%, wholesale channel sales fell 22.8%, authorized operating income was $3340, down 6.2% compared to the same period.

In the industry view, the sales performance of Michael Kors is "disastrous".

When it comes to Michael Kors's rival Coach, the light luxury brand has also faced a rapid decline in its sales for the rapid expansion of sales.

Public information shows that Coach's same store sales in the North American market fell for the 7 consecutive quarter in 2014.

Aware of the problem, Coach accelerated its pformation and saved itself. In order to tear up the "discount" label, Coach made great efforts in the past two years to reform: including reducing discounts, increasing new design concepts and widening product lines.

A series of pformation has improved Coach's performance. In 2017, Coach's operating profit in the first quarter was $151 million, up 13% over the same period last year.

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Structural turbulence

Coach, Kate Spade and Michael Kors, also known as "the three largest luxury companies in the United States", have gone through 2012-2014 young and prosperous markets together, and at the same time face 2015-2016 years of difficulties in the department store market.

Now, however, the pattern of tripartite confrontation has been broken.

In May this year, Coach announced the acquisition of Kate Spade, in order to promote the multi branding strategy.

After the news, stock prices of Coach and Kate spade rose one after another.

Coach group chief executive said that in recent years, Coach has been high-end and effective. The main customers of Kate Spade are the millennial generation, and the two brands have nearly 10% overlapping users.

The strong alliance between rival Coach and Kate Spade will continue to seize the market share of Michael Kors.

This is not good news for Michael Kors, still alone.

But at the same time, there are also reports that Michael Kors may buy Jimmy Choo, and some analysts say that if you can get Jimmy Choo, it will help to strengthen Michael Kors's shoe business.

In the doldrums of performance and increasing competitors, Michael Kors's current dilemma is exactly the same as that of Coach, but can it reproduce the pattern of Coach recovery and development? From the perspective of market performance, in terms of design, Michael Kors innovation is becoming less and less. Every year, Michael Kors sees similar purses and backpack styles in exclusive stores.

John.D.Idol, chairman of Michael Kors, also said, "at present, the trouble of brand is more serious than expected. What we need is not just to reduce the simple and quick repair of promotion and wholesale channels."

Ma Steel said that with the widening of the way consumers purchase commodities, they have more space to recommend.

The most important thing in the future development of light luxury brand is to improve product quality, improve design plan and cultivate consumer loyalty.

Kang Lan Xin said that light luxury as a unique category, has broad prospects for development, enabling consumers to enjoy the big deal at a lower price.

In the future, Michael Kors should change its marketing strategy and maintain customer's hunger and thirst.

The most important thing is to return to the product itself and restore the popularity with attractive products.

For the loss of existing brand image, it takes time to heal.

It is only a matter of time before Michael Kors can regain its brand value, expand its brand influence and get reborn.

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