The Concept Of Light Luxury Brand Being Weakened

According to the world clothing shoes and hats net, in recent years, light luxury brands are playing a commercial story of "ups and downs". At present, Michael Kors has become the protagonist of the story.

7 at the end of the month, the United States

Michael Kors announced its acquisition of Britain at 896 million pounds (about 1 billion 200 million U.S. dollars).

Luxury brand

The price per share is 230 pounds, which is 36.5% higher than the price of Jimmy Choo sold in April this year.

Just two months ago in May, another lightweight luxury brand Coach announced its acquisition of rival Kate Spade for $2 billion 400 million, and is expected to complete the paction in the third quarter of this year.

Behind the successive acquisitions is the overall weakness of the light luxury industry and the pformation of its business mode.

In the 2015, the big luxury card that showed its surging performance has shown signs of decline. The rapidly adjusted Coach started to pick up this year, while Michael Kors reported a net loss of $26 million 800 thousand during the fourth quarter of April 1, 2017, compared with net profit of 177 million US dollars in the same period last year.

Michael Kors brand chairman and CEO John D. Idol said after the earnings report that it will close 100 to 125 stores in the next two years.

At the same time, he positioned the fiscal year 2018 as a pitional year. "We have to set up a new baseline in this year before we can return to the track of long-term growth."

In fact, the two words of "light extravagance" still focus on "extravagance".

After the brand lowered the requirements of product design, the price performance ratio and the crazy expansion of stores, the quality of "luxury" was weakened, and consumers were unwilling to pay for it.

Therefore, the concept of "light extravagance" has also been questioned. For the brand with light luxury label, the upgrading of products is imperative.

Takeover logic

From the recent acquisition logic of Michael Kors and Coach, the two brands are opposite.

The former will command a more high-end luxury brand Jimmy Choo, while the latter buys Kate Spade, whose brand is lower than its own peers.

Obviously, Michael Kors wants to enrich its own product line and enhance its brand status through Jimmy Choo.

In the process of Jimmy Choo's acquisition, Coach also threw an olive branch, followed by news that the US Qatar Royal Investment Fund Mayhoola, China Fosun Group, China Hongyi fund and perfume company inter-Parfums alliance participated in the bidding.

In the end, Michael Kors won the hearts of Jimmy Choo in the competition, and it also looked forward to Jimmy Choo helping to reverse its depressing performance.

Jimmy Choo is a shoe brand made by Zhou Yangjie, a Chinese designer in Malaysia in 1996. The dream of 10 cm high heels has become the dream of many girls.

The late British Princess Diana and a number of celebrities are loyal customers of Jimmy Choo. The brand in sex and the city reveals the influence of Jimmy Choo.

Although the founder left the team, the industry's Jimmy Choo products were mixed, but this did not hinder the rise of Jimmy Choo's performance.

Jimmy Choo has changed its stock price by more than 20% this year. Its market value is about 771 million pounds, with more than 150 stores in the world and strong performance in Asia and Europe.

In addition to women's high heels, men's shoes are also very popular.

In contrast to Michael Kors, total revenue in the first quarter of 2017 fiscal year was $1 billion 60 million, down 11.2% over the same period.

Its main markets, the US and Canada, fell by 18% to $721 million compared to the same period last year, while Europe dropped by 15.3% compared to the same period last year. The only increase in Asian sales was more than 120 million US dollars, an increase of 96.3% over the same period last year.

At present, Michael Kors has more than more than 800 stores in the world, including 201 in Europe, 228 in Asia and 398 in the US.

On the one hand, many discount shops are squeezing the profit margins of the brand; on the other hand, the lack of a large sense of design makes the premium of the brand shrink.

Despite the huge increase in Asia, the revenue is relatively small. In addition, taking China as an example, consumer demand for products and services is increasing at the moment of consumption upgrading.

{page_break}

Zhou Ting, President of the Institute of wealth and quality, told the twenty-first Century economic news reporter: "for the acquisition of Michael Kors, the follow-up depends on how the company carries out brand segmentation and how to do it in the high-end direction, and optimizes it in positioning and strategy.

These are the tests. "

At this point, Michael Kors is suffering from Coach's previous pains.

After experiencing ups and downs, Coach adjusts itself from product positioning, offline stores and marketing channels to return to profitability.

In early 2015, Coach acquired the high-end ladies shoe brand Stuart Weitzman, with a paction price of US $574 million.

According to Coach2017 second quarter earnings data, Stuart Weitzman net sales amounted to US $118 million, up 26% over the same period last year.

Speaking of Coach buying Kate Spade, Zhou Ting analyzed: "maybe the company has its own considerations based on the financial point of view, but based on the market point of view, this is not a reasonable acquisition.

How to make use of it to supplement its capacity and channels to acquire an unsuccessful luxury brand? Now Coach is upgrading its products, and the whole brand is going up, but it will not help to build its own brand by accommodating a brand that goes downhill and is lower than its grade.

In the view of Zhou Ting, if the luxury brand is to rebuild the high-end image, the merger will continue.

"Do not exclude Michael Kors from acquiring other luxury brands, the company may form a collectivization mode.

Now is a good time to buy brands, because brand value is underestimated.

Weakening the concept of light luxury

Michael Kors, Coach and Kate Spade, once known as light luxury giants, have gone through a period of rapid rise and decline.

Among them, especially the two major brands of Michael Kors and Coach have entered the pition period. From the perspective of momentum, they evolved from "light luxury" to the real "luxury" brand.

When the "luxury luxury brand" slogan was first launched from the light luxury brand, Zhou Ting thought: "the so-called light luxury brand to create light luxury group is not a business model, because light extravagance is a false concept, in fact, fashion brand is based on the big brand design, and attracts the mass consumer group with the price of three streams.

As for the Chinese market, at the beginning, we didn't understand the brand, and the domestic luxury market was relatively low. So the so-called cost-effective luxury goods can impress the Chinese consumers.

But now it seems that this is a commodity pattern of the past. "

In other words, the way of luxury goods in low price market has now reached the bottleneck, and its business mode is in conflict with the inherent attributes of luxury goods.

The concept of "light luxury" will soon disappear, and you will find that the real design elements are the big ones. Real luxury brands offer better products and service experience.

Consumers will ultimately choose products and services, and will go to "product service price performance ratio" instead of "luxury brand" based on "brand price performance ratio".

At the same time, big names are also engaged in global bargaining, and the price gap is narrowing at home and abroad.

Zhou Ting said.

However, this does not mean that these brands have no market. In terms of the domestic market, the head of the high-end e-commerce platform Xiu Xiu net told the twenty-first Century economic report that light luxury brands such as Michael Kors, Calvin Klein and MAX&Co. occupy the front row in the first half of the sales list, and sales increased by 30% over the same period last year.

At the same time, she also said, in fact, consumers no longer care about whether the products are light luxury brands. "Consumption upgrading, the younger generation of consumers are fond of niche and personalized brands, which are replacing traditional luxury brands.

On the APP, Alice+Olivia, Three Floor, Self-Portrait and other designer brands are becoming more and more popular.

In addition, sales of niche brands such as Golden Goose and Veja have risen sharply.

In addition, the Nordic brand also attracted a large number of consumer fans.

The price of the purchase is mainly between 1000 and 3000 yuan.

With the change of consumer demand, diversification and individuation are becoming the pformation direction of luxury goods.

"Brand value is seriously reduced, and consumers no longer pay for brand premium.

Because luxury brands will shift more to customized industries in the future. Customization will be industrialized and large-scale.

Moreover, many luxury brands are redeveloping their customized businesses, and even some of their brand sales are up to 70% from customizing business.

Zhou Ting said.

According to the "2016 China luxury report" released by the Institute of wealth quality, the brand of the future will present the Pyramid structure.

The top is the high-end designer brand, the middle layer is the traditional luxury brand, and the bottom layer is the traditional mass brand.

Among them, customized products are distributed in three levels according to the low end of high school.

The existing light luxury brands or go up to luxury brands, high-end customization, or continue to enter the popular brand, and the mode of light luxury to take the mass line has been proved to be unsustainable, starting from the product or brand, or winning the best path of consumers.

More interesting reports, please pay attention to the world clothing shoes and hats net.